Their discussion covers:
- Why Dell is well-positioned on their company ecosystem strategy
- What the second half of 2023 holds for Dell, from a strategy perspective
- Mindy shares what Dell’s biggest opportunities for growth are over the next 2-3 years
- We explore whether cloud repatriation is just hype or real movement
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Patrick Moorhead: Hi, this is Pat Moorhead, and The Six Five is On the Road in Las Vegas for Dell Technologies World 2023. It’s been an incredible event, you know me, I love big tent events. A lot of music, a lot of people. I mean, Dan, we have heard about multi-cloud, a lot of conversations about AI, talking about the edge and the future of work. But you know, none of this comes to bear without a lot of strategic planning, looking into the future. And we rarely have the ability to talk hardcore strategy on The Six Five.
Daniel Newman: You, at some point in your past life, ran corporate strategy somewhere, didn’t you?
Patrick Moorhead: I did, I did, one of many-
Daniel Newman: When you had a job.
Patrick Moorhead: One of many things, when I had a real job. That was my last real job.
Daniel Newman: Now you do this.
Patrick Moorhead: I ran corporate strategy. Now I do this.
Daniel Newman: Okay, well-
Patrick Moorhead: Which by the way-
Daniel Newman: So we should bring someone on to talk about it with us.
Patrick Moorhead: No, we should. And that’s a great way to introduce… Yeah.
Daniel Newman: Oh, no, no, no, no, no, no. Please, no. What I was just going to say is that corporate strategy in this era, in this moment with what’s going on with AI, is going to become maybe the demarcation between winners and losers in every industry. That puts a little pressure on our guest. And why don’t we now introduce her?
Patrick Moorhead: Mindy, great to have you on the show.
Mindy Cancila: Thanks for having me.
Patrick Moorhead: Yes, and-
Mindy Cancila: Happy to be here.
Daniel Newman: Are you feeling any pressure?
Mindy Cancila: None. Let’s do this.
Daniel Newman: Well, I’ll lay a softball up. I’m going to lay a softball, but then you need to ask the hard questions.
Patrick Moorhead: Go, go.
Daniel Newman: All right?
Patrick Moorhead: Okay.
Daniel Newman: Standout moments. We’ve been here now, it’s day three, two big keynotes, dozens of sessions. By the way, I was upstairs, lines down the hallway to get into the breakout rooms. Everyone’s interested in what you’re doing, the most innovation in, ever, according to Jeff.
Mindy Cancila: Yep.
Daniel Newman: What was the big standout moment for you?
Mindy Cancila: Well, I don’t think it’s often that you get to see somebody drive a truck through, like that, through Vegas, right? And to see Herb Kelsey, if you know Herb, in his world of poker t-shirt and his sunglasses. I think that was a pretty standout moment. You know, if you think about what’s happening in the industry, things continue to become decentralized, that attack zone continues to increase. Organizations continue to focus on security, and I would say the things that we’re doing today aren’t going to get us where we need to be. And so to see something that real, come onto the stage, see it on the expo floor, if you haven’t been through there, I mean, wow, the crowds around it.
Daniel Newman: Right.
Mindy Cancila: That was a pretty standout moment for me. The second one, I would say, is just the reality of watching all of these things come to life. You said, well, corporate strategy, we’re on the front end of these things. Not everything makes it through the machine and they don’t all need to.
Daniel Newman: And they shouldn’t.
Mindy Cancila: These things we’re focusing on are, and you really got to see that on stage this week.
Patrick Moorhead: Yeah. So I said in a previous interview, we talked about how Dell knows its swim lanes, knows where it plays, where it invests, and where it partners. And for decades, Dell has had a very strong ecosystem play. It never got confused. Well, maybe there are a couple acquisitions it may have, but it’s very much on target now. You put together the ecosystem strategy, and I’m curious, how do you rate and rank Dell in regards to the ecosystem?
Mindy Cancila: How do I rank Dell? Well, I think this is kind of core to Dell’s DNA. There are some partners that have been integral to Dell’s strategy for decades, and it’s not just those specific partners, but the way that we approach partnerships. And when I think about the things that we’re doing today, the transitions that are happening in the market are not going to be solved by a single vendor. And bringing the right vendors together and integrating to really solve customer outcomes is really where we’re focused. And I view that as sort of a tiering, a logical tiering of partnerships. You think about AI, when we talk about the NVIDIA partnerships, you go up stack into the multi-cloud, those Apex cloud solutions, that’s where you see Microsoft and IBM Red Hat. These are people that we’ve partnered with in the past, but we’re partnering in different ways. You move up stack into edge, now we’re looking at a whole new cast of partners that we’ll likely partner with to bring those solutions to market. So I think those ecosystems, it’s an evolving landscape.
Daniel Newman: Right. So Patrick and I, as sort of hybrid analyst media pundits, cover probably the widest swath of tech of anyone I know. We go chips to SaaS. So I’m going to hit you on strategy broadly here, okay? We’ve been listening to CEOs on earnings calls, we talk to them regularly. This isn’t a financial question, don’t worry. But there is a lot of indication that the second half of people are saying, oh, it’s going to get better, or the chip gluts are going to expire. We’re going to start to see inventories build, but they’re going to start to come down, we’re going to sell more stuff. Software providers are saying maybe the worst is over. And then there’s another side of the world that’s still saying, we have a recession coming. The inflation is still persistent, it’s not going away. So what I’m seeing is there’s a lot of conflicting macro data, Mindy. For Dell, what is the next half? What does strategy look like in the next half with all these factors weighing into your decision making?
Mindy Cancila: Yeah. Second half for Dell is all about delivering on the things that you saw today and over the course of this week. Not a financial analyst, right? Not here to talk about financial numbers and I realize that’s not really at the core of what you asked, it’s more about where are we focusing. And our strategy’s unchanged. Our strategy is anchored on, we talk about these two prongs. One prong is really growing and modernizing our core businesses. Think about PCs, client peripherals, compute, storage, network, that core market where we play and have continued to be strong, continuing to gain share in those markets. The other prong of that strategy or what we talk about is our future growth vectors. And for me, that’s multi-cloud, it’s edge, it’s data management, it’s AI, it’s security. It’s all the things that you saw come to life this week.
However, I think I would be remiss to not highlight what everybody has talked about this week, which is AI. There’s a lot of momentum around how organizations think about what they’re going to do with AI. That’s true for Dell, both for enabling our customers to be able to harness the technologies, but also for us to apply those technologies internally. We talked about some of the things we’re doing in that space already as well, but that’s really to me where our core focus is, delivering on the strategy we’ve already laid out.
Patrick Moorhead: So longer term, and I mean, a corporate strategy group, you’re charting out the future for the company. You’re getting agreement on where investments are made, budgets and all that fun stuff. Sometimes it’s the most popular, sometimes it’s the least popular job. But when you look into your crystal ball into the next two to three years, what are some of the bigger areas of growth for Dell? And that can mean areas where you’re uniquely solving problems for your customers and getting paid fairly for that.
Mindy Cancila: Yeah. I think it, again, I’ll go back to our core strategy pillars, those growth vectors, you heard us talk about ground to cloud and cloud to ground. What that really means for us is a couple of things, it means taking our storage IP and really delivering on that common storage layer. And you’re going to continue to see announcements for that capability to run on top of public cloud, the hyperscalers environments. You’re also going to continue to see partnerships like the ones we mentioned with Microsoft, with IBM Red Hat to bring the cloud to ground because we see that organizations truly are multi-cloud. And when we talk about being the center of that, that’s what we mean, is enabling a common storage layer across those environments regardless of where your data resides. And then, oh, hey, by the way, there’s a whole lot of growth to be had at the edge. And I believe there’s a very synergistic play for AI workloads, data management at the edge. And so that’s really where those growth vectors come together.
Patrick Moorhead: Makes sense, and I have really appreciated that. And this was relatively new for Dell in the past two to three years, its strategy on one piece of paper, and then the upper right-hand corner were the growth vectors. As somebody who not only has to advise companies, but also educate people about that, I just want to say as a side note, it really helped me understand what Dell’s been doing.
Mindy Cancila: I mean, I’m clearly biased from a strategy role, but I will say, I think our strategy is really correctly aligned to the key transitions in the market. I think our investments follow those key growth areas and you’re seeing us deliver on those. And so I think it’s a really great place to be.
Daniel Newman: I think you have proof points, though. $102 billion in revenue is a pretty good proof point that what you’re doing is working, but also having the market share gains and market share leadership in a number of key categories. I think the Pandell story continues to be a challenge, meaning that you do so much across the portfolio that there’s probably more net revenue expansion and dollar expansion opportunities than you can ever fully wrap your arms around. But the team has a pretty remarkable reputation for the selling and the sellers in the org. So building on that is really important.
Now, I guess let’s kind of lightning round it at the end. One topic that’s come up quite a few times in some of the breakouts, some of the analyst sessions has been repatriation. Now, you’re very multi-cloud centric, and so you’re kind of saying, we can support you wherever your workload is. But having said that, Dell does very well when workloads stay on-prem, there’s lots of dollars for Dell on-prem. Is repatriation a thing? Is it real? Do you believe in it? Give us your take.
Mindy Cancila: All right, so a couple things. First of all, I don’t like the word, I never have. As a past cloud analyst, it’s not a word that to me… I stood on stage a number of years back and said, when people say repatriation-
Daniel Newman: She’s one of us. There we go, I know.
Mindy Cancila: I said, “When people say repatriation, they’re trying to sell you infrastructure.” And that’s actually, I mean, we’re happy to sell you infrastructure, but we’re more focused on helping you really move beyond what repatriation meant into a world where you’re truly putting the right workloads in the right places. And oh, by the way, we sell infrastructure into all of those other environments as well. And so a lot of people I think underestimate when we say we truly do want to help organizations put the right workloads in the right placement. If we’re running our storage IP on top of the hyperscalers and they continue to grow, we’re growing with them. When those applications move to software as a service, we sell infrastructure to those SaaS vendors. We’re continuing to grow into those markets as well.
But again, what I think this really comes back to is the customer base. And what I find is organizations have done a great job very quickly moving into the public cloud. And what we talk about is they did cloud by default, not by design. And at the core of that, it’s all about putting the right workloads in the right places. And when we see organizations focusing or talking about repatriation, it’s actually a different conversation. Repatriation was, I’m going to move things into the cloud and move them out. What I see happening is, I now I better understand where those workloads really should reside and why. And as a result, I’m going to architect my things more correctly, accurately to leverage the capabilities in those locations. So I think it’s time for a new word.
Patrick Moorhead: Yeah, I do think what we’re seeing-
Daniel Newman: That might work.
Mindy Cancila: Yeah, I understand. Right?
Patrick Moorhead: I think it’s some other company we might have heard of.
Daniel Newman: Anyways, yeah.
Patrick Moorhead: Anyways. The cloud is an adolescent, okay? Well, it’s not an adolescent, it’s 19 years old. The first cloud service was spun up in 2004, it was a queuing service. And we’re at the point right now where the multi-cloud is a few years old. So it’s clear to me that every Fortune 500 company has multiple IaaS providers, and they know that they’re going to have more now. No longer am I hearing cloud only or cloud first. So I’m enthused by this maturation of looking at it. And one of the things that I did like a lot of the segments that even Jen Felch, your CIO, talked about was finding the right place for the right workload and the variables that go into it to determine. That’s maturity.
And by the way, we’ve seen this before when it was, what should we put on the mainframe? What should we put on the mini computer? And then what should we put on the x86 server? We’ve been here before. So I just see this as another phase. And like any 19 year old, thinks they know more than they do. They’re still making mistakes, and they have a lot of years to go. And I’m enthused to see Dell lean into and say out loud, “Multi-cloud”. I mean, it’s a big deal. And I’ll admit, for a few years, I was wondering why there wasn’t more conversation about that, but I’m glad to see that the company was working on solutions and is now talking about solutions, and can’t wait to see what the future holds.
Mindy Cancila: That’s great. And I’m excited to see as we build upon this and move into more cloud by design. I think AI is on the heels of that for the next, as they might be the adolescent in that conversation.
Patrick Moorhead: Listen, same law of physics when you have public cloud trying to do on-prem. It’s a totally different game.
Mindy Cancila: Yeah.
Daniel Newman: Well, we’re very excited, Mindy, to continue to keep up with the strategy, ask you the hard questions. But our job is to assess, it’s to provide our opinion to the market. And I think largely what we’ve come to this week, and I’ll speak for me and you can speak for you, is that Dell’s doing a lot of things really well. And that’s visible in the numbers, it’s visible in the customer type of testimonials, the partners that continue to invest in working together. So we’re eager to watch how this multi-cloud thing develops, and of course, how AI transforms the entire Dell business and our industry. So thanks for joining us here on The Six Five.
Mindy Cancila: Thanks for having me.
Daniel Newman: All right, everyone, thank you so much for tuning in with us here, Six Five on the road at Dell Technologies World 2023. We hope you’ve watched all of our shows and then watch all of The Six Five episodes every single week.
Patrick Moorhead: There we go.
Daniel Newman: But for now, for this episode, for Patrick and myself, we’ve got to say goodbye. We’ll see you all really soon.