Interview: Dell's PC boss Jeff Clarke explains his strategy for success

In an exclusive interview, Dell vice president Jeff Clarke explains the private company's solution-based approach to the enterprise market - Transform, Connect, Inform, Protect - and its renewed focus on selling PCs to consumers and small office/home office users.

Jeff Clarke
Photo: Jack Schofield

Going into private ownership has taken Dell "off the radar" to some extent: it no longer has to disclose information to satisfy shareholders or, indeed, journalists. So I was pleased to meet one of its most senior officers, Jeff Clarke, who has been with Dell since 1987. His official bio says he serves as "vice chairman, Operations and president, Client Solutions, for Dell". Among other things, he's responsible for the engineering, design, development and global manufacturing of computer desktops, notebooks and workstations.

So, has going private had made a significant difference to Dell's operations?

"It certainly has," he says. "One is the long term view that the leadership and the company has. If you think about being a publicly traded company, you have a quarterly commitment process. As a private company, we've been able to really view the decisions that need to be made over the long term. We're doing what we believe is right for our customers. A customer-focused process is driving the right long-term decisions.

"The speed of decision-making has changed dramatically. We still have a lot of work to do, but if you look at the first 18 months as a private company, the pace at which we make decisions has vastly improved. Oftentimes we bring in to Michael [Dell] a series of business problems and a series of recommendations and the discussion goes like this: "The board's decided. Go do it." Like that. Speed.

"If you look at the strategy - which did not change when we went private - we've been able to make decisions to accelerate our strategy, moving down this path as an end-to-end solutions provider. We're making investments in what we believe differentiates us in the marketplace. In the future, we're going to be one of the few that have a real end-to-end solution for our customers, from the devices on the edge of the network to the devices in the data centre. From one company, an end-to-end integrated solution, not pieces of it. You get it from one shop, with one conversation. That's pretty powerful.

"We think this end-to-end framework is unbelievably important to our customers. They are bringing us into conversations about how to be more productive, how to secure information, how to use IT to solve business problems. That's one of the changes that I've seen in my long time at the company, and we've really continued to earn a trusted partner position."

Dell's approach to the market is based on a process summed up in four words: Transform, Connect, Inform, Protect -- or TCIP. Clarke explains that it's about transforming a business by connecting together "all their devices and users. Inform basically means taking all the data they have and turning it into information. Then there's protect, which is security."

Focus on the PC

I point out that Dell is the only one of the "big three" that still majors on PCs. IBM has sold off its PC and x86 server businesses while HP thought of selling off its PC business before deciding to split the company in two.

"One of the things about going private has been our new focus on the PC," Clarke says. "We believe the PC continues to be at the forefront of productivity. It's the machine work gets done on. And we've continued to build our consumer and small business reach, where the Vostro is an essential brand: it bridges the gap between our consumer product set (XPS etc) and our traditional commercial product set. It's the brand for SoHo and up, at very attractive price points.

Clarke has mentioned Vostro because he knows I'm a Vostro user: I'd been having a whinge about the lack of options in the Vostro line, and its disappearance from the UK market. It's not like the 1980s when build-to-order was Dell's market-winning strategy.

"What we've learned, particularly in our consumer business, is that the amount of choice actually became confusing, and the fact of the matter is that there is a great concentration of what people buy," Clarke explains. "What we've done - we call it 'smart selection' - is use our business analytics to find the buying characteristics of our consumers, and smartly selected the configurations that are most popular. And we've put those popular options closer to our customers so that we can deliver quickly, which our customers told us was important.

"We think we have a wide array of configurations. It may not be the choice you're used to, and we've narrowed them over time, but there is choice. Where the matrix says that choice matters - particularly for high-end users - we've continued to offer choices. In our consumer business, communicating millions of configurations was truly much more confusing. We found that picking our most popular configurations meant we could arrange them in a much more presentable way.

"[Dell] prides itself on listening to customers, and our customers were telling us to 'make it easy'. We've made it easier for you to choose Dell. Hopefully, we've made it easier to buy from Dell.com, and with some of the services we've provided - including pro-active support through ProSupport Plus - we've made it easier to own Dell.

"Easy to offer, easy to choose, easy to buy, easy to own. That's the value proposition.

"We think ProSupport Plus - the ability to do preventative and predictive service on our products - is certainly a differentiated service in the marketplace. And increasingly with today's mobile workforce, we think that's a required capability.

Consumer PC sales used to be a small part of Dell's business. What's it like now?

"As a private company we don't put numbers on it, but our consumer business is growing phenomenally," says Clarke. "We've brought together the sales, marketing, supply chain, products and services in a very tight cluster, in a single organization. Historically, it had not been that way. We've found that a tightly-integrated team is absolutely essential for success in the consumer market. It moves fast: you need to be responsive.

"Consumers still care about innovative products. There are still many that want to buy at price bands where the ability to differentiate isn't as great as it used to be, but at the medium and high price bands, innovation does matter. You can see that in the enthusiasm around our XPS and Alienware gamers' products.

"What's interesting from my point of view is that we have one of the most rich and diverse product portfolios around. We have fully rugged, gaming, XPS, Inspiron, Vostro, Latitude, Optiplex, Precision, workstation, notebook, desktop, our Venue Pro tablets, our cloud client computing service. We think PCs still matter. We think compute on the end of the network matters, and we're going to go into the Internet of Things. We think that's a natural extension of what we do. I'm not going to do wristwatches, wrist bands, consumer-oriented goggles and such, but a commercial implementation of the Internet of Things."

And finally, what does he think about Windows 10?

"I'm excited about Windows 10," he says. "I personally use it. It's very good. I think users are going to be pleased with its performance and capabilities. Whether it's a catalyst for sales in the current market, we'll let the market determine that, but what's good for Microsoft is good for Dell. We have an installed base of 1.6 billion or 1.7 billion PCs and 600 million of them are four years old or older, and an old PC just doesn't perform like a new one. We think Windows 10 is an opportunity to convert that installed base over time."

As Clarke gets up to leave for his next meeting, we shake hands, and I remind him that "the one-stop shop used to be IBM's sales pitch, in the good old days...."

"No, Jack, the good old days are in front of us. I'm optimistic."