Dell has always been one step ahead of the biggest technology transitions, using that incredible foresight to build a $91 billion infrastructure powerhouse.
Vinu Thomas vividly recalls the impact Michael Dell’s first book, “Direct From Dell: Strategies That Revolutionized An Industry,” had on his view of how to succeed in the fast-moving technology world.
Dell’s book, which explained his game-changing direct-sales strategy for personal computers, helped inspire Thomas, an engineering student at the time, who went on to become chief technology officer of one of Dell Technologies’ biggest channel partners—$2.8 billion solution provider powerhouse Presidio.
“Even then, you could see that Michael had this remarkable vision,” said Thomas. “He was always a couple years ahead, and he had the ability to say, ‘Here’s what I believe the customer is going to need and here’s what the market is going to need.’ Michael Dell was the guy that I was looking at in terms of how he’s reinvented himself. For a young engineering student, I saw someone that had a real pulse on where the world was heading, where the business was heading and where the market was heading. His vision to bring together Dell, EMC, VMware and the Federation was just brilliant, as the industry was just getting into the world of digital transformation. My CEO used to say, ‘It’s really important not to be right at the wrong time.’ I think Michael has been right at the right time.”
In one of the fastest-changing industries in the world, Michael Dell
has always been one step ahead of technology transitions. Time and time
again, Dell has reinvented the company he founded in 1984 inside his
dorm room at the University of Texas in Austin.
In the 1980s, the future according to Michael Dell was selling PCs
directly to consumers, which in 1992 at the age of 27 made him the
youngest person to ever head a Fortune 500 company.
In the 1990s, the future according to Michael Dell was one that extended beyond desktop computers and laptops to servers.
In the last decade, the future according to Michael Dell revolved
around digital transformation, which resulted in him taking Dell private
and making the largest IT acquisition in history with the $67 billion
purchase of EMC to create what he calls “the essential infrastructure
“I knew if we could combine the No. 1 player in servers, the No. 1
player in storage, the No. 1 player in all things software-defined
infrastructure—VMware—that you’d have the essential infrastructure
company and an incredibly powerful juggernaut,” said Dell in a recent
interview with CRN.
That powerful juggernaut is now the worldwide leader in storage, servers and hyper-converged infrastructure with expectations to surpass $100 billion in annual revenue in a few more years.
Simply put, Michael Dell makes the impossible seem possible. His strategy is highly calculated, non-emotional. His IT IQ and foresight are unquestionable. His willingness to listen to peers and constantly learn from others has catapulted him to the 25th spot on Forbes’ list of the richest people on the planet. And, as VMware CEO Pat Gelsinger says, “He’s not full of himself.”
“He doesn’t believe he’s necessarily the smartest guy in the room,
but he has this thoughtfulness, this inquisitiveness where he is
synthesizing the inputs from me, from his partner Egon Durban [managing
partner and managing director at Silver Lake], from the other banks and
people that he’s working with—he’s plotting those inputs against the
industry trends and then in a thoughtful, deliberate manner, executes
against them,” said Gelsinger in an interview with CRN. “He’s willing to
take that and combine those thoughtful introspections of where the
industry is going and then make big bets and big moves against it. So
nothing Michael does is urgent, is—I’ll say—emotional. When you interact
with him, there’s just this deeply thoughtful view of the future. Then
he makes big hawkish bets.”
Making big bets, Gelsinger said, like focusing on internet sales to make PCs more attainable and service-friendly to the customer. Bold wagers such as turning Dell from a solely direct-sales force into a channel-focused powerhouse that now generates tens of billions of dollars in annual partner sales.
Risks like pulling the trigger on one of the biggest IT acquisitions
in history with Dell’s purchase of EMC and VMware while taking on
billions in debt. Michael Dell is able to tackle mind-bending tasks like
creating a unified sales force and culture that spans across seven
unique brands under the Dell Technologies umbrella.
In a nutshell, Dell’s big bets have paid off in truly game-changing
ways with the numbers to prove it. Round Rock, Texas-based Dell
Technologies is now the worldwide leader in servers, storage and
hyper-converged infrastructure with annual sales of more than $91
billion. And there are no plans to slow down as the company’s market
share in various segments is widening against rival industry titans
Hewlett Packard Enterprise and Cisco Systems.
Michael Dell is now stacking the deck for his next big bet: data infused with artificial intelligence.
‘THIS IS WHY WE CREATED DELL TECHNOLOGIES’
Dell can’t hide his excitement about what the introduction of 5G
networks will spawn in the IT world as the need for more data services,
edge computing power, less latency and 5G infrastructure is expected to
skyrocket to meet the new technology demands.
As businesses expect 5G to increase operational efficiency, IT
research firm IDC is forecasting that the 5G network infrastructure
market will soar from $528 million in 2018 to $26 billion in 2022,
representing a compound annual growth rate of 118 percent. A whopping 66
percent of organizations have plans to deploy 5G in 2020, according to a
5G use case and adoption survey by IT research firm Gartner.
When asked by CRN what the future of the IT world is, Michael Dell paused for a moment, “Do you remember when we had 1G?”
Each transition from 1G to 2G, 2G to 3G, and 3G to 4G created an
explosion of new innovation and spawned hundreds of new businesses, Dell
said, with the transition to 5G being the biggest opportunity yet. Dell
said the market shift from 3G to 4G created over 100 new businesses
that are currently generating over $1 billion in revenue.
“In each cycle as you go from 1G to 2G to 3G to 4G, it’s something
like three times bigger than the prior cycle,” said Dell. “So as we are
sort of on the pregame show of 5G, I think it’s incredibly exciting when
you combine all of that with the explosion in intelligent connected
things, billions of sensors powered by unlimited amounts of computing
power, all the data being created and the data now be reasoned over with
artificial intelligence and machine learning—there’s the opportunity to
transform all sorts of sectors. Whether it’s autonomous transportation,
manufacturing logistics, health care, energy—it’s enormously exciting.”
Dell believes the IT world is at the very beginning stages of a strong technology-led investment cycle.
“The implications here in terms of the new infrastructure, tools and
capabilities required to build all this out are quite substantial,” he
said. “This is why we created Dell Technologies. We see all these
opportunities, and we’re going off to go serve them.”
Dell Technologies is made up of seven closely aligned brands pushing
the technology envelope. Known to some as the crown jewel of Dell
Technologies, VMware is the world’s dominant virtualization leader and
has planted its stake in the ground as an emerging leader in hybrid,
multi-cloud platforms. Dell EMC is the global market-share behemoth in
storage. Dell leads in worldwide server share and is also one of the
largest PC vendors in the world. Also tucked inside the broad Dell
Technologies family are Virtustream for cloud computing management
software; DevOps application and cloud-native platform star Pivotal
Software; and a pair of security standouts in SecureWorks and RSA.
This massive portfolio spanning from the edge to core to cloud is the
broadest IT toolset in the world, according to many of the largest
One mega channel partner who is betting heavily on Dell Technologies
is World Wide Technology, an $11.2 billion Maryland Heights, Mo.-based
solution provider that believes Dell is perfectly positioned for the
explosion of 5G and AI ahead.
“If you think about it, Dell is the only OEM that has all the pieces
and parts that can really deliver on that end-to-end vision as 5G
innovation comes down and opens up the roads for things like IoT,” said
Scott Miller, senior director of strategic partnerships at WWT, ranked
No. 8 on CRN’s 2019 Solution Provider 500 list. “Nobody is going to be
positioned as well as Michael and the Dell Technologies core companies
with all the work that they’re doing with companies like Intel and
things like edge computing.”
Dell Technologies’ broad portfolio—its market-leading hyperconverged
infrastructure product VxRail; VMware’s virtual desktop infrastructure,
Horizon; SD-WAN by VeloCloud; and Dell’s AI analytics software—will no
doubt be a force to be reckoned with in a 5G world, according to Miller.
“If Dell continues to innovate and invest in R&D at the pace that
Michael has been doing, they’ll be out ahead with the AI and
machine-learning piece of it. So suddenly they’ll make OEMs with little
to no AI integrated with VMware seem far behind the curve,” Miller said.
Miller said that Michael Dell’s vision has created a company
reputation similar to the “old days” when the motto was you couldn’t get
fired for buying IBM. “If Michael continues to deliver on that road
map, they could put themselves in the position where CTOs are like,
‘Convince me why I should consider something other than Dell
Technologies platforms? Everything else you talk to me about is a
risk,’” he said.
‘HUNDREDS’ OF AI PROJECTS IN THE PIPELINE
When it comes to R&D, Dell Technologies is known for opening its
wallet. The company spent $4.6 billion on research and development in
its fiscal year 2019, up from $4.4 billion in fiscal year 2018.
One huge investment for Dell is embedding AI, machine learning and
deep learning into all aspects of the company with the goal of building
more effective offerings for customers.
“AI, machine learning, deep learning are so pervasive now. They’re
really enabling foundational technologies that are running through
everything we’re doing—from products to services to sales—and I think
that’s going to be true for every company that succeeds in the future,”
To put it more simply, “[If] you’re not using your data with AI, you’re doing it wrong,” said Dell.
Dell Technologies has been infusing AI and machine learning across its broad portfolio of products over the past few years. For example, Dell EMC launched a flagship enterprise data storage product line last year, PowerMax, which the company has dubbed the world’s fastest storage array. Built with end-to-end NVMe, PowerMax features a machine-learning and AI engine that makes billions of decisions each day to optimize performance based on all the different types of workloads.
Dell is building AI-specific workload servers and networking offerings such as its new PowerEdge server and PowerSwitch networking product lines. The company also launched a Dell EMC Ready Solutions for AI strategy aimed at accelerating customers’ artificial intelligence initiatives. Ready Solutions provide a slew of predesigned and prevalidated solutions and platforms that include Dell products strategically integrated with technologies from Nvidia, Intel and Hadoop.
There are currently “hundreds of projects” across Dell Technologies
focused on driving AI and machine-learning innovation. “We are very
focused on it internally, but we’re also focused on, ‘How do we help our
customers use their data?’” Dell said. “We build tons around creating
the AI-ready architectures and enabling the different workloads, the
different AI development platforms and making sure our infrastructure is
tuned specifically for those.”
Dell’s vision extends beyond the innovation aspects of the industry and into how businesses and organizations want to buy and consume IT.
In one of its most significant launches in years, Dell Technologies
recently took the wraps off its new hybrid cloud platform, Dell
Technologies Cloud. The on-premises platform includes two similar
offerings with a technology base of VMware Cloud Foundation integrated
with Dell EMC hardware along with a slew of software management, AI and
Dell Technologies Cloud provides a variety of options for how
customers can buy all the components inside, including Capex, Opex,
rent, lease, consume as a service or pay per use. Dell’s new Cloud Data
Center as a Service, for example, is a consumption-based management
service for VMware Cloud on Dell EMC infrastructure. Dell is backing the
new cloud platform with its popular Dell Financial Services arm, which
allows customers to buy the platform in three flexible consumption
offerings, which includes allowing businesses to acquire elastic
capacity and only pay for what they use.
To drive demand for Dell Technologies Cloud, Michael Dell is counting on his partners.
EARNING CHANNEL TRUST
Dell Technologies generated $4 billion in server revenue in the first
quarter of 2019, up 9 percent year over year, leading the global market
with 20.2 percent market share, according to IDC. The company is the
worldwide leader in storage with nearly $3 billion in sales, capturing
22.2 percent market share. In the rapidly growing hyper-converged
infrastructure market, Dell dominated in the first quarter by capturing
32.2 percent share with hyper-converged infrastructure sales of $587
million, up 64 percent year over year.
In Dell Technologies’ first fiscal quarter 2020, the company reported $21.9 billion in revenue, up 3 percent year over year.
Dell said these staggering numbers would never have been achieved if
the company did not shift its strategy from solely direct sales to a
channel-first model. Partner sales, for example, in its first fiscal
quarter spiked 16 percent year over year, accounting for more than 50
percent of the company’s overall revenue.
Dell’s channel strategy has come a long way since the company began its channel march in 2007.
Sonia St. Charles, co-founder and CEO of St. Paul, Minn.-based Davenport Group, started partnering with Dell a decade ago.
St. Charles remembers during that time attending an XChange event
hosted by CRN parent The Channel Company where former Dell channel
leader Greg Davis conducted a session on the company’s partner strategy.
“Nobody threw anything, but it was a hostile environment,” recalled St. Charles, honored on CRN’s 2019 Women Of The Channel Power 30 Solution Providers list. “The channel did not like Dell. They did not want to work with Dell. Greg was there to say, ‘How can we be your partner? What can we do? How should we design the program?’ It was a hostile environment. I said to my business partner at that time, ‘I think there’s a huge opportunity here because by the time Dell figures out how to be a player in the channel, if we start now, we could have a pretty strong business with them and be a significant player.’”
Davenport Group is now an all-exclusive Dell Technologies partner
with a “robust, thriving and growing” revenue stream that includes a 30
percent spike in VMware sales as well as a 40 percent revenue increase
in hyper-converged infrastructure sales year over year in 2019,
according to St. Charles.
“When we became an all-in Dell partner, it was a big bet. But since
then, Michael’s earned our trust. The company has earned our trust,” she
said. “His steady hands and his long-term vision coupled with the
patience to let things evolve and to take the appropriate time is
important. He’s done it right rather than rushed it.”
Quarter after quarter, Dell readjusts its channel incentives to fit
the market demands to drive higher margins for partners in hot markets.
With significant input from partners, the company’s channel executives
are continually tweaking the partner program to make it simpler and more
cost-effective for solution providers.
In a historic move this year, the company ended the Dell EMC Partner
Program. In its place is the new Dell Technologies Partner Program aimed
at driving channel profitability to the next level by making it easier
for partners to sell across the entire Dell Technologies portfolio. For
the first time, partners in the program will be able to seamlessly buy,
procure and sell solutions across the seven brands of Dell Technologies.
Dell is not only changing the way solution providers sell the Dell Technologies portfolio of businesses, but the longtime founder and CEO is building a culture of success across previously separate organizations.
GETTING TEAMS ‘EXCITED ABOUT THE MISSION’
Michael Dell oversees a company with over 157,000 employees, a number
that ballooned after the acquisition of EMC and its federation of
companies that includes VMware, RSA and Pivotal. Prior to the Dell
acquisition, partners said the messaging and culture across the EMC
Federation were lacking clarity and camaraderie.
“EMC was struggling with the messaging of the EMC Federation and how
they were going to get everybody to work together,” said Presidio’s
Thomas. “I knew that [putting it] in the hands of somebody like Michael,
who’s a big believer in the channel and enabling companies like
Presidio, that was going to be an easy way to get this fixed.”
Prior to the Dell-EMC merger, Michael Dell said he went to about
75,000 employees and asked them a simple question, “What was important
to them?” Dell said he discovered that across the previously separate
organizations, cultures were similar. He set out to combine the best of
his findings to implement a culture revolving around five strategic
“It’s our customers. It’s winning together. It’s innovation. It’s
results and integrity,” said Dell. “We were able to organize teams and
get everybody excited about this mission and this vision of where the
company is heading. Of course, people love to win. You’ve seen how we’ve
been gaining share. So you put a plan out there, you execute behind it
and do what you said you’re going to do—it creates a lot of momentum.”
Dell Technologies is projecting total annual revenue to be between
$99.5 billion and $103.3 billion by fiscal year 2022. Partners are
bullish that Dell can hit that revenue threshold as channel sales
continue to soar.
WWT’s Dell EMC sales are up 70 percent in the first quarter, while
the solution provider’s VMware sales are up 38 percent, according to
Miller. WWT is betting on Michael Dell, in part, because of his ability
to change with the times and not be obstinate when it comes to market
transitions, he said.
“They could have taken a stubborn attitude and said, ‘We’re going to
fight containers.’ But instead, they bought into containers. They could
have said, ‘Well, we’re going to offer public cloud.’ But instead they
said, ‘We’ll be inclusive of public clouds and we’ll just provide a
higher level to manage those workflows,’” said Miller.
MICHAEL ON MICHAEL
Michael Dell is one of few enterprise technology CEOs who after
decades still helms the same company he founded. The ripple effects of
his vision and passion aren’t just contained to the IT sector, but the
world in general.
“The real big macro view of this whole thing is because of people
like Michael, we’re providing better health care for people, better
education for people and we’re more focused on the outcomes of what
we’re doing for our customers rather than just trying to keep the lights
on,” said Miller. “It takes innovators like that to make big bets,
commitments, see through a vision that literally the whole world gets to
benefit from. It’s pretty cool, pretty big-picture stuff. Some people
like Michael are just wired to lead, and we’re all benefiting from it.”
Davenport Group’s St. Charles said Michael Dell’s vision and
excitement for the future is infectious. “I don’t think anybody loves a
company like the people who founded it. That’s proven to be the case
with Michael Dell,” she said. “When you talk to him or see him in
person, he’s excited. He’s excited about where the company is headed,
what he wants to accomplish, and he sees the vision of where they’re
going. It’s pretty inspiring.”
However, there is one subject that Michael Dell doesn’t get too
excited to talk about, which is himself. Getting him to express thoughts
on his own success and impact can be tricky.
He laughs off any questions regarding his legacy. “It feels a little
too early to be talking about that,” said the 54-year-old. When asked
about his thoughts on his personal success, he takes a long pause before
replying, “I don’t spend a lot of time thinking about myself, to tell
you the truth.”
When told he was receiving the No. 1 Most Influential executive spot
in CRN’s Top 100 Executives of 2019, he quickly responded with, “All the
credit goes to our incredible team of engineers, scientists and Ph.Ds,
and our teams around the world that build relationships with partners
Although Dell isn’t keen to talk about himself, he will explain his
personal philosophy, which revolves around continuous learning,
discovering market trends, speaking to various industry experts, working
hard and becoming “smarter today than I was yesterday.”
One passion has stood out above the rest and has fueled his massive success.
“I love technology,” said Dell, who took apart the first computer he ever received piece by piece to examine the circuits. “I love to learn about new things, and I love business. That’s been a pretty good combination for me in terms of my life journey. I’m going to stick with that.”