Monday, December 11, 2017

CRN Exclusive: Michael Dell On Completing The EMC Integration, M&A Strategy, VMware NSX Synergies, And 'Refocusing' On Storage In 2018

@MichaelDell: 'I See Nothing But Great Opportunities Ahead' @DellTechnologies CEO Michael Dell says the complex integration of EMC, the largest IT acquisition in history, is now complete with his sights now set on winning more market share in storage and #softwaredefinednetworking in 2018. "When you compare us to the other large companies in our sector, what you find is we are larger, more profitable and growing faster. It's a good combination," said Dell in an exclusive interview with CRN. He said Dell's overall portfolio with its family of companies, including VMware, Dell EMC, Pivotal and others, is "unparalleled in the industry." In the interview, Dell lays out the company's biggest areas of focus in 2018, new storage investments, increasing VMware synergies, and the call to action for channel partners heading into Dell's second fiscal year as a combined company.

What was your biggest accomplishment over the first fiscal year of Dell EMC?

It's pretty simple. We completed one of the largest and most complex integrations in history and the company is functioning right now as one company. We have one face to the customer and we didn't break anything. A lot of stuff that could have gone wrong, didn't go wrong. We're growing. We're gaining share. Customers and partners are very happy. We're off to the races. I would say it is kind of like the end of the combination and integration, and it's the beginning of the beginning. So we are just starting our new year as a relatively newly formed company with a lot of the integration behind us and great momentum from our customers and partners.

Where did that momentum come from?

Some of that I think is the general economic excitement that's going on around us, and some of it is the portfolio effect where customers and partners see Dell Technologies as more relevant than ever with Pivotal, VMware, Dell EMC coming together. Our strength in the solutions we can provide are really unparalleled in the industry. I think we're gaining share as a result. I know we are.

What are your storage goals for 2018?

We are hiring more storage specialists. There's a ton going on on the product side in terms of innovation. We have the broadest product line in the industry from data protection with Data Domain and Avamar, to the high-end VMAX and XtremIO. We introduced the new XtremIO X2 platform – that's doing very well. We have our midrange products with our SC and Unity, and Isilon and ECS for object storage. One of the big areas in storage is storage inside the server – software-defined storage. There we have VMware vSAN, which I think had eight quarters in a row of plus-150 percent growth – very strong growth once again. Our ScaleIO and ECS is also a software-defined solution. Some part of our server growth is due to the fact that there's tremendous growth in software-defined storage, so integration is on high. We're adding resources in terms of storage specialists, increasingly creating more and more appliances with converged and hyper-converged, and helping our customers realize the hybrid cloud opportunity

We just announced some midrange products and a new storage loyalty program. We sold a lot of server and storage together, we just sold more servers than we did storage. We are refocusing a bit so that we continue to sell a lot of servers, but also sell more storage. The plus-9 percent growth in our server, storage and networking data center business is quite a bit faster than the overall market, and given we're the market leader on an aggregate basis – that's strong performance. We are feeling good about where we are. There's a lot of work going on in terms of new product innovation

Are you looking to drive more synergies between Dell and VMware in 2018?

We laid out a plan with VMware for revenue synergies that was announced to the world and we've been running much faster than that plan. You can see this in the VMware results and in our results. The revenue synergies and the more we do with VMware, the better it gets. It's doing quite well. We definitely see that continuing next year. … VMware is doing extraordinarily well and so far this year, we're a couple billion dollars more than we planned for in revenue.

VSAN grew 177 percent in the quarter and NSX, our software-defined networking with VMware, was up 119 percent year over year. VxRail also grew 177 percent year over year. These are pretty extraordinary growth rates.

The opportunity in terms of virtualizing the network we believe is bigger than virtualizing the server. VMware leads in that. We're seeing broad adoption across the 600,000-plus VMware customers of NSX. It's only starting now with the biggest [customers], but we are making this easier to deploy. We build it into appliances. We continue to have support from the rest of the networking and security ecosystem using NSX as a platform for networking. When you software-define the network, you can both drive tremendous levels of automation and drive high levels of security because the networks can be segmented and can persist for only the required time, so it allows for a much higher level of security than a physical network.

Are you spending more time around the Internet of Things?

This is definitely in the category of digital transformation, which we talk about a lot, and all of our customers are in one form or another engaged in this. It comes from not only the explosion of data, but the fact that it's much easier to make things intelligent now. The number of sensors is exploding, bandwidth is improving and the latency is going down. So you've got all this data on an incredible number of sensors, then you've got the new computer science – artificial intelligence and machine learning – so organizations have to re-imagine themselves to say, 'Wow. Now that I have all this new information, all this data, how do I turn it into a better outcome for my customers?' This is where Pivotal often comes into play. So a lot of companies are using Pivotal as the operating system for their Internet of Things platform or their digital transformation for their cloud-native apps.

What companies are you working with to drive IoT market momentum?

So you think about a company like Bosch in Germany, they're using Pivotal as their platform, or GE or JP Morgan and Chase, or Home Depot, or Comcast, or Verizon, or Boeing or Ford – we have hundreds of them. We actually have half of the Fortune 500 now using Pivotal Cloud Foundry as the basis of their digital transformation.

When you step back and look at the relevance of Dell Technologies across digital transformation and IT transformation, what's going on in our workforce with our continued strength in the client business, [and] security where we have great depth and capability -- we are unique. That's another reason why partners and customers are attracted to us. We have to earn their trust every single day; there are no guarantees and we continue to work hard every day to do a better job for customers and partners.

Will there be any changes to Dell's relationship with Nutanix in 2018?

We are very focused on VxRail. VxRail is bigger for us than other solutions. We'll continue to offer customer choices, but VxRail is our focus for hyper-converged. It grew 177 percent last quarter.

What is Dell's acquisition strategy going forward?

We're in good shape. We continue to make selective acquisitions. VMware recently announced the acquisition of VeloCloud, this is a software-defined WAN building on the strength of NSX, which grew more than 100 percent this past quarter. SD-WAN is a great opportunity. We also bought Wavefront. We added another company to Boomi Workflow, and of course we continue to work with Dell Technologies Capital Ventures investments where we have been making roughly one investment a week into new portfolio companies to help them develop

http://www.crn.com/slide-shows/data-center/300096621/crn-exclusive-michael-dell-on-completing-the-emc-integration-ma-strategy-vmware-nsx-synergies-and-refocusing-on-storage-in-2018.htm

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