DTW18 & Connecting The DoTs (Part 1 of 3)

LAS VEGAS: During one of my Dell Technologies World 2018 briefings last week I had to stop part way through and explain that I meant , not Dell Technologies, when I used the DT acronym. The business phenomenon (AKA digitization or Industry 4.0) and its related technologies — cloud computing, Internet of Things (IoT), big data and analytics (BDA), mobility, social media and security — is literally an extinction-level event — it’s ‘go digital or die’.

While clarifying acronym anomalies is not a unique experience, it made me think of the greatest challenge I see facing Dell: how will the biggest IT infrastructure vendor — i.e. products and services — continue to prosper when the customer focus is moving to business outcomes, and not the bits and bytes that facilitate those outcomes? The answer is “better than everyone else.”

I don’t think it’s hyperbole to say Dell is better-positioned than every other vendor out there. That’s not to say countless companies won’t provide one or more superior offerings in the fast-emerging software-driven, cloud-first IT environment, but that when it comes down to the vendor to trust most — and most often — it will probably come down to Dell.

During his opening keynote to the approximately 14,000 customers, partners, employees, media and analysts in attendence — and an estimated 35,000 online — Michael Dell talked in generalities, stressing digital (along with IT, workforce and security) transformation  and the latest buzzword trifecta — AI (artificial intelligence), ML (machine learning) and NN (neural networks), ‘Make It Real’ (the event’s DT theme), and how “our customers are using technology to change the world for the better, whether through a reimagined process or a reimagined industry.” He noted that since starting the company 34 years ago, it had grown to over a trillion dollars in revenues and a trillion customer successes but all that is “absolutely noting compared to what’s ahead.”

The DT future — with or without Dell — is incredibly bright: spending on related hardware, software and services is expected to reach approximately $1.3 trillion in 2018, a 16.8% year-over-year increase, and continue growing at a compound annual growth rate of 17.9% through 2021 to more than $2.1 trillion. And the reasons so much money is being thrown at DT initiatives are equally compelling, as Dell (along with Intel and the Enterprise Strategy Group) told us in survey data released last month:

-transformed companies are 22x more likely to get new products and services to market ahead of the competition;

-81% of firms (4,000 were surveyed) agree if they do not embrace IT Transformation, their companies will no longer be competitive in their markets, up from 71% in 2017;

-transformed companies are 18x more likely to make better and faster data-driven decisions than their competition and are 2x as likely to exceed their revenue goals; and,

-96% of survey respondents have Digital Transformation initiatives underway and there is a clear connection between IT Transformation maturity and Digital Transformation progress.

“We are in a technology-led investment cycle which is very powerful today,” Michael added in a media/analyst scrum following his keynote. “We are number one in 22 markets, but the way I look at it is we have 2.6% marketshare.”

So the survey — and everybody else’s — offer fantastic news for the preeminent supplier of DT-related hardware, software and services. Or does it?

The other fact that stands out from all the DT-related studies is that digital transformation is hard, and most DT initiatives fail (between 70-84%). Transformation is the “hardest thing to do,” said the company’s new CMO, Allison Dew. “When the technology is done is when the hard work begins.”

What is unique about Dell is that it offers so many paths to digital transformation, to so many companies and organizations globally. It’s core businesses — Dell, Dell EMC, Pivotal, RSA, SecureWorks, Virtustream, and VMware — provide a broad array of branded and open solutions for the edge, core and cloud, litterally something for everyone, and no other vendor can make a similar claim.

The secret to DT success is to start small, according to Chris McNabb, CEO and GM, Dell Boomi, a 2010 acquisition that specializes in cloud-based integration, API management and Master Data Management. “You don’t have to boil the ocean to get started. Smaller projects have a much higher rate of success.”

Smaller projects enable organizations to set clear objectives, proofs of concept, and better understand the impacts and implications. “It doesn’t take these big massive projects to make a big change in a business.”

Already a leader in 22 product categories, the evidence that Dell is outpacing the IT market is pretty compelling. According to Marius Haas, President and Chief Commercial Officer, Dell EMC, the company’s indirect sales (channel) has over 500,000 named accounts globally, including public and federal institutions worldwide, and they added/reactivated 54,000 customers in the last 12 months. Dell is selling to 99% of the Fortune 500, and he said the channel could grow to more than 60% of total revenues (currently indirect represents $43 billion of its $79.9 billion in annual revenue, or 53%).

Talking to the channel partners at this year’s event, Michael Dell got a little more specific about the opportunitied in front of them. “What I see is that our addressable market is going from three trillion to five, six, seven or eight trillion; that is very exciting and it means that what we do is ever more important. The more you can elevate yourself to our four transformations, the better you will do for your customers.”

That’s not to say Dell’s continued success is assured, or even that all parts of the Dell family face a glowing future — i.e. the PC business continues to struggle as the market, especially in the U.S., slows down. However, where once Dell and the PC were synonomous, that’s no longer the case, and , networking, datacenter, virtualization, , software-defined-everything, cloud and digital transformation promise to power the company into a promising future.

For more information on DTW18, check out Connecting The DoTs Part 2-analysts’ insights and Part 3-product news.

DISCLAIMER: I hold shares in many of the companies referenced in this article, and Dell looked after airfare and hotel while I was at .

Author: Steve Wexler

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