Dell made two bold moves last week that bolster its apps modernization street cred. Since MAKE Technologies and Clerity Solutions may not be household names to you, here are our observations about the moves and some rumination on what it means to you.
Who Dell Bought
- MAKE Technologies (MAKE) – Vancouver, BC-based MAKE brings powerful application analysis, apps portfolio management, and advanced re-engineering capabilities to Dell.
- Clerity Solutions (Clerity) – not to be confused with CA-Clerity – the PPM tool, it was one of the last remaining COBOL compiler vendors in the business of rehosting COBOL applications to Unix and Microsoft operating systems. It and Micro Focus arguably owned the lion's share of the market.
What Dell Gains / Why It Matters
- Dell can distinguish its service offerings from pure labor arbitrage. MAKE was a software-product company with a services arm, and its product offering is rich and complex enough to require a services engagement. In that light, the union with Dell (post Perot acquisition) makes perfect sense – Dell gets to distinguish itself from the labor-arbitrage model of consulting where firms throw bodies at projects. MAKE brings powerful application tools with semantic impact analysis that enable firms to reengineer legacy applications. MAKE wrapped the tools in a process that was highly effective at re-engineering large legacy applications to modern platforms. Services firms that ignore MAKE's processes tend to fail / require bailout from MAKE to place the project back on the path to success. If Dell embraces the MAKE process as well as the tooling, it will gain a formidable weapon for its services arm.
- HP and Oracle need COBOL options. Given its focus on moving (re-hosting) COBOL from mainframes to pretty much anywhere else, Clerity's potential suitors MAY have included HP, Oracle, and perhaps even IBM. HP and Oracle have a similar interest in bringing COBOL applications from mainframes to their hardware and software ecosystems. As things currently stand, HP and Oracle offerings will have to embrace (or buy) Dell's primary competitor in the COBOL compiler space – Micro Focus – as there are few other viable choices.
- Micro Focus needs a competitor. Many Forrester inquiries about Micro Focus lament its pricing and contract negotiation policies. Dell's move leaves Micro Focus as a virtual lone-wolf vendor selling all (a COBOL compiler, file management, batch, and online aids). Customers may see an (allegedly) already aggressive Micro Focus become even more emboldened with regards to pricing and contract negotiations. Dell is likely to tend toward services-led engagements rather than continuing to sell Clerity and MAKE as pure software products.
- Dell gains lots of new opportunities. MAKE had high hopes for application portfolio management (APM) it was unable to fulfill given its small size and market reach – Dell changes the game on that score. With the right levels of investment in APM, Dell has an opportunity to revitalize and upsell every existing customer – think an instrumented dashboard of the application portfolio with a road map of how to proceed in streamlining and optimizing it. Dell has the opportunity to attract new customers with the same offering as well as extend its modernization to cloud-based solutions. Finally, over a broad enough swath of customer environments, genericized application portfolio data represents a gold mine of statistical information – both for sale and as fact-based marketing collateral that tracks Dell's improvement of its customers' application portfolios.
The sky truly is the limit for Dell – if it plays its cards right.