Dell CEO Michael Dell’s opening press conference at Dell World 2015 was rather short in length, but it delivered some interesting nuggets and sound bites nonetheless. Call it the appetizer for what should be quite a hearty enterprise meal this week in Austin, Texas. Here’s a look at some of the highlights from Tuesday’s press event in Austin.
Dell’s New ‘Theory of the Universe’
While Dell’s massive, $67 billion merger with EMC is far from concluded, Michael Dell didn’t shy away from discussing the deal and hinting at how the combined entity will go to market.
Buying EMC gives Dell a strong position in “the IT of tomorrow,” along with valuable new sales channels, the ability to co-innovate, coupled with Dell’s “world-class supply chain” and the ability to operate as a privately held company, he said.
During his keynote on Wednesday, Dell will reveal a new “theory of the universe” that Dell-EMC will try to prove out: “You'll get a sense of strategically where we're heading as a company, how we can deliver tremendous benefits for our customers, and how well-positioned the new company will be."
“This is complicated and doesn’t lend itself to sound bites,” he added. “What we see is a number of things going on. First of all, you have all the CIOs out there trying to fund digital transformation by reducing cost in their current infrastructure. There’s also this move to virtualization, hyper-converged systems where the silos that had been built up in the second platform of IT are starting to go away. It’s very important to be able to lead in that next wave of IT.” Dell-EMC will be able to lead in both existing and new technologies, Dell said.
POV: The timeworn IT industry phrase "end-to-end solutions" was actually invoked a number of times during the press conference, which doesn't bode particularly well for the reveal of a truly new idea. Dell's keynote needs to paint the picture of the combined company's plans with some specifics and real-life customer examples.
It's All About Scale
HP CEO Meg Whitman recently slammed the Dell-EMC deal in a leaked memo, saying integrating the company will be “a massive undertaking and enormous distraction for employees and their managers.” Of course, HP itself is in the process of dividing into two companies, one for enterprise and the other for personal systems and printing.
Dell seemed bemused when asked about Whitman’s comments. “Well…. Hmmm. HP is a great VMWare partner,” he said to laughter. “I don’t have any other comment. I think she got some of the facts wrong, but we’ll let the facts speak for themselves.”
“We have a different viewpoint as to how our company should evolve than HP does,” Dell added. “First of all we think that scale is important. When you look at this industry the companies the have succeeded in the volume data center space have been attached to large PC businesses and client businesses. The volumes really matter. I also think at the very moment there is an explosion in devices … the connection between device and data center is very important. We also find customers don’t want more suppliers, they want fewer suppliers.”
At an executive summit Dell held recently, “the CIOs were telling us, this is great,” he said. “You’re making our jobs a whole lot easier.”
Dell did acknowledge that integrating the company will require “a whole lot of work,” and said that it’s already underway among both EMC and Dell executives.
POV: Dell-EMC will achieve additional scale immediately after the deal is done, of course. But how effectively the integration plan gets executed could determine how quickly the combined entity takes additional market share, as well as keeps existing customers happy. Rival vendors—including HP—will certainly be circling large accounts of both companies, looking to poach. The good news is that this type of courtship provides customers leverage with any deal.
All-In on PCs
Dell is “fully committed to the PC business and all the hardware as you move up the stack,” said Jeffrey Clarke, president of client solutions. “We believe controlling the edge devices as well as all the things that happen in the infrastructure.”
Expect Dell to make a big play in Internet of Things device technology going forward as well, coupling that with its security assets, Clarke said.
One questioner suggested the PC business has become stale, feature and innovation-wise, which made Clarke bristle a bit. Dell recently shipped the industry’s smallest 13-inch notebook with a UHD screen and 18 hours of battery life, he said: “I think we’ve not seen the end of PC innovation—we’re just at the beginning of it.”
POV: Nobody would expect Clarke to say much of anything different about Dell's PC business, but his comments about selling up the full stack have some interest. One questioner asked whether Dell-EMC might move into selling integrated systems combining servers, storage, networking and various combinations of enterprise software, a la Oracle. No direct answer was given, but such a move isn't difficult to imagine given the software assets EMC brings to the table through VMWare and more.
