in 1946 the acerbic manager of the dodgers leo the lip derosher famously said of baseball great mel ott who was player manager of the giants at the time you know what happens to nice guys they finish in last place the phrase nice guys finished last was born and became popular outside of baseball well joining me today is someone who is a consummate gentleman and a nice guy who proves that in him absolutely isn't true at all he's also written a new book play nice and win michael dell chairman and ceo of dell technologies welcome back to the cube thank you very much dave always great to be with you wonderful to be on the cube and thanks for your great coverage of dell technologies world yeah we're very excited to be covering the virtual version this year next year we're back face to face i'm sure and we're going to talk about your book but i want to start by asking you to comment on the past 12 months how are you going to remember 2020 i'm going to remember it by the resiliency of the world and our team the adaptability uh the acceleration of digital transformation which is pretty amazing around the world the vital role that technology played in addressing some of the biggest challenges whether it was the creation of axes or uh you know decoding the virus itself or just addressing uh all the challenges that the world had um you know i think it's a it's a game changer in terms of disease identification and how we prevent these kind of things going forward um you know there's still a long way to go in terms of how do we get 7.5 billion people vaccinated and safe i also think it exposed uh you know some of the fault lines in our society and that's a that's a great learning uh for all of us in terms of access to health care and education and you know uh the the digital resources that power the the world and so um yeah those are those are some of the things that that really stand out for me well and i think leaders like yourself in position of influence actually passionate about about some of those changes that we see coming in society so hopefully we'll have time to talk about that but i wanted to get into the business i think a lot of people myself included felt that 2020 was going to be a down year for big tech companies like yours and that relied heavily on selling products to data centers and central offices but the remote remote work trend and the laptop boom offset some of those on-prem softnesses and headwinds combined with vmware the financial performance of dell technologies was actually quite amazing why were you able to do so well last year well first of all you're right we did we had record you know pretty much everything record revenues record uh operating income record cash flow and we also paid down you know a record amount of debt and so i think the string and resiliency of our supply chain as well as the broad diversified nature of what we provide our customers continue to service very well as they move to this sort of do anything from anywhere world and you know it continues uh you know in the first part of this year uh you know business is very strong you know a few weeks ago of course you officially announced the spin-off of dell technologies wasn't a huge surprise but the 81 equity ownership of vmware are you worried about untethering vmware from dell maybe you can share more on what this means for the future of of your two companies and your customers right so you know i think this will drive additional growth opportunities for both dell tech and vmware while it unlocks you know a lot of value for our stakeholders what we've done is to formalize the commercial uh relationship into a series of agreements and those are unique and differentiated and they provide lots of flexibility and you know we've driven a tremendous amount of innovation together and that's going to continue uh and it will you know one of the things we said back in 2015 you'll remember is our commitment to keep the vmware ecosystem open and independent and working across the whole industry we've done that uh you'll continue to see us innovate together with edge solutions certainly all the great work we've done with vxrail sd-wan you know tanzu creates this platform to modernize applications and vmware cloud and dell technologies are the the easy path to a multi-cloud architecture and you know that continues to work uh super well and is not going to be slowed down at all so and of course i'll continue to be chairman of both companies and and uh you know we're not selling vmware we're distributing our ownership to our shareholders well of course dell is the the largest sort of channel if you will for vmware so that's that's a you guys got a tight relationship but i want to ask you about digital transformation everybody talked about it pre-covered but nobody really knew exactly what it was and but covet sort of brought that into focus very quickly if you weren't a digital business you were out of business so so going forward how do you see that whole digital transformation playing out you know i i think the plot of any company is to figure out how it can use its data and turn that into insights and outcomes and better results and ultimately competitive advantage faster and as you said you know if it's if it's not able to do that it's it's probably going to go out of business and uh that agenda just got massively accelerated because it was kind of digital was sort of the only thing that worked uh during during this this past period so uh every organization has figured out that technology is not the i.t department it's actually the fulcrum of progress in the entire company and so uh we're seeing sort of across the board a dramatic acceleration in the investment in digital technologies uh you know edge is growing very fast i think 5g just accelerates this and you know you're seeing it in all the demand trends uh it's it's it's quite positive and you know i think you'll see even a more rapid separation from those companies that are able to uh you know take advantage of this and quickly adjust their businesses their organizations and those that aren't you better hop on board get left behind you know the edge you mentioned the edge it's it's a little bit like digital transformation you know kind of pre-covered and even post code it means a lot of things to a lot of different people but the telecoms transformation and 5g they they're certainly real how do you see the edge you know the the edges is think of it as actually the real world right it's it's not it's not a data center sitting in in the center of the universe somewhere and look today you know only 10 of data is processed outside of a data center but you know it's estimated by 2025 you got 75 of enterprise data will be processed outside of a traditional data center or a cloud and so as everything becomes intelligent connected 5g accelerates that it's going to be a huge acceleration of this whole process of digital transformation and and uh you know again um think about think about this i mean the cost of making something intelligent uh used to be really expensive now it's asymptotically approaching zero and of course all those things are connected they're talking to each other and exactly what does this mean for every industry nobody's really quite sure and not everything is going to work but you know uh we're seeing it in manufacturing in retail in healthcare and the growth on the edge is really accelerating in a meaningful way it's not so much about uh you know people talking to people with machines we know how to do that now it's about the things right and you know you've got like 200 billion arm processors uh you know out there in the last couple of years all those things talking to the other things generating data it happens in the real world that's what the edge is yeah as you know we're big big fans of the arm model and i think it just presents huge opportunities for companies like dell i i want to ask you about cloud and i have to say i think you know companies like dell have been maybe a little bit defensive over the last several years when it comes to cloud but i think you're starting to see the cloud as a gift with all that capex that's being built out by these hyperscalers you know thank you it seems to me you can build on top of that how are you thinking about the cloud as an opportunity for you and your customers especially as the definition of cloud evolves well first you know what we see is and the edge is kind of the third place or the the third premise right you've got clouds in in in the public forum you've got the colo which is really growing fast and and you know the private hybrid clouds and now you've got the edge and so uh you've got infrastructure all over the place with edge being the fastest growing you know one of the big things we see is that customers want a consistent way to operate and execute across that whole platform and one of the other things that we've been focused on at dell technologies is how can we move our business to more of a service and subscription on demand and and provide customers that flexibility to to pay as they consume and so to some extent this is an evolution of you know products to services to manage services to everything as a service and so uh you know look at our balance sheet you'll see over 40 billion dollars in remaining performance obligations as we move the business to that kind of model and it's been growing double digits for several quarters in a row and so you know we're embracing cloud and on-demand and as a service and obviously here at dell technologies world we're talking a lot about apex and our continuing initiatives to move our whole business in that direction yeah apex is a real accelerator for that model i want to switch topics a little bit i got a long list of things i i want to talk about uh esg sustainability inclusion you know is another another topic that uh that i'm interested in i want and i said before people like yourself that in a position of influence to influence public policy and obviously the employees and your ecosystem why is it not just the right thing to do why is why are those things good business michael well it's good business because people want to be part of something that is important and purposeful uh you know it's not just make a profit and earn a living right you know people want to be inspired and feel they're part of something special and look i think if you look at the positive changes that have occurred in the world certainly you could turn on the news and see the horrible things that happened in the last 24 hours or something like that but if you step back and think about the amazing progress that's happened in the last several decades you know a lot of it's been driven by technology and by businesses that have uh stepped up and made a difference and made commitments and um you know we're we're one of those companies that has made a series of commitments uh you know ten years ago we set out with our 2020 goals we accomplished a significant majority of those retired those now we set out our progress made real 2030 goals all around the esd themes and it's not only the right thing to do but it is good for business it inspires our team members our customers and i think initiatives like like progress made real uh at dell and and thousands of other companies ultimately those are the things that are going to drive progress forward i believe you know more so than uh government edicts or regulation those can play a role but i think i think companies voluntarily uh driving things like the circular economy and how we include everyone in our in our business and provide opportunities for for everyone to succeed no matter where they come from i think those are the things that are really going to drive the world forward well i want to ask you about public policy because as you say it's not just the government but of course sometimes the government can get in the way uh you're seeing a lot of vitriol around break up big tech but at the same time you're seeing the us government and the eu very willing to help out with the semiconductor competitiveness and the like i know you were tapped uh with the new administration president biden tapping you know the best minds in tech uh and you were asked to sort of participate give feedback what can you tell us about you know your advice to the the us government well you know lots of lots of great discussion with the new administration and uh it's a delight to see that they're focused on semiconductors and sort of the industries of the future uh this is a big deal i mean you know uh we've got some big global competitors out there uh other nations that are with a deterministic strategy very focused on the industries of the future the u.s uh you know if you think about the atomic age and you know the apollo missions that created the whole semiconductor industry uh arpanet and ultimately the internet and that kind of stopped right you know you know there wasn't as much government investment in some of those big r d initiatives that really drove an enormous creation of industries and success uh for for for the united states uh and its citizens and so i think i think focusing on semiconductors and how you build the infrastructure of the future uh really important uh for for the united states to continue to be a leader in that you know we were you know producing at one point about 37 percent of the world semiconductors it's now down to 12 and dropping and really important that more investments are made in that area it's a combination of capital uh talent uh you know education knowledge and also um you know the the the policies that promote the development of these kind of businesses yeah well pat's got a very big challenge ahead of them and so that's why but we've said intel's too strategic to fail in our view but um i wanted to plug your book a little bit uh my former boss you and i have talked about this he was also a gentleman who proved leo deroser wrong he very nice guy but also a winner play nice but win why did you decide to write another book well you know dave uh a lot has happened in the last uh 20 years and and especially the last nine or so years since uh we went private and you know merged with emc and vmware and went public again and um you know i'd say first of all you know when i wrote the first book in in 1998 i wasn't comfortable uh disclosing a lot and and that i wasn't wasn't vulnerable enough uh and and didn't feel didn't feel you know uh able to do that but no i do you know i'm i'm older you know hopefully a little wiser and so i think everybody's gonna like hearing some of the fun stories about not only my childhood but um you know the the dorm room and and you know beyond and and and leading up to uh you know the pivotal uh changes that have occurred in the last decade my uh alligator wrestling with carl icahn and other you know there's lots of fun stories in there i got arrested one time it was only for speeding tickets don't worry um but uh you know lots of fun i'm really looking forward to to the book coming out and and being able to talk about it i can't wait uh you know i've said many times that anybody who can beat the great icon is interesting to me i wanted to ask you i mentioned my old boss pat mcgovern i used to say them all the time pat how come you don't buy more companies and he'd say dave you know the vast majority of acquisitions emerges they fail to meet their objectives did you ever imagine i mean i did the emc acquisition how could it not have exceeded your expectations i wonder if you could give us your final thoughts on that you know um and i talk about this a lot in the book i mean these are kind of the ultimate considered decisions and in the case of the emc combination it was something that we had thought about going back to 2008 2009 and and then you know started thinking about it in 2014 uh worked on it for a full year before it got announced in 2015 and finally closed in 2016 but yeah i mean uh you know we we thought it would be great it turned out to be even better than we thought the revenue synergies were far greater the teams were quite energized customers liked what we were providing and uh you know um it's it's and and of course the markets were supportive right you know we we we were paying close attention to interest rates and how we could structure the merger in a in an attractive way and yeah thank goodness uh lots of hard work lots of determination um you know it's it's it's worked out quite well yeah great great commitment from the from the dell team as well well congratulations on that go ahead please and and the adventure continues right it's it's i can't wait to see the next chapter and i can't wait to get the book congratulations on on that all your tremendous success you you are a winner and a gentleman and a friend of the cube michael dell thanks so much thank you so much dave and thank you for watching this is thecube's continuous coverage of dell tech world 2021 the virtual edition keep it right there right back you
2021-05-06