Thursday 18 January 2018

Welcome to Dell World, a place where Michael reigns supreme

Another angle... our technology editor in Texas

Deal-maker: Michael Dell is looking to the future of data with the EMC acquisition.
Deal-maker: Michael Dell is looking to the future of data with the EMC acquisition.
A statue of the Queen's Bargemaster stands outside the EMC Corp. offices in London. Photographer: Simon Dawson/Bloomberg
Adrian Weckler talks to Michael Dell in Austin, Texas.
Adrian Weckler

Adrian Weckler

It must be nice to be Michael Dell. At his first meet-and-greet with press and analysts on Tuesday night in Austin, Texas, Dell answered a long, complex question with a single answer and a smile.


The question, from a 'Fortune' magazine journalist, was whether Dell's $67bn acquisition of EMC was a reaction to intimidating competition from companies such as Amazon and, if so, what that implied about Dell's bid.

"No," he said with a smile. And he just stood there on the room's stage, looking cheerfully down at the reporter.

The silence was awkward only for the press and analysts. They eventually laughed. Dell then went on to make a few more remarks about it, but clearly wasn't under any stress or pressure to do so.

In fact, all throughout his 'Dell World' event in Texas's capital, Dell had the demeanour of a man who doesn't really sweat what you or I think of him any more. He doesn't have to choose his phraseology to the utmost degree for fear of how analysts or stockholders might interpret it.

All in all, he's pretty chilled out.

He was certainly like that when I bumped into him before the analyst meeting. Together with another journalist (The Irish Times' Ciara O'Brien), we chatted casually about Ireland, EMC and a potential pub crawl with Bono.

Dell was totally easy-going. He lingered a while, enquiring a little about EMC in Ireland and joking that they'd all "be one big happy family".

He never once seemed worried that he was talking to journalists on the record about stuff. Why would he? It's his company - he doesn't have to worry much about we think, no matter how puffed up we present ourselves as.

It must be nice to be in that position. It's one of the reasons that big tech startups, even ones with hundreds of millions in funding from investors eager for a return, put off an IPO for so long. They can make bold bets without significant agitation by committees of shareholders who believe they know better.

And Michael Dell is currently taking a very, very big bet on the future direction of the IT industry in his bid for EMC, a deal that would represent the biggest ever 'pure' tech merger. (The $181bn AOL-Time Warner deal in 2000 is regarded as a mixed-media deal.)

Already, big industry rivals have taken potshots at the deal. HP's Meg Whitman mocked the $2.5bn a year that Dell would have to pay in interest payments for the massive debt being taken on to finance the takeover.

"That's $2.5bn that they will allocate away from R&D and other business-critical activities, which will keep them from better serving their customers," Whitman wrote in a memo to HP employees.

Whitman further charged that the Dell-EMC deal would be a "massive undertaking and an enormous distraction for employees and their management team." She said that "disruptive" machinations while merging the companies' sales teams and products would cause "chaos". And Whitman isn't alone. Several attendees at the Dell World conference talked fairly openly about the "fights" that are set to take place between factions of Dell and EMC.

"It's going to be really interesting to see the clash of cultures here," said one delegate, a Dell 'partner' who runs an IT channel company operating in New England. "There'll be plenty of fights and turf wars."

Dell, though, brushes off all of this talk. Sure, there may be a few scraps along the way. But such is life, right? And it's about the long view, anyway.

"Scale is important," he told the meeting of journalists and analysts. "When you look at this industry, the companies that have succeeded in the volume data centre space have been attached to large PC client businesses and the volumes really matter."

So there. And if you don't agree, that's totally cool, he might have added. Because I don't care if you don't care.

Dell's ownership of his company allows him to look past interest payment debates and short-term internal corporate rivalries. It allows him to go back to first principles. And this is what he sees: the world's data requirements are booming without an apparent ceiling. People's mobile phone data requirements, alone, are doubling every year. (In Ireland, the average person now uses over 2GB per month just on their phone and at least four times that on wifi at home.) 4G networks are rolling out all over the place. 4K video is slowly beginning to enter the landscape. HD video is now becoming the norm, even on basic phone transfers. All of this data has to go somewhere. It has to be stored and managed. And the world is still at an emerging stage in data management, not a mature one.

What Dell is doing is betting big on data. "Scale matters," he said. "At this moment that there is an explosion of devices with all of these embedded devices and internet of things devices. And this deal gives us access to the largest companies, including reaching into some emerging markets around the world."

But if you have a different opinion about all this, good for you. Go write a blog post about it or join a pundit panel on Bloomberg TV.

It must be nice to be Michael Dell.

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