How to run a company like Michael Dell: A lesson in mergers, acquisitions, and cultural alignment

ZDNet sits down with Dell's CEO during Dell Technologies World to discuss how the company ensures that its set of goals are culturally aligned across all of the tech behemoth's brands.
Written by Asha Barbaschow, Contributor

The focus of Dell Technologies World in Las Vegas this week has been how the Dell Technologies brands mesh together, and with none of the tech behemoth's recent acquisitions having stood out as being nonsensical, the seven brands all appear to be strategically aligned, even allowing for partnerships with other large players such as Microsoft.

While it seems like an organic alignment, there shouldn't be any underestimation of the planning that went into the Dell EMC merger back in 2016, through to now, and even the future.

"We have what we call the Dell Technologies ELT -- leadership team -- where we bring together the CEOs of our family of businesses and we talk about the joint opportunities that we have: Overall market and how we can collaborate and coordinate together, and we create a set of objectives for technical collaboration, go to market collaboration," CEO Michael Dell told ZDNet.

"Certainly we have some shared IT and marketing and other back office capabilities that we're leveraging across the family of businesses and in that way we're getting the most out of all of the different parts of the Dell Technologies company."

Dell Technologies World 2019
Image: Supplied

Before Dell took ownership of EMC, roughly 75,000 people from both organisations were surveyed, with the results holding heavy weight in shaping the plan behind the merger.

"We asked the 75,000 people what are the things that make your current company successful, and turns out, there were about 22 things and the top five things were exactly the same -- and they were in the same order," Dell told ZDNet.

"The way I would describe this is, you don't want your engineers to be like your lawyers, marketing people to be like your financial people, but you can have an overarching set of values and our values -- it's innovation, it's winning together, its customers, its integrity and results."

Dell EMC was guided by a culture code, which the CEO said was a detailed description of what kind of entity would emerge from the combination of a software-centric company with a hardware-based one.

"It resonated very well, whether you came from here or here -- where you came from doesn't really matter, as much as where you're going, and so that's how we think about it," he continued.

"I think another big part of it is, we set out big objectives for ourselves in terms of our ability to gain share, to grow, to solve customer problems, and nothing to unify a team better than big goals and the team has responded."

Despite the trove of announcements centred on VMware, along with the company emerging somewhat as the glue that ties all of the Dell Technologies brands together, Dell maintained that he wants to keep the company separate.

"We don't have any plans to do that," he said in response to ZDNet asking if he had any intentions of making VMware a wholly-owned part of Dell Technologies.

"A big part of VMware's success is, yes, its integration with Dell Technologies, but also its independent ecosystem ... it's important to keep VMware as an independent industry resource to enable all of the technology industry."

EMC also had its own independent ecosystem too, with Dell back in 2016 saying that out of the thousands of customers both companies had, only around 1,000 were shared.

Speaking with ZDNet at VMworld last year, VMware CEO Pat Gelsinger echoed similar sentiments, saying the VMware of the future is one under the Dell Technologies stack, but the direction of the company is one that benefits VMware and its customers, first and foremost.

"With respect to Michael [Dell] and Dell, the way it characterises is this: They're running a superb hardware business, the number that they're seeing for their growth rate are dramatically larger than their competitors ... Michael's never had a successful software business and looks at me and says, 'You seem to have it figured out'," he explained.

"We've laid out a multi-year strategy and we're executing on it. That said, we also see this interdependency that's being highly beneficial to both companies -- the best example of that is VxRail today, which is now experiencing triple-digit growth in that product. When you're number one in that category and we're seeing triple-digit growth ... twice as fast as number two -- that's pretty good right?

"When we do come together [with] engineering products, there's a clear customer value proposition with our software and their hardware, we can build a lot of value for customers in the market quite rapidly. You're going to see us do more of those things."

Read more: Pat Gelsinger on the future of VMware

On Dell Technologies' return to public trading in December, Dell said the company in 2019 is vastly different to when it started the process of going private in 2012.

"[It is] now seven years ago -- it's a very different company now than it was, in terms of its capabilities and our ability to help customers transform and it's also quite a bit larger," he said.

"We are focused on how do we help our customers prepare for, and make the most of, the digital age ... our goal is to help customers do that and fortunately it's working well, our plan is working, and I think more and more customers are trusting us to be their partner in that journey."

With the likes of IBM last year scooping up another tech company in Red Hat, industry consolidation is a trend the Dell CEO has been anticipating for years, he said, and one he expects to continue for the foreseeable future.

"Sometimes it occurs organically and sometimes it occurs inorganically," he said, smirking. "After the combination of EMC and VMware and Pivotal, we are far bigger than any of the individual companies added all together -- the revenue synergies have been quite significant."

Dell pointed to the expectations of customers and the idea of Dell Technologies as a whole supporting the trends that customers want.

"If you think about the challenges that customers face, they don't want to be systems integrators, they don't want to have 20 different providers of all of these different elements and put them together themselves," he told ZDNet.

"No customer came to us and said we would like you to divide your company up into 20 small companies that don't work together ... they actually want one solution and they want all to work together," he said.

"There's also this realisation that the challenges customers have with digital transformation means they don't want to worry about all of this infrastructure, they just want it to work."

"I think industry consolidation will continue; I think we're in a great position," he concluded.  

Disclaimer: Asha Barbaschow travelled to Dell Technologies World as a guest of Dell Technologies


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