Dell Shares : Enterprise

Launching Windows 7 – Will it generate an upgrade cycle?

DELL-Kristy H — Fri, 16 Oct 2009 15:33:00 GMT

As we meet with investors, we have been getting a lot of questions about a pending corporate upgrade cycle and whether Windows 7 will be a catalyst for PC demand.

First, let me say that we're very excited about the Windows 7 launch next week. Dell is one of Microsoft's biggest OEM partners, and due to a collaborative engineering effort that extends over the past three years, we really feel customers will reap the benefits from upgrading to Win7. Windows 7 has some very compelling features ranging from better applications and drivers to faster boot times and quick online capabilities.

So why Windows 7?

Beginning with boot time - it's fast. Windows 7 uses less memory to boot the OS than Vista. Microsoft removed unnecessary services and drivers from automatically loading, which reduces the boot time and the OS footprint occupied in memory. The user interface also has several cool new features. Jump lists or pinned applications facilitate opening recently viewed items, such as files, folders, or websites in a more organized fashion. And the snap feature allows you to snap two windows to the side of the screen and compare them side by side with ease.

Windows 7 makes it easier than ever to go mobile. Improved wireless connectivity results in less time to locate and connect to a network. And with location aware printing in the Professional and Ultimate versions of Windows 7, you no longer have to manually switch printers when moving from home to work or network to network. In addition, it can also run in XP mode which is great for customers that need a way to deal with legacy applications that aren't compatible with Vista or Windows 7. Clearly, these are just a few of the cool features you will find, so check out more details in our Direct2Dell blog.

As Michael recently stated regarding the use of Windows 7, "You will love your PC again".

What about a corporate PC upgrade cycle?

In commercial accounts, increases in information technology spending are most strongly correlated with improvements in corporate profitability and that will be the key driver of a commercial refresh. Specific to Win7, we have only seen about 30% of our commercial customers adopt Vista with the rest staying on older operating systems. With a weak economy, the installed base has increased to about five years for desktops and 3-4 years for notebooks. So many of our customers are working with older machines and running an operating system that is almost 8 years old. This coupled with the fact that new PCs are faster, considerably more energy efficient, and have much better graphics capabilities make for a compelling upgrade.

We're also working with Microsoft on the launch of Windows 7 next week, and on the upcoming launch of Office 2010. Everything we see right now from the direct conversations with customers to surveys with CIOs tell us an upgrade cycle is forthcoming and likely in 2010 - helped by Win7 but really driven by an improving economy.

Dell - Perot Systems

Robert L Williams — Mon, 21 Sep 2009 11:00:00 GMT

Today, Dell and Perot Systems entered a definitive agreement for Dell to acquire Perot Systems in a transaction valued at $3.9 billion. Terms of the pairing were approved by boards of both companies.

We anticipate the combination will close by end of Dell's fiscal 4th quarter, pending regulatory approval, and will be funded with existing cash. Perot Systems' current CEO, Peter Altabef will lead the combined services units of joint Perot Systems' and Dell's services units. The new business unit will be called Perot Systems, a Dell Company and will be run out of Perot's current Plano, Texas campus.

This acquisition is about our strategy to provide next-generation IT service delivery and grow our enterprise revenue base. This is a key acquisition in our strategy to transform the company and IT services will be a significant part of our strategy and we have been focused on finding the right asset in this space, which Perot Systems provides. Perot Systems' expertise in infrastructure & operations, business processes, application development services strongly complements Dell's existing services offerings and global reach. Not only do they have a robust services portfolio, but they have tremendous segment expertise, including growth areas such as healthcare and government.

This combination allows Dell to gain a scalable asset that we can leverage our direct customer footprint to build out rapidly. We think we can add on other assets (including ours), and globalize Perot Systems into a strong global service company. Perot Systems' world-class services innovation brings several key service offerings we don't enjoy today. Another critical element to understand regarding this announcement is that Dell and Perot Systems are very familiar with each other from a capability and cultural standpoint. We have enjoyed a longstanding relationship over the past several years and with our announcement today take this relationship to the next level, which will allow us to deliver the best possible value for our customers. The pairing results in a compelling combination of companies that have similarly strong, relationship-based business cultures, and that are known for focus on helping customers thrive by using IT for greater effectiveness and productivity.

There will be more details about this acquisition once we close and satisfy the customary regulatory requirements involved. In the end, our strategic mission remains the same -- to provide disruptively great value to our customers... while balancing our financial goals of liquidity, profitability, growth. Thanks and we welcome your questions as always.

Rob

Additional Information

The planned tender offer described in this blog posting has not yet commenced. The description contained in this blog posting is not an offer to buy or the solicitation of an offer to sell securities. At the time the planned tender offer is commenced, Dell will file a tender offer statement on Schedule TO with the Securities and Exchange Commission (the "SEC"), and Perot Systems will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the planned tender offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other tender offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully before making any decision to tender securities in the planned tender offer. Those materials will be made available to Perot Systems's stockholders at no expense to them. In addition, all of those materials (and all other tender offer documents filed with the SEC) will be made available at no charge on the SEC's website: www.sec.gov.

Review of Dell's 2009 Analyst Meeting

Robert L Williams — Tue, 14 Jul 2009 19:00:00 GMT

Dell Equity Analyst Meeting

Today more than 200 participants, including analysts and investors, joined us in Austin for Dell's Analyst meeting. There were also a record breaking number of webcast attendees for this meeting, where we broke our record of 400, rising to nearly 500 participants. This meeting was an opportunity to hear directly from Dell's senior leadership on our near-term operating agenda and long-term strategy and address questions or concerns. The presentations from this meeting are available for viewing online,

This year, the meeting and briefings took place the same day. Dell executives discussed the company's strategy and operating agenda along with a financial overview and update on its four customer segments.

We are competing in a rapidly changing environment. As a result, we are improving our core business performance while expanding and extending across a broader set of customer solutions. Key messages delivered today were Dell's differentiated view of how to win in enterprise, our strategic mission "to provide disruptively great value to our customers", and that both these items will be realized through a combination of internal investments, partnerships and inorganic growth.

The meeting was opened by Michael Dell, Chairman of the Board and CEO, where he discussed Dell's key assets, view on the enterprise, and long-term priorities. Michael noted that Dell has a strong presence and currently holds #1 or #2 share position in most key segments. He also covered strategic priorities to deliver operating income and cash flow growth as well as the requirements needed to win longer-term.

Brian Gladden, CFO, followed and built on striking the optimal balance between liquidity, profitability and growth. Brian reviewed Dell's operating agenda, gave an update on the solid progress on $4B cost reductions, and provided a long-term value creation framework that articulated Dell's vision for revenue growth, profitability and cash flow generation. He also stated that Dell is well positioned to benefit from an economic recovery and will continue to provide strong liquidity.

Steve Schuckenbrock, President of Large Enterprise, walked us through our higher-value & higher-margin enterprise vision which addresses innovation and virtualization in next-generation data centers vs. our competitors' full-stack approach. He also reviewed how Dell is delivering steady growth in its core business while powering enterprise efficiency through innovation without legacy. For example, we approach services very differently from our competitors. We believe services should be customizable, a la carte, and available remotely. We let customers choose which services they want and when they want them. And we provide solutions where consultants are available - but not required.

Paul Bell, President of Public Sector business, addressed how Dell is aligning its global organization for balanced geographic expansion via vertical solutions designed for three unique customer bases -Education, Government, and Healthcare. Paul mentioned the challenges in this segment due to the macro environment, but also highlighted opportunities that exist internationally as well as those related to stimulus funds. Requirements needed to win in the Public sector include deep expertise in the sector-specific challenges, solutions investments, technology leadership, and solid partnerships.

Steve Felice, President of Small & Medium Business, presented Dell's plans to lead in the SMB space through innovative solutions and its go-to-market strategy. Steve reviewed the varied needs across the customer base of Small Businesses and Medium Businesses as well as regional opportunities to grow the business. He highlighted the solutions and product offerings that will help drive growth in each of these areas along with the benefits offered through SMB's go-to-market strategy. Having a multi-channel strategy will enable Dell to expand presence in under-represented geographies and drive incremental growth in enterprises and solutions.

Ron Garriques, President of Dell's Consumer Group, walked through consumer's brand architecture, its multi-channel customer portfolio and how it's bringing a disruptive approach to PCs. Dell grew to 33,000 retail stores globally in two years. Clearly, there is a lot of opportunity to continue to grow in this retail space. Ron reviewed Consumer's plan to grow faster than the industry through aggressively managing costs to reflect the multi-channel infrastructure, expanding global presence, and offering competitive products. He also reviewed plans to reinvigorate Dell.com to create a destination for all customers.

If you haven't already seen the presentations, I encourage you to watch a replay of them here.

As always, we welcome any questions or comments.

-Rob

Dell Storage Portfolio - EqualLogic PS Series

Robert L Williams — Mon, 22 Jun 2009 19:06:00 GMT

Data is generated at a faster rate than ever before and the need to manage this data efficiently is extremely critical. Also, with heightened regulations, enterprises are required to store more data for longer periods of time, which also increases the demand for storage capacity.

Based on this massive data growth, storage is considered more resilient than other IT hardware in this challenging economy, but customers still require optimal, cost effective solutions as budgets are more constrained. Customers also want confidence that their data is easily available and protected. Recent IDC research estimates the annual cost to maintain storage is 1.5x the cost to acquire the storage. We believe these challenges provide Dell an opportunity to offer customers solutions that will require lower maintenance and improve their overall ROI.

So why Dell? Dell offers a complete storage solutions portfolio which includes EMC, PowerVault, and EqualLogic that covers file storage, block storage, and data protection. Due to Dell's recent announcement on the expansion of its enterprise technology portfolio, I'd like to focus on the EqualLogic PS Series. The recent expansion includes the EqualLogic PS4000 storage array which is designed for remote offices and small medium businesses, provides an affordable entry point for smaller configurations, and offers the same benefits as previous PS Series generations. EqualLogic PS Series have a comprehensive feature set built-in with the software and applications expected from an enterprise-level SAN. This all inclusive feature comes at no additional charge rather than à la carte pricing, which can become costly for customers. There is no additional software to install or service costs to incur to initiate the data management and protection features for this enterprise-class SAN.

The EqualLogic PS Series solution simplifies storage technology, management, and business practices. The PS Series is an iSCSI SAN, so the use of IP and Ethernet networking technology keep costs down on switching hardware and on training costs. Also, instead of making customers play a capacity guessing game, and over-invest in hardware, the PS Series can be expanded modularly, so customers buy only what they need now and pay as they grow - all without disrupting applications. With the EqualLogic peer storage architecture, customers can buy one generation of hardware, expand with a second and third generation of arrays - all online, all within the same SAN, and then retire the older hardware as they see fit. Customers also have the option to download the latest software items to update their arrays at no additional cost. All of these unique features yield TCO benefits: Less time managing storage, all-inclusive software package, pay-as-you-grow model, and cost-effective iSCSI network all help reduce the total cost of ownership for storage.

In 2008, Dell was #1 in iSCSI storage and also received the PilotHouse Award as the Best Overall Storage Provider for Virtual Environments. Dell also ranked in the March 2009 Issue of Storage Magazine as #1 midrange array provider in terms of user service and reliability. The PS Series 2008 sales growth was 134% Y/Y. Also, 82% of the EQL sites were new enterprise storage sites, where our indirect Partners represented more than 55% of these new sites.

The end result is a win-win situation with happy, loyal customers and a sustainable, profitable business.

Jeff Clarke, Vice Chairman, Technology and Operations, Discusses Progress on $4B Cost Initiative

Robert L Williams — Fri, 17 Apr 2009 14:50:00 GMT

I recently sat down with Jeff Clarke, Vice Chairman, Technology and Operations, to discuss a range of topics that have received investor attention including:

Declining Client ASPs in the commercial customer business
Desktop and mobility virtualization
Progress on our $4 billion cost initiative
Optimization of our global manufacturing and logistics network
What we are going to do with the savings we realize from some of these initiatives

As always, I look forward to your questions and comments!

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Dell's Competitive Position in Blades

Robert L Williams — Tue, 31 Mar 2009 16:10:00 GMT

Last week, we achieved yet another milestone in enterprise computing with the launch of our latest enterprise solutions - including our 11th generation PowerEdge servers, a new EqualLogic storage product, and new systems management capabilities. These offerings are specifically designed to help our customers become more efficient and maximize their return on investment in data centers. As part of this launch, we introduced 14 new enterprise products that help customers cut cost and complexity through simplified management, industry leading virtualization and innovative solutions. Two members of our executive leadership team, Steve Schuckenbrock, President, Large Enterprise, and Brad Anderson, Senior Vice President, Enterprise Product Group presented at the launch event in San Francisco on March 25^th.

In today's discussion, I am going to focus on our blade servers. Data centers today have faced increasing challenges as they have grown. The sprawl of many servers, plus the resulting challenges to power and cooling, has dramatically increased the role of blade servers. According to industry research firm IDC, in calendar Q4 of 2008, blades made up roughly 15% of the x86 server market by volume and Dell was ranked #3 worldwide with 9% market share. Per IDC, we grew our blade units by roughly four times the industry growth rate in calendar Q4 of 2008. IDC also projects that blades are expected to experience strong growth in the mid-twenty percent range from 2010-12.

With our M-series blades, the goal from the beginning was to design the most power efficient server enclosure in the world. Another driving force in data centers today is virtualization. Blades fit perfectly in a virtual environment as they take up less space than normal rack mount servers and together with virtualization, provide customers a physical and virtual consolidation to save data center space and ease management. Dell provides industry leading solutions for customers running virtualization. Our ability to boot directly to VMware software is also a key differentiator for us. Dell's virtualization servers provide 50% more DIMM slots in the M905 than any competitive four socket server and 33% more high speed I/O.

So how competitive are our blades? We hired a third party firm to run the exact same server configurations and benchmarks on Dell, IBM, and HP blade enclosures. The result showed that our existing M-series blades had up to a 19% power advantage, and up to a 12% performance advantage, over our nearest competitors. Last week, we announced some further enhancements to our M-series blade portfolio - our new blade architecture now has 27 percent lower acquisition cost and delivers 17 percent lower TCO (total cost of ownership) over 5 years per rack compared to HP's c-Class.

So from a competitive standpoint, we are very well positioned in the blade market space and we are the only vendor to provide fully modular switches allowing customers to grow their blade enclosure throughput as their data center needs grow. With our M-series blades, we also offer FlexAddress, which is a low cost way to keep the server's Ethernet or Fibre Channel connection when changing a blade. This can help reduce customer downtime and works with any switch infrastructure a customer uses today. Designed to solve the major challenges of any data center, our M-series blades can be the ideal way to unlock the optimal data center within a customer environment by maximizing the power, cooling, and consolidation needs of today and tomorrow.

As always, we encourage you to ask questions or leave comments on Dell Shares.

Dell E-Series Notebook Launch

Lynn Tyson — Tue, 12 Aug 2008 13:19:00 GMT

Today we introduced our new, business Latitude E-Series notebook line. This is the largest product rollout in our history. You may remember that one of our five strategic priorities is focused on notebooks. This launch is another milestone in notebooks as we move further down the path of expanding our number of products, designing around specific cost points and customer needs, while simplifying the overall experience for our customers.

As background, Dell has long been a leader in the commercial notebook space, currently holding 32.9% and 19.2% share positions respectively in the US and worldwide according to IDC. Overall our corporate business is a $52 billion business based on the past four quarters and Dell has sold over 50 million Latitude notebooks since the product's introduction in 1994. The importance of our notebook priority is underscored by a number of trends. Notebooks are expected to outsell desktops by seven times during the course of 2008, growing to a $137 billion opportunity by year-end. This increase will be fueled by explosive growth in the emerging countries, where Brazil, Russia and China all grew at over two times the industry in the past year. In fact, many new users are simply skipping desktops and adopting notebooks as their first PC.

Size isn't the only important dynamic defining the notebook industry, as notebook replacement cycles are typically faster than desktops and carry traditionally higher average selling prices and margins.

We typically undertake a wholesale refresh of our business products every five to six years to provide consistency and longevity for our corporate customers. This time around we have made significant changes from the typical corporate product rollout. We have listened to our customers whether they are road warriors, typical office users, or those with specialty and advanced performance needs. Based on that input, we have completely revamped the line, differentiating ourselves from the competition in terms of design, performance and portfolio breadth.

Some of the key product highlights, which set Dell apart from the competition with this launch, are:

A completely new look as we have made use of advanced materials, more aggressive design, and even added colors as we are beginning to see "consumerization" in the business market.
Highly mobile business customers continually ask for more battery life. In these news systems, battery lives can last as long as 19 hours on a single charge and have accelerated charging capabilities.
Dell Latitude ON, which provides near instant access to email, internet, and other calendar related items with multi-day battery time without full operating system start.
Better connectivity and security features with Dell Control Point. Dell Control Point is an exclusive application enabling management of all connection configurations and customizable security profiles in one spot rather than making changes in several control panels and applications.
This new product line also has significant range with everything from an ultra-portable system weighing in at only 2.2 lbs to a semi-rugged notebook, which has an outdoor viewable display and shock mounted hard drive to a product with superior graphics capabilities and a quad-core processor to handle the most demanding computing needs.

You will hear a lot about this launch over the next several weeks. I encourage you to learn more about the E-Series products at our E-Series site launch page (http://www.digitalnomads.com/).

As always, we welcome your comments and feedback on the launch through this blog. We look forward to hearing from you!

Dell’s Virtualization Strategy

Lynn Tyson — Thu, 26 Jun 2008 04:26:00 GMT

As I had previewed during our Q1 earnings call last month, I recently sat down with Brad Anderson, SVP and head of our Enterprise business, to get some more insight into our virtualization strategy, how it relates to our Server and Storage business, and virtualization's impact on the industry and Dell. Simply put, our mission at Dell is to Simplify IT by eliminating complexity in customer computing environments. There are a number of ways we are doing this - and virtualization is a critical enabler.

Virtualization has been growing rapidly because it solves real customer problems related to space, cost, and power. One of the things to keep in mind is that dynamic virtualized server environments work best when matched with an equally dynamic storage solution and that's why storage virtualization is of equal importance. In addition, you may also be interested in a host of virtualization related topics on Direct2Dell, our blog site for customers, which might further augment the v-log that follows.

We hope you find this discussion helpful. The vlog format is a new way for us to have a conversation with you and we look forward to your feedback. We have included a few supporting slides in PDF format in conjunction with the vlog that you can download or print. As always, we will respond to your questions and comments posted on this blog site as well as via email and over the phone. So please feel free to post on this site or contact us directly. We look forward to hearing from you!

Click here to view the PDF file associated with the vlog.

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