In firms, PCs and smartphones coexist in a multi-device world: Michael Dell
In an interview on the sidelines of Dell World 2016 in Austin, Texas, on 19 October, Michael Dell, chairman and chief executive of the world’s largest privately-controlled technology company, Dell Technologies, shared his views on the prospects for the combined Dell-EMC. Edited excerpts:
In a world of smartphones, you remain committed to a PC-centric world. Why?
We listen to customers. I did not say that smartphones are not important. I believe it’s a multi-device world. In 2012, the idea was smartphones here and PCs there—it’s not correct now. In organizations, smartphones and PCs coexist in a multi-device world. The view around that time (that the) PC was dead created an opportunity for us. Many customers are not giving up on PCs. Liken this to transportation, where people use different modes like bicycles, cars, trains and planes. Computing is like that too with tablets, smartphones, PCs, etc. PCs offer another way of computing.
But PCs, servers, storage, etc. are commoditized businesses...
...in the PC segment, we have gained share for 15 quarters in a row. We are doing very well, we are growing. When a commercial client chooses Dell PCs, it chooses us for the services and support and also Intel and AMD (Advanced Micro Devices Inc.) and Microsoft. It’s another way of saying these are our suppliers that have a higher share. Therefore, we should be more concerned about our suppliers if margin erosion is a concern.
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One of the reasons for our success is because we have brought tremendous value for our customers, democratized technology by making it more available and more affordable. There is no shortage of competitors in the business we are in. We need to provide high levels of service, continue to innovate, build great relationships and customers will reward us.
How are you tackling issues around cultural challenges in the merged Dell-EMC entity?
We had a decade-and-a-half lead-up to the combination. And it goes back to 2001 when we had announced an alliance called Dell EMC. The apparent intent was that Dell was going to sell EMC storage technologies to its customers. We did billions of dollars of sales. Under the cover, Dell server technology was embedded into pretty much every storage product line that existed and EMC became our largest OEM (original equipment manufacturer) customer in the world. And so our teams, beginning 2001, learnt how to work together in terms of supply chain, R&D, sales and importantly culture—we became friends.
The businesses don’t have a lot of overlap. In 2009, we had a fairly in-depth look at whether we should combine the companies—reams of analyses, we had consultants from both companies, we had directors from the boards of both the public companies meeting secretly in places, and we were negotiating combining both the companies. However, because of the financial crisis at that time, we decided not to do so.
Then, in 2013, we took the company private. Everyone thought the PC was dead. So, we bought the company back. Thank you very much. And in 2014, I called my friend Joe Tucci (Joseph Tucci is the former chairman, president and chief executive officer of EMC) and said, “Why don’t we re-examine what we looked at five years earlier, refresh all the analyses and see if it makes sense now?” So, that was more than two years ago, which resulted in our October 2015 result.
I got some great advice. I talked to a number of executives who had gone through a number of combinations like these—some had succeeded; some had failed. One of the things that a number of them said: You should as early you can, communicate the strategy of the new company and its structure. They also said, with all due respect to the current CEO of EMC, you should act as if you were leading the new company from the day of the announcement of the planned merger, not the closure date. Legally, you are not supposed to do that. And I didn’t break any laws.
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I was very present within EMC from the day of the announcement—at the leadership meetings, meeting the whole team, learning about the teams, and as we come together as one family and the cultures are a lot more similar than different.
What’s the strategy you are employing to handle a smooth integration?
We communicated the hierarchies within the organization to our teams. Not everyone has got exactly the job they want. Given the all-star teams we have in the combined Dell-EMC group, we effectively have an Olympic team. You must always start with the strategy. If you do it by personality or anything else, it will be a totally wrong way to do it. From the strategy, you must define the structure to achieve the strategy. You lay out the strategy. Then find out who are the people from within, or outside, the organization for each role to accomplish the strategy.
For each role, you have several candidates. So you find the job—are you excited about the job, are you passionate. Some may want to play golf, instead.
But if you are great and want to be part of the Olympic team, we have one heck of an opportunity for you.