DellShares

Evolving Stakeholder Engagement

Deb Albers — Thu, 17 May 2012 14:20:00 GMT

Stakeholder engagement, like many things, is evolving at Dell.

Over the past few years, Dell has progressed on its business strategy, evolved as a services company and acquired many strategic companies. Through these changes, we began seeing added value in engaging with the broader set of stakeholders, from customers and investors to non-governmental organizations (NGOs) and governments. We wanted to solicit feedback from subject matter experts on some of our sustainability ideas before launching them publically. This not only gave us the added confidence in our direction, but also gave stakeholders a better understanding of Dell’s decisions making process and improved their confidence that we were effectively progressing on these issues.

In late 2011, we put in place elements of our new stakeholder engagement strategy. Our Executive Director of Investor Relations and our Executive Director of Sustainability joined me to meet with key socially responsible investors (SRI’s) along the east coast. In these meetings we discussed measurable sustainability indicators, supply chain transparency and what leading practices in this space are being utilized. You can read about this engagement at Engaging with the SRI Community. These meetings were so beneficial that we are planning our second SRI Road show next month and we are investigating an international stakeholder road show later this year.

As we continued down this path of evolving our engagements, the first question was, “Who makes a good stakeholder to Dell?” Through a rigorous interview process we created a map of Dell stakeholders. We evaluated relationships on factors such as credibility, influence, willingness to engage and thought leadership. We investigated which common global topics our stakeholders felt were important to Dell and we found subject matter experts on these topics. Shareholder engagement needs to occur at the intersection of sustainability trends and where we found open, candid, and credible experts.

Once we identified the right experts, we applied the tool to relevant business issues. As an example, we are in the process of writing our 2012 Sustainability Report. We wanted to share the new direction, the dynamic content online, and the updated format with stakeholders to get their view early, while we still had time to edit the final report. We asked Ceres, a third party, to facilitate the dialog. Through a candid discussion with socially responsible investors (SRI’s), Non-governmental organizations (NGO’s) and relevant subject matter experts we walked away with critical information that ultimately changed the content of the report, with one of the key changes being increased supply chain transparency.

As always, we are looking for best practices, success stories and creative ideas for engaging stakeholders. You can send your suggestions to me at Deborah_Albers@dell.com or catch me on Twitter @DebAtDell.

Dell’s 2012 Industry Analyst Conference

David Mehok — Mon, 30 Apr 2012 21:07:00 GMT

Last week Dell hosted the 2012 Industry Analyst Conference in Austin, TX. Industry analysts from around the world heard from Dell leaders who spoke to our progress and proof points of success in becoming an end-to-end solutions provider. The conference included keynotes highlighting how we are innovating and investing to expand our enterprise capabilities. We further discussed how these capabilities and associated solutions actually create competitive advantages for our customers. There were multiple customer panels demonstrating the value of these solutions capabilities. These customers were very clearly able to articulate why they partner with Dell rather than many of the other solutions providers in areas such as consulting and security services, public, private and hybrid cloud offerings and various forms of end user computing solutions. As we continue to enhance existing solutions and use our IP to develop new solutions, it is changing the conversations we’re having with our customers from one of hardware specifications to how Dell can solve their business needs through IT solutions.

Last week we also announced additions to our Virtual Network Architecture (VNA) portfolio including our first 40 gigabit blade server switch (the first Force10 switch in a Dell blade chassis), extended management software, and interoperability with the OpenFlow standard for software-defined networking. The integrated solutions that Dell now has across both 10GbE and now 40GbE networking fabrics are able to connect 10GbE servers, storage and networking for our customers. Dell’s VNA is an open framework for virtualizing, automating and orchestrating network services in data center, campus and branch environments. VNA is for a dynamic environment that can adapt as customer needs change. Watch for further details at Interop Las Vegas 2012 on May 8^th.

As always we welcome your comments.

Dell Announces Acquisition of Clerity Solutions and Intent to Acquire Make Technologies

Robert L Williams — Thu, 05 Apr 2012 19:25:00 GMT

This week Dell announced the acquisition of Clerity Solutions and signed a definitive agreement to acquire Make Technologies. These two companies are leading providers of IT modernization solutions, which represents a key solution strategy for Dell.

IT modernization involves the transition of business critical applications from legacy computing systems (such as mainframes) onto industry standard infrastructure, including the cloud. It offers customers help to simplify, improve flexibility, reduce cost, and ensure reliability of their applications, data, and infrastructure.

Clerity Solutions and Make Technologies specialize in two different methods of IT modernization: Clerity is a global leader in application “re-hosting” solutions and services, while Make specializes in application “re-engineering”.

These acquisitions are clearly aligned with our strategy of finding best in class technologies in rapidly growing areas of our business. According to Gartner, the IT modernization industry is expected to grow from approximately $9B in 2011 to $15B in 2014, a growth rate of approximately 18% per year.

Dell expects to accelerate the growth of both companies’ solutions through the global distribution, scale, and financial resources that we can provide. In addition, given our focus on providing end to end solutions, Dell will be able to leverage the industry leading capabilities of Make Technologies and Clerity Solutions to cross-sell and grow other areas of our services and hardware business.

The acquisition of Clerity Solutions has been closed, and we expect Make Technologies to close in early fiscal Q2’12. We are projecting both acquisitions to be accretive to Non-GAAP earnings in FY14.

For more information, please see Suresh Vaswani’s blog posts on Direct2Dell (click here for Clarity, and here for Make). We are not disclosing the terms of either of these transactions but look forward to your thoughts and feedback.

Dell Announces Intent to Acquire Wyse Technology

Robert L Williams — Mon, 02 Apr 2012 16:15:00 GMT

Dell has signed a definitive agreement to acquire Wyse Technology, a global leader in cloud client computing, to significantly extend its desktop virtualization offerings and provide new market opportunities for the full range of Dell’s data center solutions and services. Wyse Technology, ranked #1 in thin client unit shipment volume in 4Q 2011, has grown revenues ~45% in the last year to ~$375M. IDC estimates that overall worldwide thin-client demand will grow 15% to approximately $3 billion by 2015 and that the end-to-end datacenter infrastructure stack for these solutions is expected to exceed $15 billion by 2015.

Dell’s existing desktop virtualization offerings include Desktop Virtualization Solution Simplified and Desktop Virtualization Solution Enterprise and its recent Desktop as a Service (DaaS) partnership with Desktone. Today, we take another step forward moving from sharing desktop virtualization intellectual property to owning IP with a more profitable, industry leading, and complete end to end desktop virtualization solution. The Wyse product portfolio includes industry-leading thin, zero and cloud client solutions with advanced management, desktop virtualization and cloud software supporting desktops, laptops and next generation workload scenarios. Wyse’s differentiation includes a customized thin client OS customized for the 3 major VDI platforms (VMware, Citrix, Microsoft) as well as over 140 software engineers. That type of differentiation allows Wyse to provide solutions that require less memory and processing power driving a lower cost to customers.

While this announcement is exciting for Dell on the end user computing side, it also holds promise for our data center solutions and services businesses as well as our software and cloud businesses. Our ability to now offer an industry-leading cloud client computing solution will provide opportunities for Dell to further accelerate the growth of our server, storage, networking, and services, lines of business, given the requirements necessary to support this type of environment. In addition, it will provide future opportunities in mobility and cloud computing. These include infrastructure management and content management-as-a-service solutions from the cloud to customers of all sizes.

The transaction remains subject to customary closing conditions. It is expected to close in early Q2 FY13 and is expected to be accretive to Non-GAAP earnings in the 2nd half of FY13. We are not disclosing the terms of the transaction. You can listen to a replay of the webcast with Dell executives discussing the acquisition and access related material here. You can also download a copy of the presentation by clicking on the PDF below this post or by clicking here.

As always we welcome your comments.

Dell Announces Intent to Acquire SonicWALL

David Mehok — Tue, 13 Mar 2012 15:00:00 GMT

Today we announced Dell’s intent to acquire SonicWALL, a leader in Unified Threat Management (UTM) solutions. This acquisition is an important next step in broadening Dell’s software portfolio in the critical area of security, which continues to be one of the biggest areas of concern for CIOs and IT executives in managing their IT environment. This segment of security is strategic with good projected growth. IDC estimates that the UTM segment will grow +13% per year through 2015.

SonicWALL’s solutions address key areas of UTM that include next generation firewall, intrusion prevention, virtual private networks, data loss protection, anti-virus/anti-malware, content filtering and application control. SonicWALL generated approximately $260M in revenue on a trailing 12 month basis and has approximately 950 employees with the majority of them residing in Research and Development.

The transaction is expected to close in early Q2 FY13 and is expected to be accretive to Non-GAAP earnings by the 2^nd half of FY13. We are not disclosing the terms of the transaction. This transaction is consistent with our strategy of enhancing solutions for our customers and improving the long-term financial profile of our business.

You can listen to a replay of the webcast with Dell executives discussing the acquisition and access related material here.

We look forward to your thoughts and feedback.

Conversation with Brad Anderson, President of Dell’s Enterprise Solutions Group

David Mehok — Mon, 27 Feb 2012 18:25:00 GMT

Today Dell announced the launch of new and enhanced enterprise solutions that provide our customers an end-to-end IT platform focused on simplified management, increased performance and superior long-term value. Brad Anderson, President of our Enterprise Solutions Group, joined us on DellShares to discuss today’s announcement. We invite you to listen to Brad as he provides perspective on the following:

· How these solutions help Dell win in the competitive marketplace

· Specifics around the launch of Dell’s 12G server line

· The enhancements of Dell’s EqualLogic storage solutions

· The concept of “better together” in regard to our Enterprise solutions

Thanks and we look forward to your thoughts and feedback.

(Please visit the site to view this video)

Dell Acquires AppAssure

David Mehok — Fri, 24 Feb 2012 12:06:00 GMT

Today Dell announced the acquisition of AppAssure, a global leader in complete application protection for virtual, physical and cloud infrastructures.

This acquisition is clearly aligned with our strategy of finding best-in-class technologies in rapidly growing areas of our business. Dell can accelerate profitable growth of AppAssure solutions through the distribution, scale and financial strength that we provide. Some key points that align with this strategy and provide more context on AppAssure’s solutions set are as follows:

According to IDC, the data protection and recovery industry is projected to grow 7% a year through 2015. Cloud based solutions such as AppAssure’s are projected to grow at a premium to this
AppAssure solutions protect the entire application stack and can move between virtual and physical environments with cross platform recovery
Performs server backup and recovery 12 times faster than traditional backup solutions
The AppAssure solutions are designed for ease of use and management, aligning well with Dell’s mid-market design focus

See Darren’s post on Direct2Dell for more information. We are not disclosing the terms of this transaction but look forward to your thoughts and feedback.

Dell President and Chief Commercial Officer Steve Felice and Senior Vice President and CFO Brian Gladden Discuss Dell’s Q4 Fiscal Year 2012 Performance

Robert L Williams — Tue, 21 Feb 2012 21:02:00 GMT

Joining us on DellShares this quarter, we have Steve Felice, President & Chief Commercial Officer, and Brian Gladden, Chief Financial Officer, giving us their perspective on the fourth quarter and discussing the progress we’ve made in executing on our overall strategy.

Fiscal Year 2012 Q4 and full year highlights include:

Revenue of $62.1 billion for the fiscal year, $16 billion in Q4
Record enterprise solutions and services revenue of $18.6 billion for fiscal year, $4.9 billion in Q4
Cash flow from operations of $5.5 billion for fiscal year, $1.8 billion in Q4

We strongly encourage you to review our press release and associated materials, including our GAAP to non-GAAP reconciliation; and listen to our earnings conference call which can be found on the Investor Relations web site.

(Please visit the site to view this video)

We have attached a transcript for those of you unable to watch the video or just have a preference to read it.

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

Special Note on Forward Looking Statements:

Statements in this blog that relate to future results and events (including statements about Dell’s future financial and operating performance, trends relating to enterprise, solutions and services, anticipated customer demand, global macroeconomic uncertainty, and geographic trends, as well as the financial guidance with respect to revenue, cash flow from operations, net income and non-GAAP earnings per share) are forward-looking statements and are based on Dell's current expectations. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “confidence,” “may,” “plan,” “potential,” “should,” “will” and “would,” or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including: intense competition; Dell’s cost-cutting measures; Dell’s ability to effectively manage the growth of its distribution capabilities and add to its product and services offerings; Dell’s ability to effectively manage periodic product and services transitions; weak global economic conditions and instability in financial markets; Dell’s ability to generate substantial non-U.S. net revenue; weak economic conditions and additional regulation affecting Dell’s financial services activities; Dell’s ability to achieve favorable pricing from its vendors; Dell’s ability to deliver consistent quality products and services; Dell’s reliance on third-party suppliers for product components, including reliance on several single-sourced or limited-sourced suppliers; successful implementation of Dell’s acquisition strategy; Dell’s product, customer, and geographic sales mix, and seasonal sales trends; access to the capital markets by Dell or its customers; loss of government contracts; the risk of temporary suspension or debarment from contracting with U.S. federal, state and local governments as a result of settlements of an SEC investigation by Dell and Dell’s Chairman and CEO; customer terminations of or pricing changes in services contracts, or Dell’s failure to perform as it anticipates at the time it enters into services contracts; Dell’s ability to obtain licenses to intellectual property developed by others on commercially reasonable and competitive terms; information technology and manufacturing infrastructure disruptions or breaches of data security; Dell’s ability to hedge effectively its exposure to fluctuations in foreign currency exchange rates and interest rates; counterparty default; unfavorable results of legal proceedings; expiration of tax holidays or favorable tax rate structures, or unfavorable outcomes in tax audits and other compliance matters; Dell’s ability to attract, retain, and motivate key personnel; Dell’s ability to maintain strong internal controls; changing environmental and safety laws; the effect of armed hostilities, terrorism, natural disasters, and public health issues; and other risks and uncertainties discussed in Dell’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for its fiscal year ended Jan. 28, 2011. In particular, Dell’s expectations with regard to revenue, cash flow from operations, net income and non-GAAP earnings per share for the full fiscal year ending Feb. 1, 2013 assume, among other matters, that there is no significant decline in economic conditions generally or demand growth specifically, that macroeconomic uncertainties do not materialize into significant economic difficulties, no significant change in product mix patterns, continued geographic customer demand trends, continued successful demand planning and forecasting, no supply chain disruptions, and no significant adverse component pricing or supply movements. Dell assumes no obligation to update its forward-looking statements. Consolidated statements of income, financial position and cash flows and other financial data follow. Dell is a trademark of Dell Inc. Dell disclaims any proprietary interest in the marks and names of others.

Engaging with the SRI Community

David Lear, Executive Director—Sustainability — Tue, 14 Feb 2012 15:50:00 GMT

Dell continues to look for ways to increase our engagement with the broad investor community. For many years, we have recognized the growing number of social investors, sometimes referred to as, Socially Responsibility Investors (SRIs), who include “non-traditional” vectors such as Environment and Social Governance when they evaluate the full value and risks associated with a company’s long-term performance.

In 2008, Dell began engaging the SRIs by offering, in addition to our regular investor call, an expanded call that covered both the financials and Dell’s efforts on environmental responsibility.

In 2009, we began sponsoring SRI in the Rockies, an annual conference dedicated to the global community of SRI researchers, investors and investment channels. This included a panel where our Director of Investor Relations, Robert Williams, spoke about our commitment to Corporate Responsibility and Stakeholder Engagement.

In 2010, we changed the format of our SRI calls and made them interactive, adding two SRIs to the agenda, offering them the chance to address Dell executives on a topic of their choice such as Say on Pay, and Gender.

In 2011, we took our engagement on the road, where I joined David Mehok, Executive Director of Investor Relations, and Deborah Albers, Principle Social Strategist, on a three day tour to meet with six influential SRI teams in New York, Boston and Washington D.C. These meetings included an update on financials by David Mehok, but were followed by detailed discussions around Dell’s efforts in environment, social and supply chain responsibility, led by Deborah Albers and myself. Meeting our SRI partners in this, face-to-face format, created a more open and insightful dialogue on the topics. The discussions ranged from product design features to managing the risks in the supply chain, and gave Dell the opportunity to promote our leadership in the areas of: Energy, Packaging, Recycling and Supply Chain Responsibility.

We are already planning our 2012 SRI engagements and look forward to hearing any ideas and suggestions to refine and optimize our engagements.

Photo Credit: http://thenewpioneers.biz/2011/02/09/socially-responsible-investing-a-big-step-forward-or-a-waste-of-time/

Mid-Market Design Focus

Robert L Williams — Wed, 01 Feb 2012 20:21:00 GMT

One differentiator we talk about Dell having is our mid-market design focus. The mid-market is the largest and fastest growing portion of a ~$2.7 trillion IT industry. It’s more than 60% of the IT industry and approximately 75% of the commercial IT industry. The mid-market includes customers from parts of our Medium and Large Businesses as well as Public customers in Health Care and Education. A mid-market design focus doesn’t mean we are bypassing other parts of the market. In fact, we believe that our mid-market design focus enables us to better serve the needs of our largest and smallest customers. Innovation has historically happened in the mid-market space – examples include x86 servers, iSCSI, virtualization, cloud and social commerce - they all started in small and medium and they migrate to large, and eventually to global. We’ve found it is much easier to scale up and down with a simple mid-market solution rather than pushing down and under-featuring a complex solution.

Some examples of our mid-market design focus include vStart, KACE and our PowerEdge C servers. vStart is a fully integrated system that simplifies virtualization by including servers, storage, networking, management tools and deployment services in one preassembled, validated solution. We offer it in various increments ranging from 50 to 200 virtual machines and the result has simplified virtualization for our customers. Another example of mid-market design focus is KACE. KACE is a leading systems management company tailored to the requirements of midsized businesses. By incorporating the mid-market designed offerings into our distribution and sales capabilities we’ve been able to grow KACE revenues more than 8x since being acquired by Dell in 2010. Finally, in the hyperscale market where Dell is a worldwide leader, we’ve launched our PowerEdge C servers that provide maximum density for scale out data centers. Those servers are right sized to provide Web 2.0 building blocks to mid-market customers while minimizing their total cost of ownership.

Dell maintains a point of view which also uniquely positions us in this space and complements our mid-market design focus. Our view is one of customer choice and customer driven solutions incorporating open standards that are scalable and affordable. Competitors have gone to a closed, proprietary approach before and the pendulum will always swing back to open solutions – the industry has been going that way for the past 20 years, and is unlikely to change. We understand our customers have already invested in their infrastructure and they don’t want to underutilize previous investments. They are looking for solutions that can leverage their existing environment.

As we invest organically and in-organically we will continue to hold to our mid-market design focus and we believe it differentiates us from our competition. As always, we welcome your comments.