After almost a year of moving through the long process of regulatory approval, Dell and EMC formally reinvented themselves today with the launch of Dell Technologies. The company laid out its organizational structure going forward, all of which had been made public previously. They also doubled down on their assessment of the new company’s significance to the marketplace, not just as a share leader by virtue of the consolidation, but as a company willing to disrupt itself.
“This is a landscape-changing event,” said Michael Dell, Chairman and CEO Dell Technologies, to the new company’s inaugural press and analyst briefing. We have stated for a long time that we think scale matters, and that innovation, and breadth and go-to-market reach matter as well. Dell Technologies can do more to advance innovation at scale than any company on the planet.”
Dell said that his new company is uniquely positioned to have a massive impact on people’s lives as digital transformation makes the cost of making devices intelligent drop to zero, opening up new opportunities.
“We are standing at the next quantum leap in human progress,” Dell said. “As the number of connected nodes will grow, we will use this to get insights and build a better world.
“We will be THE trusted provider of infrastructure for the next industrial revolution,” Dell added. “The real show is just getting started. Dell Technologies will stand in the centre of the action.”
The two largest parts of the new company will be the client solutions business, which will continue to be called Dell, and the infrastructure solutions business, which is now Dell EMC, and based in EMC’s old digs in Hopkinton Mass. The third business unit is VMware, although the remaining companies of the old EMC Federation will all keep their independence as well and retain their freedom to develop their own ecosystems.
David Goulden, the President of the Dell EMC Infrastructure Solutions Group emphasized that the new company isn’t just based on the old technologies that made both Dell and EMC major players, but will be industry-leading technology. While other players in the market have been emphasizing that Dell EMC will be too deeply entrenched in its legacy businesses to embrace the cutting edge of technology, Goulden stressed the opposite was true.
“This combination redefines the enterprise IT market with an unmatched technology portfolio,” he said. “Our strategy and portfolio enable customers to build new cloud-native applications. We believe hybrid cloud is the future of the industry, and our hybrid cloud strategy is based on a modern data centre architecture. We are already a leader in cloud IT infrastructure, according to IDC.”
All this shows that Dell EMC is more than willing to disrupt itself to drive innovation, Goulden said.
Michael Dell made a similar point in addressing concerns that Dell Technologies would be too burdened by the debt from the $60 billion acquisition to do the R&D necessary to be on the cutting edge.
“Our debt payments are much less than our competitors pay out in share buybacks and dividends,” he said. “As a private company, we also don’t have to cater to short term thinking that exists in the market.”
Dell as a separate company had not been among the leaders in per capita R&D spending, but Tom Sweet, Dell Technologies’ Chief Financial Officer, said that the combined spend of the two legacy companies in the new company would be in the $4.5 billion range.
“We are satisfied with that level of spend, although we will continue to look at that as we go forward,” he said.
Sweet also reaffirmed a position that Dell has taken throughout the integration, that there will be no abrupt changes to existing Dell and EMC solutions.
“We are committed to our product families,” Sweet said. “Over time, we will think of what might best come together, but for now, we want to reassure customers that we will support all our product families as we move forward.”
On the Canadian front specifically, there will of course be changes, particularly to personnel, as the two companies come together, but Dell Technologies is not, for the moment, making any announcements there. Indeed, the company is stressing that on Day One, very little is changing. Existing tools, processes, reporting relationships, account sets are all the same, with the big difference being the dramatically expanded product portfolio that partners can sell.
The Dell Technologies Canadian Channel Partner Summit is scheduled for next week in Niagara Falls, and it is possible more details will be announced in conjunction with that event.