Dell embraces ‘internet of things’ as key way forward

Dell World 2014 had a few things in common with the Dublin Web Summit

Michael Dell gives the keynote address to kick off Dell World 2014 at the Austin Convention Center in Texas. photograph: gary miller/getty

Michael Dell gives the keynote address to kick off Dell World 2014 at the Austin Convention Center in Texas. photograph: gary miller/getty

 

The only thing less anticipated by this reporter than heavy downpours in Austin, Texas, was Simon Le Bon’s lively attempts at convincing the 5,000-strong DellWorld 2014 crowd of nerds to dance to Duran Duran. He mostly failed.

Talk focused a lot around big data, the cloud and disruption. Unsurprisingly, it was almost impossible to find anyone, anywhere, prepared to say anything negative about Dell or its founder and chief executive. But then again there’s plenty of reasons for Michael S Dell to be happy right now.

He reacquired 75 per cent ownership of his business in October 2013 – spending $24.9 billion buying it back from shareholders – so it is an exciting time to be in the organisation.

Going private has allowed the tech giant to draw its attention away from profit margins into R&D and listening to what customers want. In an interview with The Irish Times, Michael S Dell admitted just how much fun he’s been having. “As we look at our business we can now ask what are the opportunities and the unmet challenges. These are in infrastructure, security, the internet of things, the cloud, big data, and the fun part about being private is that we can embrace risk differently.

“So were pouring a tonne of capital into innovation in terms of addressing those opportunities,” he adds. “Here at DellWorld we’ve rolled out a whole bunch of new products.”

Despite launching Dell in lots of uncharted waters over the last six years, his approach to success has not changed: do what the competition is doing, only better and cheaper.

Internet of things and

the PC The

conference was also a showcase to “pooh pooh” the conventional wisdom the PC is dead.

On the contrary, the PC is becoming “increasingly strategic” as a powerful local computer resource and hub for the internet of things.

“There are around 1.8 billion PCs in the world right now,” said Dell.

“They are deeply embedded in the infrastructure of how our world works. It is one of our stated objectives as a private company to invest in our PC business.

“There was 4.3 per cent growth last year in the industry overall – that includes commercial PCs, tablets, etc. Our US shipments grew 19.7 per cent. That means Dell represented all of the industry growth in the US in 2013.”

Company ‘restructuring’

Unless they’re talking about repainting the office, it’s rare you want to hear executives in any organisation talking too much about restructuring. As fun as things might be right now for Mr Dell and his colleagues, there have been significant job cuts in the last 12 months as part of the company shift into new areas at the expense of old ones.

The organisation had 110,000 people worldwide 12 months ago. They’re now at about 90,000. There is no danger to the 2,500 jobs in Ireland though, according to Aongus Hegarty, president of Europe, the Middle East and Africa (EMEA) at Dell.

“There are lots of new opportunities opening up in Ireland, and we’re very pleased with our Irish team. So I want to keep our presence in Ireland broad in nature. In fact we’re hiring and expanding.”

‘Bank of Dell’

The expansion of all things Dell-related goes beyond technology too. Fostering entrepreneurialism, capital ventures and whole-scale Dell Financial Services are now here. Dell Venture may be of interest to Irish start-ups with their sights set on California. “It’s basically a VC fund based in Silicon Valley,” says Dell. “It’s pretty focused. We’re not investing in things far afield. But as new tech firms come along in spaces related to ours, we’ll try and take an equity stake in some of them and help them develop, and create partnerships.”

While no announcements were made at the conference, Ireland would be the location of choice for a European Dell Venture, says Hegarty. “It is the central location for us in EMEA with the largest number of employees involved in the most diverse set of activities and businesses. So it is where we frequently bring many of our newest initiatives.”

The recent opening of Dell’s first e-commerce location outside of the US in Dublin as well as the Dell Financial Services Centre, essentially means a new “Bank of Dell” is located in Ireland. “We now provide Dell financial services in over 14 countries and are about to expand to three more at the end of this year,” says Hegarty.

“That’s all centred and headquartered in our HQ in Dublin. It’s having a significant impact as confidence lifts in EMEA. But working capital, cash flow, and credit are still major issues in Europe, particularly for SMEs.

“That’s what’s typical of our company now,” he adds. “We see credit limitations as a business challenge for us so it is our responsibility to try and fix it. We’re now financing technology end-to-end and designing solutions for our customers. We finance it so they can have the latest technology today but consume and pay for it over a longer period of time.”

‘Data unicorns’

While much talk during panel discussions, speeches and among attendees generally related to the three musketeers in current technology parlance – cloud, big data and disruption – it was the importance of connecting all the big data now being collected into a meaningful and useful way, that really stood out as the central challenge. And this challenge, it appears, cannot be solved by computers, but only by mankind.

In one panel discussion, moderator and Fortune Magazine’s senior editor Geoff Colvin said getting our hands on data is no longer the problem. However, a severe lack of qualified people to interpret it certainly is. “The data scientist is the unicorn of our industry today,” he said.

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