Michael Dell: After buyout, ‘we’re all
done with whiners’
Ben Sklar/The New York Times
Michael Dell, the
founder and CEO of Dell Inc., said that after taking the
company private, the computer maker has the resources to
expand its $57 billion business and the freedom to make
decisions quickly
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From Wire Reports
Published: 15 December
2013 09:03 PM
Updated: 15 December 2013
09:03 PM
AUSTIN — Michael Dell is buoyant these
days.
After a marathon campaign to buy the
company he founded and take it private, Dell won approval from
shareholders in September and completed the $25 billion deal in
October.
Dell Inc., which had grown to one of
the biggest computer makers in the world during 25 years as a public
company, is now privately held. Michael Dell, the 48-year-old company
founder and CEO, owns about three-quarters of the company and his
investment ally, Silver Lake Partners, owns the rest.
The result, Michael Dell says, is a
company that has plenty of resources to expand its $57 billion
business and the freedom to move quickly without second guessing from
stock analysts and investors.
“We’re excited; we’re energized,” he
said. “We’re kind of at the start of a great new journey and we have
our destiny in our control. We have incredible people. We have great
assets. We have a strong brand and we have tremendous opportunity and
we couldn’t be more thrilled.”
Dell talked about his outlook for the
company in an exclusive interview with the Austin
American-Statesman at Dell Inc.’s Round Rock headquarters.
How do you think your job
changes with Dell as a private company?
A lot more fun.
Tell us why.
When you are a public company, you have
this 89-day shot clock. You have a lot of hands on the steering wheel
[saying]: “Let’s go this way. No, let’s go this way. We think you
should do that. Oh, you shouldn’t have bought that. Don’t do this.” So
there are legions of whiners, and we’re all done with whiners. [There
is] a lot of second-guessing and we don’t have that anymore.
Your schedule is probably
changed?
Our focus can change a bit to be more
thinking about a year, two years, five years, 10 years and that
provides great opportunities. We have a number of great businesses we
can invest in. We’ll spend $1.3 billion in R&D [next year]. We’ve got
tens of thousands of people around the world developing new products
and technologies. We’ll file a record number of patents this year,
many more than any year in the history of the company. We have 6,000
patents issued and applied for. And it gives us a real opportunity to
think about our business in a longer-term perspective.
Can you give us any sense of
what some of the possibilities for changes at Dell Inc. might be over
the next year?
For 30 years, we have kind of been
about understanding the customer and helping them apply IT
[information technology] in a way that helps move their business
forward. Of course, that has changed a lot, from 30 years ago, to 20
years ago, to 10 years ago. Now of course there’s all sorts of things
going on in the industry, whether it’s cloud [computing], big data,
social, mobile, all those topical things that are occurring, and we’re
very focused on those kinds of areas and we’re seeing a number of
interesting growth factors.
One is clearly the small and
medium-size business [customers] being able to take advantage of IT
that previously only large companies could get at. And Dell’s always
been kind of right at the center of that. And so making IT more
affordable for the tens of millions of small and medium-size
businesses out there, that’s a big part of what we do. Helping
customers move to the cloud, whether it’s a private cloud, public
cloud, combinations therein, that’s a big opportunity that is going
on.
In May, it seemed as though
Dell signaled a shift in its strategy for cloud computing. Can you
explain that?
What we’re really doing is helping our
customers adopt the technology that is relevant and important to them.
So if a customer wants to go to the cloud, we want to help them do it.
And it turns out that you have various challenges in doing that. You
have to integrate older applications with newer applications and
sometimes they’re on [the premises], they’re in the cloud, you have to
secure things, you have to manage, you have to budget-provision. So
there’s a lot of things that have to happen to have this work well, so
we’re building solutions to help customers do that.
The plan looks like Dell is
doubling down on client computing, not pulling back from PCs and
tablets, but pushing ahead aggressively. What is the rationale there?
You asked earlier about the cloud. So
if you have a cloud, what do you access your cloud from? The obituary
of the PC has been written tens of times and there’s still a
significant market. It’s definitely evolving. Clearly you have growth
in tablets; our business in tablets, from first quarter, second
quarter, just growing tremendously. This quarter again, massive growth
in tablets. The other thing we see is this move to virtual client.
Everyone knows about virtual server, but there’s a virtual client,
sometimes called cloud client, and so your PC is in the cloud
basically, and you access it with any kind of mobile device or thin
client. And then, if you go into businesses today, you still see
enormous amounts of productivity — work being done on all varieties of
desktops, workstations, notebooks, etc.
Going back to the private
company experience, obviously you’re not compelled to release
financial figures at this point, but will you even consider publicly
saying where your business is at or not?
The debt holders get information and
that’s available to them and that hasn’t been a problem. Revenue to
date for the company has been about $780 billion, so there’s your
information. What more do you need to know?
Somebody will want to know at
the end of next year how you are doing.
It’ll be a lot more than $780 billion.
Different analysts have
theorized about this transformation of the company, and some are
saying Dell’s got three to five years to turn something around and if
they win, they’ll probably be public again. Others say it might be
longer. Do you have a timetable for how long this takes?
I think there’s an interesting
precursor question. Let’s remember that in the last five years, we
built a whole new part of Dell in software services, data center,
security, systems management, that grew from 10 billion to 21 billion,
so, hey, that’s pretty good. And so we’d like to double that again.
But we certainly don’t have to go public to do that. In fact, as a
private company, we can do that faster. But we already did that, so I
guess I think the premise of the question may be wrong.
People say at some point your
debt holders and financial partners may say, “OK, where is the exit?”
Is that a fair assumption or not?
The company has strong cash flow, and
so our cash flow and balance sheet are in a very good position, so in
terms of servicing our debt, that’s very straightforward. We can do
whatever we want.
So just keep on doing it and
push it maybe even faster?
Yeah, I think we go faster. It’s
easier, more fun, and great to be a private company.
Kirk Ladendorf,
Austin American-Statesman
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