I’m at the Dell Analyst event this week, and it is opening with a talk by Michael Dell. I’ll attempt to capture what he is conveying to this audience of folks, many of whom specialize in covering Dell and most who cover separate technology areas that Dell covers.
Michael Dell is one of the few technology CEOs who relates to analysts on a personal basis. He trends toward candor and he seems to actually like us, as opposed to many of his peers who create the impression that they tolerate us, and the difference is appreciated.
One of Dell’s key overarching initiatives is to help companies move from proprietary platforms to the industry standard platforms that Dell markets. Currently, Dell has the number-one share in x86 servers in the U.S. and, according to Dell, it will soon be number one worldwide. Even though the company started with PCs, it has twice the share with servers that it has with PCs.
However, even though Dell is expanding storage and networking, Dell’s efforts are to drive to solutions that combine the technologies with a focus on users and providing services.
The next overarching initiative addresses the massive proliferation of devices that people are carrying. Michael Dell clearly isn’t an advocate of the “PC is dead” belief and argues that what we are seeing is the evolution of the PC and that Dell is one of the leaders in the virtual PC. Dell is driving the commercial tablet initiative, but he reminds us that the largest installed base is still PCs, with 1.5 B installed currently.
One of Dell’s fastest-growing businesses is to take over the management of all of these devices, and he used a large pharma company as an example of how it basically took over the responsibility for managing these devices.
The third major initiative is to prove solutions that give clients the information they need to run their businesses. This surrounds analytics and managing big data, not only for their customers. Dell is using these same tools to improve customer satisfaction and grow its own business.
The fourth major initiative focuses on providing solutions that protect companies. Yes, this is a security business and it represents over $1 billion in revenue to Dell. It ranges from securing the devices to better protecting data and from small businesses to large carriers. It also covers both traditional purchases and BYOD initiatives. It has expert services that cover monitoring and alerting to better protect Dell’s clients from the increasingly hostile world we are all living in. Customers range from small companies to large banks.
The Dell strategic direction is to focus on disruptive forces that are driving the industry and create solutions consisting of software, hardware, and services to mitigate the pain clients are experiencing from these disruptive trends. Michael Dell is talking about trends ranging from BYOD to the massive increase in hostile security threats. Dell is aggressively investing, and the number he used was $5 billion, in developing solutions to these growing problems. Size of client ranges from small companies to 95 percent of the Fortune 500 companies that Dell serves.
After general comments, Dell moved to specific questions. First, he was asked whether Dell was going to go into large data applications products like Oracle or IBM DB2. The answer was no, Dell isn’t currently focused on doing this kind of product but instead creating optimized industry standard solutions upon which these apps would better run.
The second question was on what Dell is doing with acquisitions to assure these new firms don’t remain siloes. Dell’s method of addressing this is to create company-wide directives with incentives to drive collaboration between business units. This has resulted in collaboration that is far greater than Dell’s competitors, which are known for having this problem. Part of this solution is to make sure a portion of the acquisition selection process is to ensure that the related solutions can be integrated.
The third question: Under the massive industry change and looking out over five years, where is Dell going? Dell’s answer was that software was clearly going to be increasingly important to tie all of these systems together and getting them to work as a system. This has dramatically increased Dell’s need to bring in new talent to deal with the new systems and solutions flooding the market.
The fourth question was on the number of software firms that have been acquired and how they are creating a platform that looks like it comes from Dell. The response is that they are formed into solutions and this forms the result into products that come to market integrated. The goal was to balance whatever was special about the acquired company so that it isn’t lost during the acquisition process with the need to provide an integrated, and effective, Dell solution. Dell creates this balance better than most.
What makes a Michael Dell talk unique is the way he engages with analysts. While not as polished as some, he comes across as far more sincere. He clearly cares deeply about the company that bears his name and is one of the few CEOs who is more interested in advancing his company strategically than just spiking his quarterly revenue. Most of the industry analysts are rooting for his efforts to take his company private as a result and expect, should he be successful, that the end result will likely be amazing. It also points to the big problem of driving strategic efforts in public companies today.
In the second part of Rob's take on the Dell Analyst event, he explains how Dell is using internal and external performance metrics to better understand its own business and its customers' needs.