Dell Security VP: Companies Splitting Apart Are Making A Mistake

Dell Security Vice President and General Manager Matt Medeiros Monday told 600 Dell security partners that competitors that are splitting up their businesses are making a critical mistake, opening the door for Dell to gain a significant competitive advantage by integrating security into a complete IT stack from the desktop to the data center.

Speaking at the first-ever Dell Security Peak Performance conference in Orlando, Fla., Medeiros said companies that are bowing to investors' calls to split up are making a big mistake that will impact security down the road.

[Related: BoB Attendees: The Split Up, Spin Out Frenzy Is Just Beginning ]

"It is an unbelievable time in the tech cycle where shareholders, very few shareholders, I might add, are putting such influence on boards that they are deciding that it is better to be smaller and discreet than it is to be collective," said Medeiros, who himself took the SonicWall security business private before it was acquired by Dell two years ago. "I think they are making a mistake. I think the Dell advantage of having the critical IT stacks and understanding them is going to be to our advantage to be a better security provider. It is going to be to our advantage on how we can get more profitable and get more share of wallet from our customers."

Medeiros did not single out Hewlett-Packard or Symantec, which both revealed plans last week to split up their businesses, but he urged solution providers to work with Dell on integrating security into every segment of the business from mobile devices to network switches to the data center. "Work with us on continuing to put these pieces together," he said. "We are not taking them apart. We are going to build on what we have and continue to put better pieces together and create new innovations together."

HP last week said it will separate into two publicly traded Fortune 50 companies: a $57 billion PC and printing business and a $57 billion enterprise computing business. Just three days later, Symantec said it was splitting its $4.2 billion security business apart from its $2.5 billion storage business.

Dell's drive to provide complete IT solutions will show up in major new product offerings including a first-quarter 2015 commitment to integrate encryption end to end from client devices to networking and new functionality that brings Dell security directly into network switches, said Medeiros.

Medeiros credited Dell founder and CEO Michael Dell for building a complete IT architecture "vision" with an underlying security foundation that is going to drive major advantages for customers. As evidence of that vision, Medeiros pointed to Dell's decision to provide Apple iOS-based mobile device security, which will be available in the fourth quarter. "That is a huge opportunity for us," he said. "We respect the fact that we have to be a multivendor security provider. What does it tell you that Michael Dell said to go invest more in Apple iOS mobile security?"

Michael Dell is appearing at the Dell Security Peak Performance Conference Monday afternoon and then is scheduled to speak in a fireside chat with CRN parent The Channel Company CEO Robert Faletra at the BoB Conference.

NEXT: Dell's Decision To Go Private Is Paying Off

Medeiros said Michael Dell's decision to take the company private in a $24.9 billion leveraged buyout last year, one of the biggest buyouts in the history of business, is a critical advantage in the midst of the current industry turmoil. Dell faced pressure before the buyout to "get rid" of its end user computing group, said Medeiros. "He didn't just buckle and fold over to Wall Street," he said. "Thankfully, we have a leader like that."

Medeiros said he expects more splits and acquisitions over the next year as a result of shareholder pressure. "I took SonicWall private for these reasons," he said. "The shareholders had a very low understanding of what we needed to invest in to be part of the future. They were going to put us and others in harm's way. I see the same thing happening now. Wall Street has an expectation of value creation that sometimes is not the best way for business to be run on an ongoing basis. What I learned running a public company for 10 years is that the 89th day, making that quarterly call, was all about what did you do for me over the last 89 days vs. what are you investing for the long-term future to make your customers happy?"

The Dell Security Peak Performance conference is the first time in three and a half years that Medeiros and the Dell SonicWall security team have held their own security conference for partners. It comes with Dell stepping up investment in its security business, which includes some 5,000 employees throughout the company devoted to security and Dell now managing 60 million security end points.

Mark Moreno, president and CEO of C&M Support Services & Consulting, a Dell software partner based in Elkhart, Ind., said he sees Dell's commitment to provide an end-to-end IT solution as a big competitive advantage for customers and partners.

"Being able to source a single solution is the right thing to do," said Moreno, whose Dell business is up about 20 percent this year with his company moving to sell Dell EqualLogic in addition to Dell SonicWall. "The Dell acquisition was bumpy to get started, but quite frankly it is smooth sailing now."

Moreno said Dell's decision to pay a sales uplift for Dell direct sales reps for deals that go through the channel is paying off in higher sales and stronger working relationships in the field. "We did what [Michael] Dell recommended, reaching out to the Dell reps, and it works," he said. "It makes absolute sense."

Moreno credited Michael Dell for the improved channel commitment. "He was the antithesis to our business in the past and we have now seen he is an ally," he said. "That is a big change."

Charlie Wohlberg, president of Computing Solutions Inc., a Wantagh, N.Y., Dell partner, said he also sees Dell's position as an end-to-end IT supplier as an advantage for customers and partners. "I am glad Dell is a one-stop shop," he said. "It is easier to deal with integration and services when everything is done by a single provider. It's an advantage to be able to buy everything from Dell from desktops to servers to email security and firewalls."

PUBLISHED OCT. 13, 2014