The Doors’ Break On Through to the Other Side is an interesting choice of song with which to make an entrance. Given its relative lack of chart success and references to getting high, the song rarely gets a public airing, at least at technology conferences, but then Michael Dell, chairman and CEO of the newly formed Dell Technologies (following the completion of the $67bn acquisition of EMC in September) is from Austin in Texas, the town they want to keep weird.
Dell no doubt sees it differently. Emerging from a deal which has taken over 12 months to complete is a little like coming up for air and at Dell EMC World 2016 he had the oxygenated bounce of a man about to make his first million, not someone who was recently ranked by Forbes as the 35th richest man in the world. At the age of 51, he deserves a medal for sheer longevity and you don’t kick around in the business for this long without learning a trick or two.
Certainly plastering #1 after pretty much every product category is cheeky. Number one in PCs? Most analysts would say Lenovo and HP were ahead of Dell although Dell says the company measures in revenue not in units. OK that’s cheating, although as he suggests, it could be a more valuable indication of market strength. Still, the company is woefully short in supplying analyst sources for its ranking claims.
Research and development
“If we want to be number one in units, it’s pretty easy,” boasted Dell, who added that profits to re-invest in innovation are more important. That re-investment is certainly considerable. The company claims to have pumped $4.5bn into R&D over the last year, a combined figure from the various parts of the business including EMC, VMware, Pivotal and of course Dell itself.
Of that $4.5bn Dell claims over 90 percent is software, hardly surprising given the fact EMC and VMware already hold a lot of patents, at least according to the IEEE Patent Power Scorecards - Dell says the company now has in excess of 20,000 patents or patent applications. However he is also keen to hold onto his hardware roots and is “committed” to the PC market. The company has an intriguing line of hardware products ready to be unveiled at CES in January next year. It’s all a bit hush-hush.
“I feel like a kid in a candy store,” says Dell referring to the collective patents of EMC, VMWare, Pivotal, RSA and Dell. “When you take in the totality of what we can create – and I’ve tried to describe how we see the future over the next two decades, how we see the evolution from information technology to business technology and how it’s really just the beginning of a whole new age in terms of how information is being used – I’m very excited and we are really only at the beginning of an interesting new era of human potential.”
So what is this view of the future, this potential?
Dell talked about “the next industrial revolution” and how increased connectivity, sensor-driven machines and machine learning will drive change. Nothing new here. He also talked about increased threats and cyberattacks. “Lives are at stake here,” he said, claiming that Dell Technologies handles “over half the world’s mission critical data” in some form.
Much of what Dell talked about was geared up to this point, the idea of the secure datacentre, preferably run by Dell Technologies, underpinning the modern world of information management. However, there are limits. He dismissed the idea of joining the ranks of mobile handset makers (“No. The world doesn’t need another smartphone maker”) but said that for every new smartphone there is a demand for data and datacentres. So in essence, Dell’s vision is that the world, if not the galaxy, will become one large datacentre, run by Dell and maybe a few others.
And at the heart of these datacentres? Dell talked about the company’s claim that 2016 is “the year of all-Flash” or YOAF. Flash storage he said will dominate, referring to it as “yoafing…we are all yoafers.” Thanks to the EMC acquisition, Dell Technologies is now number one in all-Flash arrays, according to IDC’s Q2 2016 numbers but this is an increasingly competitive space. While Dell talks about consolidation, at the moment at least, the relative infancy of all flash and rapid hybrid cloud growth will mean market fragmentation.
So what does this mean to Dell’s overall plan? He certainly talks a good game, referencing microbots, AI and increased automation. This drive towards increased change, a digital transformation with a focus on speed and automation conjures a line from Douglas Adams The Hitchhiker’s Guide to the Galaxy:
“A common mistake that people make when trying to design something completely fool-proof is to underestimate the ingenuity of complete fools.”
Therein lies Dell’s problem. It may think it has the answer but most people and businesses still have no idea what the question is.
As Dell EMC World ends its tenure in Dell’s Texan hometown Austin – the company claims to have outgrown the city that has played host to the event since 2011, so is moving to Las Vegas in May next year – the key takeaway is that just three years after taking the company private again, Dell is sitting on top of one of the largest tech companies in the world. If nothing else, it’s a lesson to any listed company what can be achieved away from the gaze of public investment.
“We love being private,” said Dell, a smile as wide as the Colorado River. “I haven’t found a downside yet.”
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