The heart of the annual Future In Review conference is a series of conversations between conference chair and curator Mark Anderson and various figures from across technology, science and economics. This year's conversations last month included one with a happy-looking Michael Dell, fresh from taking his eponymous company private. What did that change mean for Dell, both the man and the company, and for the industry as a whole?
Dell sees the change as one that frees up the company. He talks about an industry in transition, where going private let the company shareholders take the benefit from years of stock appreciation, and where he can now navigate that tricky transition. "Now," he said, "as a private company we can be bold. We were public for 25 years, and there everything you do you think about how it impacts the quarter. Then there are the annual shareholders meetings, which are just a lot of noise. So now we are able to innovate, to be bold, and to think about our business in the long term again."
Part of that boldness is changing the way Dell thinks about profit in its hardware business. It's no longer about margin on sales, where as he notes, the most successful company Lenovo is only getting around one percent. "We've found a route to profitability, with a mindshift from the medium to the long term." Dell now talks about what he calls "lifecycle profit", and the company is seeing accelerating growth in what was a declining and at best stagnant market.
"We're also building new businesses in software and security," he says. "And that was confusing to Wall Street, where investors wanted a big cash dividend."
It's the difference Dell sees between short term and long term investors, another of the reasons he took the company private, so it could concentrate on those new businesses without having to return cash to investors.
Dell is critical of the current structure of corporate investment. "Private companies are staying private longer," he notes, "And public companies are backed into a corner, with investors who restrict them from making necessary changes." Part of that problem he suggests is down to "Large mutual funds, who rent shares rather than own them, they buy and sell frequently, and have different motivations from the companies they invest in."
That's where Dell thinks being private is important: "As those motivations may not be consistent with growing a business over a long period of time."
Now he's taken Dell private, Dell is being asked how other companies can do the same. "There are mechanisms to do this now," he says. "And more than 10 CEOs have asked me about how they can do it in the last year." Sadly though he wouldn't name names.
Asked about the future, Dell looks to a growing data economy, built around what he calls "the internet of everything, where we go from million to billions of devices". That's where his company can build on its Quest acquisition, especially around the Toad data tool. "We're looking at predictive analytics using Toad, taking data and finding insights." But Dell is careful to remain cautious: "We're clearly in the hype cycle, and there will be mistakes. But it's a very exciting time."
Dell is also excited about opportunities in small and medium enterprises. "That's where there's growth in employment, and in innovation." There's also an interesting synergy with larger companies, as he points out: "The problem with the really big companies is that they have all these requirements, but nobody else needs that. And when we deliver, then they say it's too complicated."
So now Dell is focusing on 100 to 1,000 person companies. "We develop something for them, and then it's adopted by larger companies, in networking, in servers, in storage, and in management!" Dell sees the future of IT as four watch words: transform, inform, connect and protect. "Transform, that's the software defined data centre, inform is analytics, connect is how to access data securely from any device, and protect is security."
Asked about the venerable PC in an increasingly post-PC world Dell suggests it's really about productivity versus consumption.
"We have many forms of transportation, and if you have one, you don't get rid of another. So in the mobile world we're still using laptops." He asks a rhetorical question in return, "Do you send kids to college only with a smartphone?" For Dell it's about productive work — though there's always opportunities even in a smartphone world, as he notes, "With mobile devices: every 80, a new server pops up."
He sees a change around mobility in the enterprise: "Organisations were enamoured with mobile. But in the last six months or so, they've woken up and are upgrading productivity tools. That's led to the fastest growth since 2006 recently." As he says: "It's been the hype curve at an extreme."
Asked about how he thinks about security, he says: "It's insecurity really. Thanks to the changing nature of attacks security requires constant vigilance. You have to be breach ready." With what Dell describes as invisible bad guys, that means encryption, authentication, and connected security: "Across the endpoints and the network to do it in a much more connected way."
Security is impacting more than just network design and tooling, and Dell points out the effects of the Snowden revelations. He doesn't believe they've been good for business and have resulted in the return of trade barriers. "European governments are using them for protectionist policies, which makes things ultimately more expensive," he says. "I don't think it's the right answer in long term." US policies are also on his mind: "We need talent to maintain the place we are in the world. We need immigration reform."
What of the future? "The world is changing quickly into software," Dell says, "especially networking." He points to the work being done in the 100Gb working group, with 400Gb working group led by an engineer from Dell's labs. "We believe in Ethernet," he says. The new Dell is still very much a technology company.