One Year In: Going Big Pays Off for Dell Technologies

Dell Tech logoLast week, Dell Technologies celebrated the one-year anniversary of its $67 billion acquisition of EMC, which was the largest tech deal in history.

One year ago, many doubters posited that the combined entity would be too big, too slow, and have too much debt to succeed in today’s technology industry. They argued Dell would do better to split out its client and infrastructure divisions, ala HP, instead of making this massive acquisition. No way, they said, that this mega company could gain market against leaner, more streamlined companies. They predicted culture wars, and that big-name senior executives among the acquired companies, would move on rather than work for and report to Michael Dell.

But one year in, Dell Technologies, which is now the world’s biggest tech company, has a lot to celebrate, as outlined by Dell Technologies’ CMO Jeremy Burton in last week’s analyst call to discuss how the company’s vision and organization are coming together.

Big Has Been Good

At the outset, critics argued that the Dell’s deal to acquire EMC would result in a big, lumbering giant, unable to gain market share in the fast-paced technology industry.

A year later, financial results have proved the critics wrong: Fiscal second quarter revenues were $19.3 billion, up 48% from the previous year. Putting the icing on the cake, Dell Technologies also announced that it signed a multi-year deal to provide GE with infrastructure and end-user computing solutions, including servers, storage, backup and related professional services.

These results aren’t accidental. The company designed the merged entity to foster both economies of scale and agility under the Dell Technologies corporate umbrella:

  • Dell’s client solutions business, under long-term leader Jeff Clarke, retains the Dell brand.
  • Dell EMC includes Dell and EMC infrastructure solutions, RSA and Virtustream businesses.
  • Dell EMC Services supports both Dell and Dell EMC.
  • Strategically aligned businesses Pivotal (which has substantial external investments, and SecureWorks, and VMware (both publicly traded), operate fairly independently.

Each brand has a role to play in Dell Technologies’ vision to help customers transform and their businesses for a digital future. For instance:

  • Pivotal provides a next-generation software development platform for the cloud
  • VMware, Dell EMC, Virtustream can help IT migrate applications to public, private, hybrid clouds.
  • Dell end-user solutions can help improve workforce productivity and reduce costs
  • RSA and SecureWorks provide comprehensive, instead of patchwork, security solutions to safeguard applications and data.

A Little Bit of Magic

Screen Shot 2017-09-11 at 1.46.35 PMDell Technologies’ brand campaign, “Magic can’t make digital transformation happen, but we can,” has also helped to catalyze growth by educating people about the capabilities the company brings to the table. According to Burton, more than 95% of people know the Dell Technologies brand, and 14%-16% of people can now delineate the difference between Dell and Dell EMC, with this trajectory rising. If you’re a golf fan, it wont’ come as surprise that more than 20% of PGA viewers can understand the distinction.

Admiration for the Dell Technologies brand and recognition of the company as a tech industry thought leader are growing as well. Perhaps most important, the company says that 91% of the customers surveyed believe Dell and EMC have delivered on their pre-merger promises.

Improving Economies of Scale

Segmented market approach.pngMeanwhile, economies of scale are also kicking in. As a combined entity, Dell Technologies has more leverage to source components at a lower cost. The company is also benefitting from an expanded, but segmented distribution channel that caters to the sales and service requirements of different customer segments. According to Burton, this segmented coverage model is roughly doubling the company’s revenue growth in under-penetrated accounts. At the same time, Dell is growing channel sales more rapidly than its competitors, and its channel partner have brought in over 10,000 new customer accounts in the past year.

Paying Down Debt

Another rap on Dell’s acquisition of EMC was that it would saddle the company with crippling debt. Asset divestitures helped the company pay down $9.5 billion of the debt; strong revenue growth gives it enough cash to continue to more than service the debt.

Innovation on the Rise

Finally, critics doubted that what would become the world’s largest tech vendor would be able to innovate. However, with $4.5 billion annual R&D investment, and 22,775 patents and patent apps, Dell Technologies ranks second in patent power in the industry. From clients to the cloud, and from infrastructure to security, Dell Technologies has racked up hundreds of awards (62 at CES alone) in the past year, and is #1 in market share in virtually every market it plays in.

In addition, Dell Technologies Capital spends more than $100 million annually, and has made more than 70 investments. All relate directly to Dell Technologies’ strategy and interest, providing the company with an inside view into new trends, and/or possible acquisition opportunities.

Summary and Perspective

Perceptions are the hardest thing to change, and changing perceptions are usually a pre-requisite to changing people’s judgments and behaviors. Just one year in, Dell Technologies has moved the needle–in a positive direction–on both.

Now, as businesses of all sizes and from all industries start ramping up digital transformation initiatives, Dell Technologies’ bet looks like it will pay even bigger dividends. With its deep technology, sales, marketing and service coverage, Dell Technologies is on track to capitalize on the market’s demands for the next wave of innovation.

 

 

As Machines Get Smarter, How Will the Way We Live and Work Change? Part 2: Shifting Human–Machine Dynamics

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Every day, we see new examples of how technology is reshaping the dynamics of human–machine partnerships at work and at home. Some of the changes we can already see include everything from smart watches to drones to self-driving cars.
How will the next wave of technology disrupt our lives and change the nature of human and machine partnerships, and how quickly will this disruption happen? Although no one knows the exact path this latest round of innovation will take, Dell Technologies has partnered with Institute for the Future (IFTF) to explore how these trends are likely to take shape in their new report, The Next Era of Human–Machine Partnerships: Emerging Technologies’ Impact on Society & Work in 2030 . In the first post in this two-part series, I discussed the emerging technologies that will underpin these changes. In this second installment, I examine how these technologies are likely to reshape human–machine dynamics and how we can start preparing for them.

What will the brave new world of 2030 look like? The Dell/IFTF study highlights the following key shifts in human–machine relationships:

  • People become digital conductors. We already use apps for many tasks, from finding jobs to hailing rides. Personal assistants—or chatbots—help us turn off the lights, monitor home security and order products online. As technology helps us to orchestrate more activities and tasks, more of us will become “digital conductors,” using more personalized apps to predict, meet and respond to more of our needs. Expect solutions to help us monitor and care for elderly relatives, understand the role our emotions play in making a decision and help us to run errands. We’ll “conduct” these apps through connected devices. In the future, machines will become extensions of ourselves. Honor, for instance, has developed a platform to match elderly patients with doctors and care professionals as well as coordinate meals, transportation, housekeeping and companionship. OhmniLabs is working on an affordable telepresence home robot. With one click of a button, a person can be in the same room as his/her family, friends and colleagues without being physically present.
  • Work chases people. There’s little doubt that machines will replace humans in many jobs: PwC predicts that robots could take over 38% of U.S. jobs in the next 15 years. However, IFTF authors contend that new jobs will replace them. The percentage of “gig” or contract workers will grow to make up 50% of the workforce by 2020. Instead of workers looking for jobs, organizations will compete for the best talent for specific jobs, using solutions such as reputation engines, data visualization and analytics to automate the process. Companies will also change the way they work, adopting more capable solutions that streamline collaboration across geographies and time zones. Glowork, the first women’s employment organization in the Middle East, has launched a platform that links female jobseekers with employers. So far, it has put more than 3,000 women in the workplace and located work-from-home jobs for 500 women. By leveraging big data, employers can search for candidates based on different search criteria.
  • In-the-moment learning becomes the norm. The U.S. Bureau of Labor Statistics says that today’s learners will have 8 to 10 jobs by the time they are 38, and IFTF estimates that 85% of the jobs they’ll be doing in 2030 haven’t been invented yet. This makes the ability to learn new skills a worker’s most valuable asset. But how will people—especially the growing population of gig workers—learn new skills? Probably not through traditional HR and training processes. Instead, they’ll need to do more learning on the fly, with “in-the-moment” learning becoming the norm by 2030. New technologies such as AR and VR will facilitate this trend, guiding, for example, a new field service technician through an HVAC repair. DAQRI, which is based in Los Angeles, is using AR devices to display digital work instructions in workers’ physical environment, helping them to complete tasks more efficiently.

Technology: The Fabric of Our Future Lives

No one knows exactly how these trends will unfold; and while some people are excited about them, others are uneasy about what may happen. Will machines steal jobs from people and lead to unemployment? Will bad guys create evil robots like the Terminator in the movie of the same name and Ava in Ex Machina?

But whether we’re ready or not, it’s safe to assume that technology will continue to play a bigger role in our business and personal lives. Think about it: the internet was a novelty 20 years ago, and “dumb” phones outsold smartphones until 2013. Now, both are ubiquitous. The next round of technological change is likely to be as inevitable and pervasive, so the best route is to start preparing for it by asking critical questions, such as the following:

  • How can we, as individuals, get smarter and keep learning?
  • What skills are most likely to be automated?
  • What human skills will have the most value?
  • How can we use new technologies as tools to accomplish goals, for our businesses and ourselves?
  • How can we build people skills and digital infrastructure for the future?

Recognize that what seems disruptive today will become part of our individual and business fabric tomorrow. By thinking proactively about the next level of human and machine interactions in the workplace now, we will be much better positioned to reap the benefits in the future.

You can read the full Dell/IFTF report  for more food for thought and take the Dell Technologies Digital Transformation Survey to help assess your organization’s readiness for the future. 

This is the second post in a two-part series sponsored by Dell. The first post examines the emerging technologies that will underpin changes in human–machine dynamics.

As Machines Get Smarter, How Will the Way We Live and Work Change? Part 1: Key Technology Drivers

You don’t need to be a genius to figure out that machines are getting smarter. Every day, we see new examples of how entrepreneurs, businesses and academics are using new technologies to reimagine how things get done. Not that long ago, for instance, ADT provided armed security guards to protect property. Today, ADT has transformed to become the largest professional installer of home automation solutions in the United States. From manufacturing robots to self-driving cars to devices to help us manage our homes, technology is reshaping the dynamics of human–machine partnerships.

Depending on your point of view, the next round of innovation may be exciting, scary, confusing, uncertain—or all of the above. How will the next wave of technology disrupt our lives and change the nature of human and machine partnerships, and how quickly will this disruption happen?

Although no one knows the exact path this latest round of innovation will take, Dell Technologies has partnered with Institute for the Future (IFTF) to explore how these trends are likely to take shape in their new report, The Next Era of Human–Machine Partnerships: Emerging Technologies’ Impact on Society & Work in 2030. In this post, the first in a two-part series, I examine the emerging technologies that will underpin these changes. In the second installment, I discuss how they will reshape human–machine dynamics and how we can start preparing for them.

The Next Technology Wave

According to the Dell/IFTF study, the following key emerging technologies will radically change how humans and machines engage:

  • Robotics: Robots have been around for a while—especially in manufacturing, where they’ve mainly performed repetitive and/or dangerous tasks that don’t require a lot of problem-solving skills. But technology is expanding robots’ capabilities, enabling them to do more in manufacturing and to take on new roles, from driving our cars to administering physical therapy. For example, some rehab facilities already use wearable “exoskeletal robots” to help patients recovering from spinal cord injuries and strokes to stand, reach for objects and relearn to walk.
  • Artificial intelligence (AI) and machine learning make computer programs and machines “smart” by enabling them to learn, change and predict patterns as they are exposed to new data, as well as to converse with users to answer queries and provide insights. Unlike humans, programs that use these technologies can crunch massive amounts of data quickly and efficiently. For instance, many financial trading firms use these systems to predict and execute high-speed, high-volume trades. In healthcare, computer-aided diagnosis (CAD) is helping radiologists find early-stage breast cancers that might otherwise be missed. And, as I wrote about previously, Alice (which is powered by Circular Board and partnerships with Dell and Pivotal) is the world’s first AI platform for female entrepreneurs. Alice uses machine learning to guide and connect these women with mentors, referrals, capital and other resources needed to start and grow their businesses.
  • Virtual reality (VR) and augmented reality (AR) are transforming how we engage in both virtual and physical worlds. VR “blocks out” the physical world, taking the user to a simulated, digital world. VR is often used for training, such as in the military, where soldiers can prepare for combat situations without the risk of death or a serious injury. AR adds a digital layer on top of the physical world. The best-known example is the AR game Pokémon Go, which uses your smartphone’s GPS to mark your location and move your Pokémon avatar, and uses your smartphone camera to show you digital Pokémon in the real world.
  • Cloud computing: I know, after 20 years, cloud computing no longer seems like an emerging technology. However, cloud computing is the backbone that provides scalability, flexibility, cost, speed and ease-of-deployment benefits that enable businesses and people to continue to take advantage of newer technologies. For instance, Chitale Dairy’s “cow to cloud” initiative uses the cloud to improve farming for 50,000 dairy farmers in India. Chitale has outfitted more than 200,000 cows with RFID tags to monitor their health habits. Information from the tags is sent to the cloud to be analyzed, and alerts are sent to local farmers regarding when to make dietary changes or arrange vaccinations.

The Chitale story also underscores how some of these technologies are maturing, converging and coming to life as part of the next generation of the Internet of Things (IoT). According to Liam Quinn, chief technology officer and SVP of Dell Technologies, the cloud provides the technology required to dynamically distribute and allocate resources across different platforms and devices. Now, organizations can attach gateway-to-legacy IoT systems so they can send the data they’re already capturing to the cloud to analyze and use it to run their businesses more intelligently. These advances also make IoT more cost effective and manageable, and they will enable companies to develop entirely new IoT solutions to improve efficiencies and facilitate new business models.

You can read the full Dell/IFTF report  for more details and insights on these trends and take the Dell Technologies Digital Transformation Survey to help assess your organization’s readiness for the future.

This is the first post in a two-part series sponsored by Dell. The second installment looks at how these technologies are likely to reshape human–machine dynamics and how we can start preparing for them.