Dell makes Kace for systems management strength

SILICON VALLEY, Calif. – Rob Meinhardt thought it was a joke when he received a LinkedIn request from Michael Dell, but that initial connection through social media led to an acquisition two years ago that could be pivotal to Dell’s evolution as a contender in the enterprise software space.

Meinhardt is co-founder of Kace, a systems management company that bundles its software onto appliances aimed at mid-sized companies. Kace had been trying to convince Round Rock, Tex.-based Dell Inc. to consider reselling its product as it had been doing Microsoft System Center and Altiris. Although there didn’t seem to be a lot of interest initially, Michael Dell’s other company, MSD Capital, had quietly purchased one of the Kace appliances, and word got back to the owner.

“We fit very cleanly inside of Dell’s strategy,” Meinhardt told reporters and analysts on a media tour this week following the launch of the Dell PowerEdge Server 12G earlier this week. He later admitted to Dell that, with a background in startups, he was sometimes bumping up against the HR processes and other customs of a corporate enterprise. “Michael said, ‘Oh, don’t worry about it – this is the first large company I’ve worked at too.’ He’s still got that entrepreneurial spirit.”

Today, Meinhardt says Dell sends personal e-mails congratulating the business unit on its financial success, spelling “congratulations” with a “K.” Of the 18 companies Dell has purchased in the last two years, Kace may be of particular interest to Canadian IT managers because its products were designed specifically with the mid-market customer in mind. The University of Toronto is already a customer, and it deals with a growing problem in many organizations: how to deal with patching, service desk issues and other tasks that take up much of a technology staffer’s time.

“People highly constrained, and yet there’s so much more to do,” he said. “If you look back 15 years, a lot of us didn’t even have e-mail. We had no network storage, Web servers. That’s an incredible transformation that’s gone on in a fairly short period of time.”

Kace focuses on two areas with its appliances: deployment of IT products and management. This includes recovery, establishing a centralized deployment library, user state migrations, asset management and so on. According to Meinhardt, more than 65 per cent of its customer base tend to buy both at the same time.

“It doesn’t mean it won’t serve the global 2,000 kind of company,” he said. “But if you’re successful in the mid-market, you’re probably going to hit a home run across the board.”

Dell Kace customers include Grow Financial, a mid-market credit union based in Tampa Bay, Fla., whose assistant vice-president of network services, James Stock, was featured in a panel discussion as part of the PowerEdge 12G launch. Stock said that, like most firms, Grow Financial started out working with Dell as a customer of its PCs 10 years ago, but has since looked at other products and services.

“We moved into doing virtualization on Dell storage, and system management on Kace,” he said, adding that the appliances were set up over the course of a single afternoon, allowing Grow Financial to use it for deploying PCs within the first week. “That’s one less person we have to hire because that does the job for us . . .What it saves us in labour, that’s something we can re-invest in technologies elsewhere.”

Meinhardt said the idea is not necessarily to help IT departments reduce headcount but to address the needs of an IT generalist – someone who wears many hats in an organization. He referred to one customer, a gun manufacturer, who have had the same people running its IT systems for 25 years. “They haven’t added people or changed their skill sets, other than what they’ve learned on the job,” he said. “For us, it’s less about the IT department learning new systems management skills, and more about the vendors adapting products to people with all types of skills.”

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