Michael Dell talks EMC deal, leadership style, cyber attacks and how to prevent digital fear among companies
Imagine striking the biggest tech deal of all time. Well, Michael Dell, founder of the eponymous tech company, is trying to do exactly that. Three weeks ago, the giant announced a $67bn bet on digital storage company EMC. “We believe that scale matters,” says Dell. “We believe that converged infrastructure is real. The software-defined data centre is coming, and our new company is incredibly well-positioned for that.”
The 50 year-old Texan, who’s worth around $19bn, founded the firm in 1984. Three years later, he expanded to the UK, aged 22. “It was my first outpost. It’s a fantastic place to do business; we’ve got fantastic clients and relationships here,” he says.
Many have been questioning the Dell/EMC deal: is it just too big to close? Will the former sell off some of the latter’s assets to help pay down some of the debt it’ll accrue? While Dell makes itself bigger, competitor HP split itself into two companies last year, and IBM has sold its Intel-based computer server business to Lenovo. “I’ve never been afraid to do things in a different way to other people. And it seems to have worked out for me pretty well so far, so I’m just going to keep doing my thing,” says Dell. “We know that many customers like to buy things together – whether it’s PCs and servers or servers and storage… Our approach is not to just buy everything – let’s be clear on that. There are alliances and partnerships and we believe in choice and in openness… And there are lots of different opinions out there about which approach is better, but we’re very comfortable with the approach that we’re taking as being a winning approach.”
Part of Dell (the company)’s reasoning is that it wants to position itself to help client businesses cope with what Dell (the person) calls the “digital fear… Businesses are realising that whether they make products or services, they have to use information to improve upon those in the actual event, and make them better. And the cost of sensors and bandwidth and computing keeps going down at such a rate that it’s possible to either completely invent a new business or reinvent a business using digital technology. What happens if Uber or Airbnb show up in their industry?” This, he says, means that businesses are having to become software companies – “because that’s where the value is shifting to.”
For many companies, however, data centres are just the sum of three decades’ worth of tech layering. You had the microprocessor, then shared storage area networks, networks attached to storage, and the network itself. For each new problem, a new box appeared – and that’s before you’ve even moved onto firewalls, web authentication and encryption. To progress, they need to “move the problem up the application and data layer, and get out of the business of managing all these silos… Companies that aren’t able to make that journey, they transition, they won’t be here anymore.”
And this explains why Dell is “very excited” about the company he’s going to be able to create – particularly with EMC’s specialist cloud computing firm VMware under his belt. “It’s a leader in storage, virtualisation and PCs. But it’s also very well positioned in the IT of tomorrow, in what’s referred to as the ‘Third Platform’.”
But people have been asking whether there will be too much overlap between the company’s storage capabilities and EMC’s. Dell doesn’t see that as problematic. “One thing I should be very clear about is that VMware will remain an independent public company. And its ecosystem of partners – we’re not going to change or interrupt the relationships it has with those partners.
If you look at the two companies and the two portfolios, they’re actually highly complementary. In storage, there are some overlaps, but what our storage product lines are trying to do and what the EMC products are trying to do are somewhat different. And EMC probably has seven or so main storage product lines. We have one or two main storage product lines. Going from seven to eight or seven to nine is not a problem at all. We’d much rather have an overlap than a gap, and so we’re going to continue all the product lines. And we’ll continue to enhance them and improve them. We’re not going to leave any customers behind here.”
But trends beyond the company aren’t always rosy – I ask him about cyber attacks. “In our SecureWorks business, we see, on many days, 150bn network events a day,” says Dell. “I think the problem is far more significant than most people realise. One of the reasons we got into cyber security is that we design our company from the customer back. And we went to customers and we said ‘what problem are you worried about that hasn’t been solved for you?’ And in the late 2000s, certainly in the financial sector, cyber security was at the top of the list.” Dell has invested heavily in the area – and EMC’s RSA Security will “add significantly” to its response. “This is a very difficult problem for companies to deal with. And it’s not just companies – it’s healthcare, public sector. A lot of the things we’re seeing have geopolitical ramifications. There are state-sponsored groups; it’s a very messy space.”
Dell’s tone becomes lighter when asked about the Internet of Things. Before we all started saying IoT, there was embedded intelligence, he says – “if you buy a Google Search server to search your company’s internal documents, that’s also a Dell product. We have 5,000 examples like this across every industry you could think of.” Dell has a whole group inside the company devoted to IoT-related software, services and hardware. Indeed, when we met, Dell was days off going to see Siemens about opportunities in the space. In the last few weeks, it’s been announced that the engineering giant is putting sensors on trains to gather data. The sector is too important to ignore. “We’re just jumping in all guns blazing because we think it’s a big opportunity.”