This is a big moment for Dell, and Michael Dell in particular. This Dell EMC merger is the biggest and fastest merger I’ve ever seen done. One year ago, Dell announced at Dell World that it was going to attempt to acquire and take EMC private. The task seemed impossible, but the companies got it done. Michael Dell is opening his keynote with his comment from last year, “go big or go home, and apparently no one went home.” Michael Dell clearly came to the conclusion that he, like most his peers, could attempt to respond to the coming world technology transformation, often called the Second Industrial Revolution, or he could drive that transformation, often referred to as the Third Industrial Revolution. He chose the latter and this was the core of his talk this morning. Here is what I took from Dell’s talk.
The Next Industrial Revolution
Technology is advancing, in terms of performance, at a rate of 10x every five years. In a short period of time, we’ll have self-driving cars and functional artificial intelligence, all resulting in the sunrise of a new era, a digital dawn. Technology is working to solve problems ranging from business to curing illnesses.
Dell Technologies is number one, according to Gartner, in 20 magic quadrants, 20,000 patents and applications, and $4.5B in R&D annual spending, and about twice the nearest competitor. Dell went on to point out that the combined company is in between 70 percent and 100 percent of every listed market and market segment. Dell spends less on debt then its competitors spend on stock buyback programs and dividends. I think this point is important because there is a standing belief that Dell’s debt load makes it uncompetitive but, while this isn’t optional like the other programs are, the need to support stock price is forcing public firms to spend massively to prop up their stock. That is something that Dell Technologies no longer needs to do.
The overall goal for the new Dell is to become THE trusted provider of essential infrastructure for the next industrial revolution. This is also a very important difference. While public companies have to focus like lasers on their quarterly results, Michael Dell is focused like a laser on the next world pivot and building a company to take advantage of it. GE’s CEO had a taped spot that spoke not only to the need for GE to change but how he uniquely appreciated Dell’s help and was pleased that other firms at that scale, like Ford, were getting on board.
Customers are a central theme for this keynote talk, and they are at the heart of the changes going on in Dell Technology and the related products. VMware is now a central part of the theme, as is VCE. Both of these brands were in question during the merger and Dell is reaffirming support for both and their critical roles in his view of the future of the data center. He is also reaffirming the breadth of solutions and validating existing relationships with partners ranging from IBM, to Microsoft, and AWS for cloud deployments, rolling against the concern that flows through customers with regard to lock-in when firms become this big and complete. Dell apparently doesn’t believe in lock-in (neither do I, actually, because it tends to result in stupid decisions).
Dell started out as a PC company and Michael Dell still believes that the client is a critical part of any solution. While it is clear the client will change, Dell is saying the company will not only ride out this change but drive it. He feels by leading in both infrastructure and client solutions, the company can better drive the coming change, as opposed to just being affected by it. Ford spoke to the fact that cars are quickly becoming rolling computers, they are working with Pivotal to help transform their efforts, and they are undergoing a massive internal change to adapt to the coming world of connected, autonomous cars.
Dell feels that his firm is now large enough and powerful enough to stand at the center of world power and advancement, which means he and his firm are now fully able to craft and drive change. This is important, but virtually all other firms are simply reacting to it. If he is right, this will give Dell Technologies a sustainable advantage as we move to the next age.
Wrapping Up: Dell: Go Big or Go Home
It is unusual to see the birth of a firm of the size and scope of Dell Technologies today. We seem surrounded by firms that are focused more on propping up stock and struggling to adapt to a changing world. Driving the change rather than being affected by it not only is enviable but it would be seen as functionally impossible by most of Dell’s peers.
Who knew that the saying, “Go big or go home” could actually become a workable strategy. It does kind of make you wish Michael Dell was running for president this year, doesn’t it?
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+