Michael Dell: 'Blizzard Of New' AI Announcements Coming To Dell Technology World 2024 Amid Record Partner Sign-Ups
'Never been a better time to be a Dell channel partner. We are fully committed to our channel as we have been. The record sign-ups that we have seen for Dell Tech World certainly indicate the continuing interest and passion from our channel partners and we’ll have a lot to say about how we can win together,' chairman and CEO Michael Dell told CRN.
Dell Technologies founder, chairman and CEO Michael Dell said the company takes a “full system”
approach to creating the market-leading servers and storage that power the generative AI ambitions of enterprises around the globe, and it’s paying off.
“What we’re doing that’s different is we’re taking a full system solution approach to this, and if you think about it, the challenge here is not just lets-have-some GPUs,” Dell told CRN. “It is, what is the architecture required to be able to use the data? And to be able to do it in a way that’s going to create the outcomes. And this really starts with, ‘What problem is the customer trying to solve? How do you organize the data?’ What are the right tools?’”
Dell, who spoke to CRN ahead of Dell Technologies World 2024 this week in Las Vegas, said the company’s fourth-quarter results show early success. Sales of its AI-optimized servers increased 40 percent quarter to quarter. The company shipped $800 million worth of AI-optimized servers. In that same frame its backlog of those devices doubled quarter to quarter to $2.9 billion.
“We have a blizzard of new announcements coming targeted just at that, and some great parts of our ecosystem are going to be there, including (Nvidia) CEO Jensen (Huang), again,” Dell told CRN. “We’re going to be talking a lot about that at Dell Tech World.”
[RELATED STORY: Michael Dell: Post-Broadcom Dell PowerFlex Sees ‘Great Momentum’ As VxRail Alternative]
Dell Technologies turned 40 years old in May, the date when Michael Dell registered the company as PCs Limited in 1984. The meteoric rise that followed is technology industry legend, as the once smallest computer company in Texas has grown at the pace of global technology for four decades.
Along the way, Dell Technologies pivoted from direct to the customer to selling through the channel in 2007, a strategy that the company has embraced and grown over the years. Last year, Dell introduced Partner First For Storage, a concept that aligns Dell’s core sellers with channel partners, and compensates them more for deals that are closed with channel partners.
“We are fully committed to our channel as we have been,” Dell said. “The record sign-ups that we have seen for Dell Tech World certainly indicate the continuing interest and passion from our channel partners and we’ll have a lot to say about how we can win together. This industry has always been about ecosystems. The channel is a vital part of our winning ecosystem. We win. Our channel partners win. Our customers win.”
Dell Technologies’ partners told CRN they are enthusiastic about the new program, with Dell sales representatives calling to include them early in talks with sales prospects.
“Every deal they get, they are having their sales reps pulling in the channel partners from the get-go. Not when the deal is already moving towards the finish line. They’re engaging us much earlier than they used to. It’s extremely exciting. Our entire team is pumped up about it,” said Josh Lee, chief technology officer at Dell Platinum Partner, Nanuet, N.Y.-based VirtuIT.
Meanwhile, C.R. Howdyshell, CEO of Columbus, Ohio-based Advizex, a Dell Titanium partner, said the move has had a ripple effect across other lines of Dell business.
“There is no question that the Dell leadership from the top down is driving Partner First, and we’re seeing a significant uptick in activity, from a business perspective as well as in our offices,” he said. “The message is clear they are committed to the Partner First strategy and you can see it at all levels, and all geographies too.”
One area that Dell expects to see a turnaround is in PCs. Dell Technologies has anticipated the beginning of a refresh cycle for its client devices of PCs, laptops, workstations and peripherals, and it hopes increased adoption of AI will drive that.
“Our job is to make the next thing that much more compelling,” Dell told CRN. “That’s what we’ve always done. At Dell Tech world you’ll see on display, incredible new machines. We’re definitely seeing increased activity and increased interest. We believe the refresh is coming.”
Here is CRN’s interview with Dell edited for length and clarity.
We’ve been having a lot of success here. And you heard us talk about that in our Q4 earnings. We talked about how the AI-optimized servers increased nearly 40 percent sequentially and we shipped $800 million of AI-optimized servers. Our backlog nearly doubled sequentially to $2.9 billion.
I would say, what we’re doing that’s different is we’re taking a full system solution approach to this, and if you think about it, the challenge here is not just lets-have-some GPUs, it is, what is the architecture required to be able to use the data? And to be able to do it in a way that’s going to create the outcomes. And this really starts with, ‘What problem is the customer trying to solve? How do you organize the data?’ What are the right tools?’
Then when you get to the infrastructure part of the discussion, yes, compute, GPUs are very important. It’s also memory, and storage, and networking and how all that comes together. We’re going to be talking a lot about that at Dell Tech World.
We have a blizzard of new announcements coming targeted just at that, and some great parts of our ecosystem are going to be there. Including Jensen, again. So, I think we’re highly differentiated in having a complete solution approach and its working.
It’s a tremendous opportunity for our partners and the demand here is extraordinary because of all the things that we see going on, and the unlock of all the data that’s out there. Dell’s always been a company where data has been very important.
Going back to our historic combination with EMC almost a decade ago, we talked about how data was at the center of everything that was important. That is only more true today. It’s only going to be more true in the future. Being the leader in data storage with leading share, larger than number two, number three, and number four all combined, outspending all of them on R&D and innovation. you’ll see that innovation on display at Dell Tech World.
The OEM agreements, the distribution agreements all the paper you had with VMware has changed since November. When we talk to partners, even VMware partners, they are open about discussing alternatives. What is Dell’s alternative to VMware?
We’ve always been about customer choice. Look, VMware remains an important partner, but we’ve had other providers who help with hypervisors, and container platforms and you see us having relationships with all of the leading companies. That’s not really all that new.
Not all of them make VxRail though. That VxRail product is something that partners mention frequently as how much they love it, and how sticky that is with customers, what does VxRail look like next?
Before you came on, (Dell Chief of Partner Operations) Denise (Millard) was mentioning we’re going to have record partner attendance at Dell Tech World. Some of the sessions will absolutely cover the continued availability of VxRail. It's still available, anyone who wants to sell VxRail can sell VxRail.
And also, what are the alternatives? You’ve been hearing us talk about PowerFlex for some time. It's really our premier infrastructure solution, and it works with VMware, and it also works with RedHat and every hypervisor, and container platform. Its developer friendly. It works in all the public clouds. It works on prem, it works colo, it works everywhere. We’ve been having great momentum with that.
And if you want VxRail, you can still have VxRail.
Is PowerFlex going to be the “VMware killer”? I talk to Scale Computing CEO Jeff Ready, or Nutanix, and they all have special deals for moving customers over (from VMware) is that something that Dell is looking at with that product?
Again, we want to offer customers and partners the broadest set of choices. So some customers will want to continue to work with VMware and some customers want to do something else. They can do either one with Dell.
I had an opportunity to talk with Bill Scannell (president of Global Sales & Customer Operations at Dell Technologies) when Dell debuted Partner First for Storage. How do you like the success of Partner First For Storage so far?
I love it. But I’ll let Denise answer.
Dell Channel Chief Denise Millard: We’re in our quiet period so I can’t talk percentages, but we’re seeing it continue to accelerate. We just got through with partner advisory boards around the world both for channel and alliances and they’re seeing really positive engagement from our sellers.
Yes, it’s about growing share. Yes it’s about creating a place for partners to play. But it’s also about getting our teams to engage early with partners. So we can drive that scale and continue to take share across all markets.
The sentiment from the partners is, the pipeline is building and the revenue is continuing to build, the relationships and the trust is growing immensely. So when you combine a couple of quarters of success, but now that’s built on trust and now predictability.
You have a really great combination and I’m really bullish for the year.
I would like to hear from you on that Michael. I mean, you pioneered the direct-to-consumer model (in PC and Server). I know you’ve been in the channel since 2008, but...
2007.
Sorry, 2007, but I loved contrasting that when I was first writing about this. What was the reason behind giving (Dell President of Sales and Customer Operations) Bill Scannell the green light to do that and say, ‘Yeah, let’s go partner first for storage?’
Look, we have had some fantastic partners who have been doing great work with storage for a long, long time and we saw an opportunity to expand that. Making it even more clear our alignment with partners, and it’s working very well.
I have been participating in some of those partner advisory board meetings. Denise is in all of them. As I travel around the world and meet with partners I hear the same enthusiasm. They were excited when they heard the announcement, but they want to see it work.
Now we’re several quarters in, momentum is continuing to build and we’re super happy with how its going.
My understanding is Hock Tan called you to kick off the merger with VMware. And I know you know how messy mergers are. Did you expect this amount of upheaval? It’s still going through some growing pains, I guess, is this in line with expectations or something extra?
I think that’s a better question for Broadcom.
The Dell AI-enabled PC. You mention taking apart PCs as a kid. What is there to get excited about in a Dell AI enabled PC, for a kid today who wants to get really excited about and take apart?
Kids are excited by science and technology. They also come at it with a beginner’s mind, but they think of it as a toy. Something they can engage with.
So, I think this next generation that grows up with these incredible capabilities. We’re in an age of miracles here where we can tap into all human knowledge in incredible ways, with the power that’s in front of us. There’s never been a better time to be alive. Other than tomorrow.
On the PC refresh, I know you guys can’t talk about next quarter, are you more confident that is coming this year? I think it’s been forecast for a while, is it still coming?
I think it’s absolutely coming. There are some good signs there. You have the largest install base, ever. The systems are aging. As we know from decades of experience. It’s not a question of ‘if’ you will get a new PC, it’s a question of ‘when’ you will get a new PC. When do the capabilities and the features become compelling enough that you say that old one I got from three years ago, or five years ago, it’s just not good enough, and I want this new one.
Now, if you’re in a corporate setting. Or if you’re an individual, you’ve heard about this AI thing. If you’re going to buy a new PC, you’re probably going to want to have it last for a few years. Do you want a PC that’s AI enabled or AI ready?
What do you think?
Well yeah, I would.
Of course you do.
But I also cover this stuff and I know that the old processor is going to be just as good, I can still make it work and especially with the robustness of some of the PCs. We’re using web application software. Maybe I don’t need a new PC, maybe I just need something that can run a browser?
Until you don’t. Until something comes along.
Our job is to make the next thing that much more compelling. That’s what we’ve always done. At Dell Tech world you’ll see on display incredible new machines. We’re definitely seeing increased activity and increased interest. We believe the refresh is coming.
I did want to ask, last summer July I listened to Dell Technologies COO Jeff Clarke talk about the efficiency gains with GenAI and it was based on some of the conversations he had with Microsoft and he’s projecting 15 to 20 percent gains in efficiency, for workers generally speaking. We’re about a year on since that. Of course there’s been a lot that’s happened, you’ve pointed out how quickly all these advances are moving. Do you still see that gain in efficiency coming? If so when? It doesn’t seem like the copilot applications we’ve seen so far, or the AI assistants that we’ve seen so far on the user level, have gained big adoption?
Coming back to what we’re seeing with generative AI, the demand for AI compute, infrastructure storage, networking, et cetera, is really driven because large organizations have seen the opportunity for productivity and efficiency and sort of reimagining their company.
This is not as simple as you get a new PC and it’s got some software on it and all of a sudden magic happens. It is true that you cannot find a software developer who is not thinking about this. Every software developer that you write stories about is figuring out, how, wherever there is an edit prompt in their software for users, they’re using AI to make that a better experience. Whether it’s ServiceNow or Adobe or insert your software company.
But these companies have seen that when they look at their major processes, they can use these tools to dramatically improve efficiently on the order of 20 percent or more. Certainly in many significant functions. Software development. Sales and marketing processes. In the creation of content and reviewing documents. That takes some work in looking at their process flows and simplifying and standardizing processes, before they automate.
Those are all the things that we, and our partners, are helping our customers with.
Why is it a great time to be a Dell channel partner?
Never been a better time to be a Dell channel partner. We are fully committed to our channel as we have been. The record sign-ups that we have seen for Dell Tech World, certainly indicate the continuing interest and passion from our channel partners and we’ll have a lot to say about how we can win together.
This industry has always been about ecosystems. The channel is a vital part of our winning ecosystem. We win. Our channel partners win. Our customers win.