Dell Technologies World 2018 – Meet the Chairman – Rough Notes

Disclaimer: I recently attended Dell Technologies World 2018.  My flights, accommodation and conference pass were paid for by Dell Technologies via the Press, Analysts and Influencers program. There is no requirement for me to blog about any of the content presented and I am not compensated in any way for my time at the event.  Some materials presented were discussed under NDA and don’t form part of my blog posts, but could influence future discussions.

Here are my rough notes from the Meet the Chairman session, a 45 minute Q&A session for Press, Analysts and Influencers with Michael Dell.

Stella Lowe takes the stage to introduce MD, who talks briefly about the power of technology as a driver for human potential. He notes there’s a real technology-lead investment cycle happening in the world today.

Q: You said AI is a rocket ship fuelled by data. How many people are really leveraging AI? People are losing jobs, how can people keep pace with AI?

MD: Seeing explosion in AI (neural networks, deep learning, machine learning). Using learning and inference to draw better conclusions from the data. Rapid acceleration in their server business. +30 – 40% last quarter. Why? AI is a big use case. AI gets very vertical very quickly. Specific to the data. Build out of automated, modernised, on-premises systems. HCI, converged, VMware’s doing very well. There’re lots of great libraries and tools out there. Interesting to see the boom in edge computing. People are working out the cloud might be costly, and it’s valuable data. Want to own their own data. There will always be variable outcomes when new technologies come along. It’s the nature of most industries.

Q: Brazilian business have maturity for future. How can Dell Technologies help them on this journey?

MD: When we look at our top 10, 15, 25 countries – they’re all growing. Each economy runs at a variable speed, but we’re seeing it in Brazil as well. Looking to bring all of our capabilities to all of the countries.

Q: Networking. With the traditional portfolio, what are your plans with Force10 and PowerConnect? Doesn’t seem to fit well with disaggregation.

MD: Networking is growing rapidly. We invented the idea of open networking which goes well with SDN. You’ll hear more about this from Pat Gelsinger in his session. By measure of ports? We’re huge in networking. The business has been a forward thinking company in terms of where we think we’re going.

Q: The Middle East is a big data centre market. What can you do to help in the DC business?

MD: We’re helping to build out the infrastructure. We don’t believe that everything goes to just 2 or 3 clouds. Telcos and companies all over the world are building their own clouds. And the edge is going boom too. This is perfect for countries like Egypt.

Q: You compared AI with a rocket ship. Elon Musk compared it to an atomic bomb. Do you think it should be regulated? And why?

MD: Regulation happens because people are afraid. Is that possible with AI? It’s up to us to stop the bad stuff. It’s usually about the lowest common denominator. How do we ensure this is being used for good? Powerful tools, but that’s all they are. Remember fire? When it first came out, it was probably a bit scary too. Someone figured out how to do bad things with it. Every tech creates good and bad. The wheel. Created jobs, destroyed jobs. We have to figure out how to use it in a responsible way. We have to think responsibly about how we use technology. It’s our job to prevent that. Regultaion’s important and works really well, sometimes it doesn’t it. If you try to hold something back that’s fundamentally good and powerful, that’s not going to work. If you check out sci-fi ten or twenty years ago – they were very pessimistic. That hasn’t really been the case though. “There’s always one or two percent of people who are really bad, we’ve got to figure out how to stop them”.

Q: How do you think 5G will impact the market? And the relationship with telecommunications?

MD: There’re so many new things that are coming, it’s hard to know what to be excited about. 5G is a bit like in the mid-90s when they got the web kicked off. If you take a level 4 autonomous car (in 2020) it’s going to generate 4TB of new data every single day. 5G may not be enough. Assuming 1% of cars become that by 2020, we don’t have enough NAND to deal with this. So there’s going to have to be local intelligence in the car. There are some challenges with 5G. In some countries there are so many carriers, some don’t have enough money to implement it. You’re going to need new tech and resources. We’re excited about 5G. It’s not a slam dunk in terms of all the carriers implementing it. But it’s going to be cool. It’s not about you being able to talk on the phone faster – it’s about the data. There’s a big move by telcos to adopt standard x86 and network function virtualisation.

Q: When it comes to a country like India, when do you think 5G will become a reality?

MD: It’s up to the carriers, and the governments. I was in Germany recently, and only had 3G coverage. There are so many carriers, that none of them can afford to implement the newer stuff. 5G’s going to be a big enabler. Governments are going to figure this out. What India’s doing now with IndiaStack (http://indiastack.org) is very inspiring.

Q: You talked about possibility about getting back to the stock exchange? And how do you attach tomorrow’s announcements to your vision of the future?

MD: Tomorrow we’re going to talk about some stuff that ties things together in a unifying sense. It’s true we did make a 13D filing. Did you read it? It contains certain information about what we’re considering and not considering as a company. Sometimes we just have to do that. If I tell you something that’s not in the filing, we’ll need to make another filing.

Q: What’s your strategy to pay down Dell’s debt, and the deliberation about strategy.

MD: We’ve paid down $10B in debt on the schedule that we outlined to the banks. We’re trading well. We have strong cashflows and we’ll continue to pay down debt on a predictable schedule.

Q: What do you see Dell EMC’s value proposition in terms of transformation in AI? What have you invested in AI internally in terms of processing.

MD: We see ourselves as the digital transformation company. Pivotal is the operating system for this. Building cloud-agnostic apps. You want to use AI, you start with algorithms  for learning and inference from your data. The more data you have, the more useful things get. Companies of all types are figuring out what to do. You need to build data lakes, and aggregate the data. Helping customers to build that infrastructure. Growth we’re seeing in infrastructure is “excellent” and is being driven by these new types of applications.

Q: Advanced catalogue of infrastructure in the market? Are you worried about customers feeling locked in to one vendor?

MD: We’re number one in 22 categories, but we have 2.6% marketshare. We’re an $80B business, and the market is $3trillion. There’s no shortage of competitors. Co-op-etition going on. We have an opinion about how to run a modern DC and how to build cloud-native apps and how to do security. You can do it yourself if you want though.

Q: Now that Dell is pushing towards AI, are you going to join the like of Apple, Microsoft, etc? And what makes you feel you’re more equipped?

MD: There are lots of companies in the market. If we were talking about this in the mid-90s, the question would be about the Internet – what are you doing about the Internet? The cloud, AI – same thing. When we’re here in 20 years … These are all enabling technologies. We’re building solutions. Dell Technologies Capital are helping a lot of data companies. There’s going to be stuff in public cloud, on-premises, edge. In the company we have 100s of projects leveraging AI and ML. Some of them are impacting products, some of them are working behind the scenes to improve our productivity. AI is a big enabler. Every modern corporation has to go figure this out in their own way. It won’t necessarily be an off the shelf solution. A lot of the customers you saw on stage – think about what they’re doing with their data.

Q: AI is very vertical. When would would you expect these kinds of horizontal solutions will break through? Are you thinking about those products?

MD: you’re talking about systems of systems approach. A lot of what we do with Pivotal is doing some of that. Boomi connecting apps and data across multiple streams. People are buying servers with GPUs. When you get into a specific business, the way the data is used is incredibly vertical. There isn’t one tool. It’s artificial specific intelligence, not artificial general intelligence. I’m not optimistic that there’ll be Artificial general intelligence any time soon.

Q: You’re a year and a half in to this. Anything you want to do over?

MD: Overall I’m quite pleased. Nothing really broke. There’s stuff we would have liked to do better. Sales integration was important. Priority was not churning customer relationships. There’s some opportunity to improve. We’re continuing to tweak that, getting stronger each quarter. No massive revelations. Didn’t meet our plan for revenue, we went several billion over, so I’m pretty pleased with that.

That’s a wrap. 3.5 stars.