The Six Five – On The Road with Doug Schmitt at Dell Tech World

By Patrick Moorhead - May 31, 2023

On this episode of The Six Five – On The Road, hosts Daniel Newman and Patrick Moorhead welcome Doug Schmitt, President, Dell Technologies Services.

Their discussion covers:

  • Doug gives us a quick overview of Dell Technologies Services and shares some recent changes in the organization
  • We discuss what Dell is hearing from its customers on the global macroeconomic environment
  • Doug shares how Dell Technologies Services is responding to the changing priorities of its customers
  • How Dell is ensuring customers are getting maximum value from Services and what the organization is doing to meet future customer needs

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You can listen to the conversation here:

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Patrick Moorhead: Hi, this is Pat Moorhead and The Six Five is on the road at Dell Technologies World 2023 here in Las Vegas. As you can hear, there’s a lot of excitement going on, and Dan and I are doing the analyst and the Six Five thing right now. Having a ton of fun getting educated, doing a few victory laps as well.

Daniel Newman: Hey, listen, in the era that we’re in now, the connected AI generative era, Pat, you’re not one thing. We’re not just analysts-

Patrick Moorhead: There we go.

Daniel Newman: … we’re personalities. We’re analysts, we’re Pat bots. By the way, the Pat bot, is it coming anytime soon?

Patrick Moorhead: I don’t know. We’re going to have to see that. But as we heard here at Dell Technologies World, it’ll definitely be a combination of public and private data in our research.

Daniel Newman: The Jeff Clark bot was fun.

Patrick Moorhead: That was good.

Daniel Newman: And I liked the Gen bot when he was bringing Gen up.

Patrick Moorhead: Exactly.

Daniel Newman: The Gen AI, it was great.

Patrick Moorhead: So I am pleased to introduce again a veteran of The Six Five, Doug Schmitt. How are you doing?

Doug Schmitt: Well, I’m doing well. Pat, Dan, it’s good to see you at DTW, here in Las Vegas. I think the last one of these, we were just talking, Dan and I, about a year ago, I think, in Austin, last one we got.

Patrick Moorhead: That’s exactly right.

Daniel Newman: It’s great that we have to come this far-

Patrick Moorhead: I know.

Daniel Newman: … to sit down with Doug, since we’re all in Austin.

Patrick Moorhead: No, listen, I mean, Doug, you’re on the front lines, and you’re probably the most customer connected group inside of Dell. I mean, you’re doing services and services are hot. I think we’re in the mutual agreement society on that one. We predicted, and I don’t want to take your year, but it’s very much becoming a services led conversation with customers, so great to see you.

Doug Schmitt: Yeah, well thanks for having me back on Six Five.

Daniel Newman: Yeah, it’s great to have you here. Let’s kick off there, kind of an update, but not everybody saw you on a year ago. So you’re back, give us just a quick overview, a quick taste of the work you’re doing with Dell Technology service.

Doug Schmitt: Well, I think if you stand back for a sec, as we talked about a year ago, the size of the team, the scale of it is 60,000 team members in over 170 countries, and we do service in 50 languages. And Pat, as you said, this is about helping our customers implement, drive and get the outcomes they want for their technology solutions. So our services, end-to-end, include everything from consulting, the deployment of the technology, the support of the technology, the managed side of the technology, the security of the technology, and then as you would expect, the asset recovery, which we’re very proud of as well, so we can recycle all that back in. So end-to-end services, and look, you’ll hear me say it a lot, but it’s about being the trusted advisor, we’ve talked about that.

Patrick Moorhead: Right.

Doug Schmitt: Helping our customers through their journey.

Patrick Moorhead: Doug, you and I have talked many times about many things, and you and I talked, I think, a few months ago about a reorganization inside the services group. I understand what’s happening, what isn’t happening, but can you share with the viewers what actually happened and what is happening? What changes, what doesn’t?

Doug Schmitt: Yeah. Well first of all, that end-to-end services doesn’t change, and the delivery of it doesn’t change, so that’s first and foremost. But you’re right, inside the end-to-end support that I talked about, which most people would think of as the break fix, the traditional services, right, that we’ve all probably grown up with. If you look at where we’ve been, and you and I have talked about this with Dan, over the last five to eight years, it’s been really driving out the calls and the dispatches. The reason is, we know our customers have a higher EMPS, they’re talking about their MPS scores, when they don’t have an issue. So that’s been the catalyst for driving those activities out, so our customers never have an issue. We’ve made tremendous progress on that.

When you look to the next four to five years of how to continue that so that our customers don’t have issues and it’s seamless, we have to get closer to the product. We have great telemetry from that proactive predictive support we have. How do you get that built into the products quicker? How do you get issues resolved with that telemetry quicker? It makes sense to get it closer to the product and so that’s where we moved it to.

Patrick Moorhead: Makes a lot of sense.

Doug Schmitt: Yes, and we have high benchmarks for where we want to go with that as well.

Patrick Moorhead: Right.

Daniel Newman: Yeah, absolutely. And I see so much change coming, and I think we’ll hit on that a little bit with you later, Doug, but first of all, 60,000 team members.

Patrick Moorhead: I know. No, every time he says that I-

Daniel Newman: 50 languages. I can’t-

Patrick Moorhead: Yeah, it’s scale, it’s scale. And that’s Dell Technologies.

Doug Schmitt: That’s Dell.

Daniel Newman: A lot of people, Doug, and someday I’ll have to pick your brain on how you keep them all smiling.

Doug Schmitt: Good team.

Daniel Newman: One thing about keeping them all smiling too is the customer. This year we have our Six Five summit coming up, and our summit’s all about what we call navigating rough waters. I think after a big boom for a few years induced by whether you could say it was the pandemic, or what caused it, we were all predicting somewhat of a slowdown in 2023. And while you could debate whether tech will slow down, because it could be deflationary, it could be… You’re out talking, what’s the sentiment, here in the US, on a global basis, how do your customers feel about all that’s going on in the macro environment?

Doug Schmitt: Well, that’s a great question, and I think you’re hearing it as well as I am from customers here at DTW, that is the case. I would say there’s some themes though, and we’ve talked about these themes. I always like breaking them down into themes, they’re a little easier to digest.

Patrick Moorhead: We like simple.

Daniel Newman: Listicles.

Doug Schmitt: Simple works.

Daniel Newman: Top five things my customers are saying.

Doug Schmitt: Now, wait, just so we’re clear, I didn’t call you guys simple. I said I like the theory is simple.

Daniel Newman: We’re still friends.

Doug Schmitt: But no, all joking aside, part of that, and actually in talking to you and others, we actually kicked off a Forester survey about nine months ago, where we asked that and where the trends were at. There were some interesting things, one of the key ones, before you get into what we were seeing for some of the trends, was back to what you were saying at the very beginning, about 71% of those customers said they are looking for assistance, professional service assistance, to help them with their journey. That was clear, so it just echoes what you were saying, Pat.

But those five themes really start… You aren’t going to be surprised security comes up as one of the top themes. Yes, things are moving faster, but there’s internal pressure, external pressure to make sure all of this is secure. One of the good things we have inside the services is helping the cyber vault solutions. We have, obviously, all of our issues in helping with incident management. And we just launched MDR 2.0, which is the managed detection and response for end-to-end, where we can help our customers manage that.

The second one that you’ve talked about is multi-cloud. You’ve been talking about that for a while, Pat, and-

Patrick Moorhead: I have, and I let everybody know that I have.

Doug Schmitt: Yes. Main stage, you heard Michael and Chuck talk about it yesterday, and you heard Jeff just echo that today. So multi-cloud is helping our customers, and this is an important piece by design, building multi-cloud, so that’s a key one.

Third one is the edge. It’s funny, I get a lot of customers asking me even sometimes, and this is okay, is why it’s here, we’re all learning from each other. What is the edge? And I always go back to look, just take the store. We heard the whole story today from Gil, on buying ice cream in a store, the shelf detects when it’s removed, it’s placed, the order goes to the manufacturer all the way down to production. That is the edge. And we’re helping our customers deploy that as well as design it, so that’s a key one.

Hybrid work, the fourth one. COVID definitely sped that trend up, and what we’re seeing is that customers are looking to help manage that end-to-end life cycle for the client products. We launched our APEX PC-as-a-Service, another item that we’ve talked about numerous times. So we’re looking forward to that and helping our customers with that.

And then tying that all up on the fifth one is this trusted advisor, helping our customers through all of their technology journeys, as well as getting the outcome, and that’s going to be the key.

Those would be the five things that we’re hearing here. I would also say that I don’t think those trends, similar to how hybrid work was escalated, in terms of how fast we went to that trend with Covid, I think these economic headwinds are actually accelerating the trends we saw a year to two years ago coming out.

Patrick Moorhead: Yeah, I’m curious, is there any special way that Dell Services is responding particularly to the recent turbulence, having to create either new and different products, or maybe approach a product differently based on some of the recent turbulence? Or, I mean, which I think is pure Dell fashion, it’s full steam ahead, you had predicted some of these things and you’re responding to it with what you outlined previously.

Doug Schmitt: Well, let me see if I can get… The trends I don’t think were missed, by any means. I think you’re hearing that-

Patrick Moorhead: I’m speaking more of the financial turbulence here. Has that changed the scene at all for you in, let’s just say, for lack of an exact date, the past 12 months? Where we have debate on whether we have inflation, but we have interest rates going up and to the right. And there has been an overall global economic slowdown, started with consumers and then it moved into the commercial markets. How have you had to respond to those in the services group? Or maybe you haven’t had to.

Doug Schmitt: Well no, everybody adjusts, but ours, on the service side, is more adjusting to what the customers need now more than ever before that. Specifically, in other words, flexibility, for example, the customers are looking for more flexible solutions. And what I mean by that is, look, how they want to pay for services and the solutions, whether it’s CapEx, per drink. So yes, we are getting more flexible, we are having to build solutions that cater more to that.

I would also say customers are becoming very focused on outcome, meaning here’s the solution, but you have to help us not only deploy this technology, we need you to carry it with us through the outcome. So yes, services is becoming, in our solutions, our professional service, much more fine-tuned on making sure that we can show the results, show the outcome, and help our customers actually implement that to the end solution.

Patrick Moorhead: Right.

Daniel Newman: You set me up really nice, I love when people do that. But in this period of greater austerity, enterprises are still spending, but they want the outcome. They want to measure things, they want to understand the return. They’re saying, “Yes, we’ll spend if we know a dollar in is going to yield one plus out.” And so service is one of those areas, like IT has historically been, where it’s gone from a pivot of being cost center to now profit center for many organizations. Service is keeping things running, moving, very important. How do you, with these requests coming in, make sure your customers can define those outcomes and know they’re getting the maximum value from the investments they’re putting into your business?

Doug Schmitt: Yeah, I think that starts, as I said, with that trusted advisor. And I’ll go back, it ties in with what Pat’s talked about as well I think on this, is first of all, in times of these economic headwinds, at least throughout my career in IT and services, customers tend to lean more into the services that we can provide. They’re running leaner, they have these outcomes, as you’re talking about Dan, that we have to deliver, so they actually lean more into the services side to make sure they’re getting the bang for their buck, as you’re talking about.

How do we do that with that? The first is, as always, and you would say no kidding on this one, but clearly define the outcome before you design and build the technology or the solution. Getting nailed down on that actually takes a little longer when you’re sitting with the customer, because you’re actually not just talking about technology, you’re saying, “Okay, what are we looking for on that exact outcome? What is the dashboard and the scorecard you’re looking at?” And then working back through that solution and making sure that we have designed, architected, and then deployed it in the way that you want, to then go back and measure, right, to that dashboard that you wanted, that you’d know you had success. That’s easier said than done, as you well know.

Patrick Moorhead: It is. And having spent a few years executing things in prior career, this is very tough. One of the hardest things is not only delivering what customers want today, but also taking time and resources and budget to plan for the future. I’m not asking about specific product lines or things you’re about to announce, but how are you thinking and preparing for the future? Any trends that you’re seeing that you need to make sure that you’re prepared for to best help your customers?

Doug Schmitt: Yeah. Well, the first one, yes, is clearly on multi cloud APEX, the service and the solutions to deliver that for our customers as they want and desire or need. So we would call this, we have inside the services team, an emerging services. It doesn’t cover everything. It covers those trends we’re talking about, right? So clearly, APEX and multi-cloud, making sure that we continue to design that so that we’re able to get the feedback back into David Singer and Jeff Boudreau on the overall product side, and that we’re also making sure our customers are getting their outcomes and expanding where they need to expand. That would be the first one.

Second one would be around telecom. I think it’s a huge market, 5G telecom, I’m blending those together a little bit-

Patrick Moorhead: Lot of transformation going on.

Doug Schmitt: Yeah, and helping our customers design inside of there. The edge is going to have a big piece to play in all of this when you hook it all together, as I’ve heard you talk about in your Six Fives before with others, so that’s clearly one of them.

And then this modernization of our overall portfolio and keeping that up. Now, when I talk about modernization, I’m talking about digitizing that so we’re using the telemetry to help our customers with intelligence as a service. Because they’re not just saying, “Deliver the outcome”, now, they then, after you deliver the outcome, are even coming back and saying, “Now you have a great deal of information about the environment, how do we improve our internal processes?” So, I think, exciting stuff, I really do.

Daniel Newman: Absolutely. We’re about to wrap up, but we have a minute or so of time and I have one more question for you. You haven’t said AI. I don’t think you said AI.

Patrick Moorhead: It’s okay. I’m actually glad he didn’t because that’s all we hear.

Doug Schmitt: Oh, should I?

Daniel Newman: I don’t think we’re allowed to do a video in the year 2023 and not talk about AI. Now, I’m not necessarily expecting you to spill the beans or anything, but any just more macro thoughts on how AI might influence the business you’re leading?

Doug Schmitt: Yeah, look, generative AI is, clearly, helping our customers with that. You heard about Project Helix today, very exciting about that, with Nvidia. So clearly it is at the forefront of what people and our customers are asking us for. But this generative AI really offers a great deal of opportunity, and in services, we’ve been using it for a while. We have 3,500 of our processes digitized, we’re using Celonis and Aris on top of this. Now, with generative AI, you can go in and use the natural language on top of that unstructured data, get valuable information. So look, I think it’s going to be great. I also believe it’s going to help us provide better service to our customers. We’re going to have to spend more time in front of our customers, which is what we as service people love to do, not doing the back end. So I think this is going to be great.

Then the second piece of that is tapping that into the intelligence as a service. The power both of those together are going to bring, about giving those outcomes to our customers, man, it’s going to be something. I’m looking forward to it.

Daniel Newman: Well, thank you for appeasing me.

Patrick Moorhead: And probably the audience.

Daniel Newman: I had to ask. I mean, look, everybody out there… Pat.

Patrick Moorhead: I mean, it’s funny, we actually wrote a paper years ago on predictive and proactive support that used machine learning algorithms on the client. Maybe it was seven or eight years ago, six or seven years ago.

Doug Schmitt: That’s right.

Daniel Newman: Trend-spotter.

Patrick Moorhead: No, exactly. And I think we got all excited as analysts about the new shiny thing, and that new shiny thing right now is generative AI. What’s really cool is the theory of how it could radically change the service environment.

Doug Schmitt: Oh, yes.

Patrick Moorhead: So I think you’re going to be very busy. What I’m hoping is that we can do an update soon, maybe six months, maybe it’ll be at next year’s Dell Tech World, to talk a little bit more about the value add that you’re using with generative AI to bring outcomes to your customers.

Doug Schmitt: I would really like to do that. As you know, I have a deep passion for all of that. Love to talk about what we’re doing internally to learn as well, we’ve made a lot of progress. And again, you’re exactly right, we’re going to be able to provide better service, spending more time in front of our customers, with generative AI.

Patrick Moorhead: Yeah, for sure.

Daniel Newman: And possibly, Pat, it’ll be the three of us, if we can’t get our schedules, meeting in the metaverse, doing it with our avatars.

Doug Schmitt: That’s right.

Daniel Newman: Using generative AI. Then we can transcribe, create the super cuts and share them with the world.

Patrick Moorhead: I don’t know, I like spending time with Doug.

Doug Schmitt: There you go.

Daniel Newman: I do too, I do too. Schedule permitting, Doug, we’d love to see you again soon. Thanks so much for joining us.

Doug Schmitt: Excellent. Thank you very much for having me.

Daniel Newman: All right, everybody, there you have it. It’s Dell Technology World and we’re The Six Five on the road. Excited to have you tune into all the episodes here from the event. But for Patrick, for myself, it’s time to say goodbye. Thanks for tuning in.

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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.