Michael Dell On Driving Channel Growth, Dell-EMC's $4.5B R&D Investment And Naming A New Global Channel Chief

Dell On The Record

With roughly three months to go before the anticipated close of Dell's $62 billion acquisition of EMC, the company Tuesday named John Byrne as Dell-EMC's global channel chief.

Dell Chairman and CEO Michael Dell said in an exclusive interview with CRN that Byrne has proven his ability to drive channel growth during his time over the past year overseeing the company's channel as global vice president for sales strategy, operations and channels for the last year. He reassured partners that they'd get to know Byrne better very soon.

Dell also discussed the status of the acquisition and touched on the level of research and development spending he expects from the combined Dell-EMC. He also spoke about the role VMware will play in the combined company and Dell's status as the biggest IT vendor in the world.

What follows is an edited excerpt of CRN's conversation with Dell.

When do you expect the deal with EMC to close? What are you doing to make sure it stays on track?

It's very much on track, and I'm confident it'll close in the timeframe we stated, which was October. Probably sooner.

How will VMware fit into the combined Dell-EMC, and how important is it to drive the company's position in the data center?

We love VMware. VMware is an incredible company and is very well positioned with the software-defined data center, with everything that's going on with the need to embrace a multi-cloud environment. VMware is a tremendous agent of innovation. You look at what they're doing, and you look at what's coming up at VMWorld in August, Pat [Gelsinger, VMware CEO] and team are going to be showing off their latest. I'm super excited about VMware. Dell and VMware always had a close partnership, even prior to EMC's acquisition. Dell was one of the early investors in VMware, and I couldn't be happier with the way things are working out there.

Hewlett Packard Enterprise CEO Meg Whitman (pictured) said Dell is going to have trouble investing in R&D because of the debt load of the EMC transaction. What's the Dell-EMC R&D investment plan?

We'll invest close to $4.5 billion in R&D, which is maybe close to two times what that other company you mentioned is investing, so any statement to the contrary is just misinformed.

I think if one looks at what is going on, if you look at the interest rates on corporate debt, you have to go back to 1956 to find lower rates. What we've been able to do in first taking Dell private, and now EMC private, is create the largest enterprise systems company in the world with a structure of investment-grade secured debt. It gives us enormous flexibility to invest in our go-to-market, our channels, our partners, our research and development. I will apologize to no one for the strength of our company, and anyone who calls it otherwise is just not dealing in facts.

How does being a privately held company help you drive market share gains with partners going forward?

We've been investing in research and development, in sales coverage. Last year, we added CDW. When you go down the roster of the top channel companies in the United States, when you look across Dell, EMC, VMware, we've got the broadest set of solutions and we've got great partnerships. I've been spending a fair bit of time with a number of [partners] in our advisory council, partner summits, one-on-one meetings.

How important is scale and size versus speed and being nimble?

They're both important. You need agility and speed and you need scale. One of the things I love about our structure is that we have the ability to do both. For example, look at Boomi. Here's a great little business that we're incubating within Dell that's continuing to near-double in size each year. Look at Pivotal or SecureWorks. These are businesses that are growing quite fast and are truly nimble in how they operate. The structure we have allows us to be both and agile and fast and nimble, as well as have scale where scale matters.

You have a lot of channel talent in the organization. Why did you choose John Byrne as global channel chief?

John has been running the channel here at Dell for the past year. He was also assigned a big role in putting together the whole route-to-market for the combined Dell-EMC. We're really fortunate to have an incredible team of people in the company. So, not taking anything away from the rest of the team, we concluded John was the best captain for the team, although obviously it's a big team, a strong team and a growing team. I'm very excited for our partners, for our team. We're well-positioned.

What impact has John had over the last year, and what impact do you expect him to have as he drives go-to-market for the combined Dell-EMC?

Our growth in the channel continues to be quite strong and healthy. John has led that. He's got a great background and partners that don't know him will get to know him very quickly. We continue to gain share. I think when the IDC data comes out, I'm willing to bet good money that we once again gained share. That'll be the fourteenth quarter in a row that we've gained share. EMC is doing well. Dell is doing well. VMware is doing well. I couldn't be more excited.

How proactive will you be personally working with partners to close deals as a combined company to make sure you get out of the gate fast?

Whenever we're in a city, we meet with partners. We'll have partner summits. We've got a regular dialog, and we've got a very big team across the world, and channel continues to be a growing part of our business. With the combined innovations of Dell, EMC and VMware, it's going to be even bigger.

You're going to be the largest IT company in the world with the broadest portfolio. What does that mean to customers and partners?

It's a humbling responsibility. We have to earn that every day. Our work is never done. If you step back from a broader perspective and say, 'What is the role of the IT industry in the world,' 'what we do actually matters a whole lot. It matters in education, in health care, in energy, and it's the engine of the world in terms of productivity and improved outcomes and progress. When you look at what's going on in the world with all this instrumentation, and whether you call it the internet of things, big data, look at what's going on in AI, and machine learning and cognitive computing. All of these things are driven by the incredible gains in computing power. We have a big responsibility to continue to deliver that as we're all embarking on the post-industrial revolution. We take it as a very big responsibility.