The Dell way

Now that Dell has successfully completed one year of privatization and has undergone a major transformation into an end-to-end solutions provider, what’s the vision you have for your company moving forward?

We see more and more building of end-to-end solutions. We’ve advanced our solutions capability even further and all our businesses continue to grow, be it vertical orientation, building out software, systems management, datacenter, or the client business. We want to continue our growing share in all our businesses. We’re very well-positioned for software defined datacenters. We’ve been able to gain share for seven quarters in a row in our client business, and would like to continue doing that. It’s a high priority for us for sure, while building next generation capabilities. The markets outside the US represent a significant part of our growth. We think that the next billion users will come from the developing markets as those markets advance in their requirements in IT.

What is it that makes you both nervous and excited about the key things you need to do?

I am excited about the data economy. I believe that as we instrument the world, all this data is a huge opportunity, and a lot of our customers are trying to figure out how to take out the data and turn it into insights. But it’s early days for anyone in that sector. Our services unit does a lot of work in that area. We have great software tools. Data has to be stored and protected, and our client business runs through everything that we do.

Are there any specific areas where you’re taking more interest?

We’ve been investing in markets outside of the US for a long time, and about half of our revenues come from there. We started the company in 1984 and in 1987, we got out of our diapers and were expanding outside the US, just three years later. We’ve been growing around the world for a long time now.

I think outside the US will grow faster in the next 10 years, not because the US is growing slower, but the outside will grow faster. The US is not making a lot of new users, as there are in India, or Indonesia, Africa, or Latin America.

As the world digitizes, there would be an enormous amount of info that would have to be stored—think about media, print, TV, going to digital tech. It’s running through every business’ retail, banking, or education. We’ve done a number of education projects for countries around the world. One difference between the developed and developing is the importance of hardware. Developed markets have hardware, software, and services. If you flip it around to the developing markets, then hardware is the biggest chunk and services is the smallest. If you go to a place where the per capita income is $1,500 a year, then there’s a lot more hardware there than services.

My point is that we’ve had a pervasive focus on emerging countries for a long time and we recognize that each country is at a different stage of requirement in terms of hardware, software, and services. It re-enforces the importance of having an end-to-end capability, so the demand may start with the client business and goes to server business and then to converged infra, security, system management, automation, etc. I don’t need automation if the cost of labor is low because I can use lots of people.

What tech excites you as an individual?

I am excited about the data economy and believe that all of this data can be turned into outcomes and results across industries, be it schools, hospitals, a business, retailer, etc. We’re just scratching the surface of that opportunity. We’ve been helping our customers store, protect, and secure information, but if you actually sit and say how many of you are using that data to make better decisions in real-time, then there aren’t so many. That’s a big opportunity. Now you get to re-think the business and as the cost of silicon comes down, you can put that silicon in anything. As a result, you’ve now got all this new data coming in, so it’s an exciting world to live in.

How do you feel right now about Dell going private?

I love it! During the 25 years we were public, we had Serbanes Oxley and all those regulations. More time was spent on reviewing things that had already happened in the past than thinking about the future. We don’t do that anymore. We think about our customers, how to serve them and make them successful. When our customers are successful, we’re successful. It’s as simple as that.

How do you see yourself competing in the enterprise solutions market, with likes of existing well-established players like IBM, HP, etc, in this space?

We started in the server business about 20 years ago, and we had 0% share. We kept growing and now we have the #1 share in North America and APJ. A lot of customers are very happy with our products. When I think about our growth rate vs their growth rate, then I clearly see that ours is a lot better than theirs.

How will Dell be different and be seen differently by customers?

I think we’re different from competition because we’re unencumbered by legacy. We’re not protecting the old mainframe and mini-computer. We’re all about open and scale out. We set up in our services business a mainframe migration factory in India to move customers off the old platforms. Plenty of customers came to us and said they want a transition.

Do you sense a perception challenge with Dell customers and new customers about putting Dell in the datacenter and core IT?

We believe in philosophy that if something comes along and it’s good for the customers, and you stand in the way of it, you’re going to create a problem for yourself. When server virtualization came along, it was so good for the customer that you couldn’t stand in its way. You have to think of a way to win over the customer you want. Think about what our competition is doing. Are these things really good for the customer? Or are they doing those things because of shareholder activities?

Do you think PC is still the best entry point in an organization?

If you go to a business and say that you’re now going to do something related to technology? What do you do? Do you go do a datacenter? You give people tools to be more productive, which is the PC, or in today’s terms, it will be a smartphone and a PC.

Look at the growth rate in the client devices in places like India and in Indonesia, southern Asia, Vietnam, Africa, etc. They’re all places where there’s a lot of economic growth with large populations, and all of a sudden, there’s increasing demand for technology. Every country has a government, banking sector, energy, retail, healthcare, education, and as they do anything, they need technology. We go to these countries and meet the biggest banks and quickly learn that the problem isn’t with the products, but how to get world class support. So one of the things we do is that we put this pro support in all over the world, which has helped us get booming businesses in these markets. That’s the foundation of the business.

Has the political change in India helped?

After the elections, our business in India just sky rocketed. I think it’s the confidence in the new government and some changes that we made to expand coverage that caused it, but I can’t really offer appropriate explanations for the level of growth we’ve had in India.

What are your investment priorities for India?

We’re very happy with our results in India. The business is growing fast, the team is doing a great job, and we’re investing in the business. We have roughly a quarter of our global team in India. We do everything in India’ manufacturing, R&D, sales, services. We have major sites in just about every metropolitan area in the country. It has been a fantastic place, and we’ve had a big presence there for 15 years.

Do you have any plans to visit India soon?

I would be coming to India next year.

What do you think of our Prime Minister, Narendra Modi’s ‘Make in India’ and ‘Digital India’ initiatives? He has been talking about making India into an export hub.

His address at Madison Square garden was amazing. We do have a large factory in Chennai. The challenge in India is not really the kind of manufacturing we do, but it’s the ingredient components. How do we get semiconductor manufacturing, displays? It would be amazing if the ancillaries were also located in India. So while making the end product is easy in India, but we also need parts support.

Do you have any plans to manufacture sensors and wearable devices?

We’re not going to manufacture those, but we will help customers use the data that comes from those to make better decisions. We’re selling some 3D printers, but we don’t have any investment projects inside Dell. Every 3D printer I see is controlled by a PC, so I like 3D printers. By the way, all virtual reality goggles are also controlled by a PC! So PCs may get smaller and get embedded, which is fine, but we don’t want to try to do everything.

Do you have any plans of getting into the smartphones space?

Think about HTC, LG, and Sony, they have pretty impressive products. That’s not even mentioning a long list of other companies in the smartphones business. These companies are losing unbelievable sums of money. I don’t want to play in that game. That’s the game they are in.

If you look at the 40 acquisitions we’ve made, those companies themselves had acquired about 150 companies before we acquired them. They’re all in the enterprise space—datacenter, software, security, systems management, services, IT automation, they’re not in wearables or smartphones.

Since a large chunk of your client business comes from consumers, doesn’t it make sense to leverage that and get into the smartphone space?

Enter a business where everybody is pretty much losing money? Samsung has had some interesting challenges recently. We don’t have to be in every business. Just because it’s fashionable to do it doesn’t mean it’s a good idea. We think about it from a long perspective and see what problems are not being solved. Does the world need another cellphone manufacturer right now? Currently, it looks like a very over-crowded market.