Dell Sales Kickoff: Michael Dell Pushing Sales Force To Land New Customers As EMC Merger Grows Near

The Next Era Of Dell Nears

Dell's $67 billion acquisition of EMC is moving "full steam ahead," and CEO Michael Dell is anticipating huge sales opportunities to spring from the $80 billion combined business.

Dell seemed to be especially enthusiastic about the prospects for new customer acquisition and the traction gained by EMC's Pivotal unit. He also said that as the IT industry continues to consolidate, Dell will be in a good position to acquire still more companies. Dell made his remarks during the company's annual sales kickoff in Las Vegas earlier this week.

Sales growth will be fueled by more than $4 billion in annual R&D spending Dell envisions for the combined Dell-EMC, as well as a deep portfolio of products positioned to serve customers across wide swaths of the market, Dell said.

The seminar is known as the Field Readiness Seminar, and portions of Dell's presentation to the company's sales force was filed recently with the U.S. Securities and Exchange Commission by Denali Holding, the holding company for Dell Inc. What follows is an edited excerpt of Dell's remarks.

Direct Drive For 'A Whole Lot More New Customers'

"We've made big investments in our sales force, particularly our direct sales force, adding almost 2,000 new sales makers to get ready for this year," Dell said. "Now what I want to see this year is a whole lot more new customers and new LOB [line of business] acquisition, particularly through our direct channel. We want to achieve No. 1 in mainstream servers, even as we continue to build out our enterprise solutions. And we have every opportunity to do that."

EMC Deal 'Absolutely Moving Forward'

Like EMC Chairman and CEO Joe Tucci, who sought to reassure investors about the Dell-EMC merger earlier this week, Dell told his sales force the deal is on track.

"You may have read a story that questions if this deal is going to happen. If you have, you're wasting your time," Dell said. "There's going to be those kind of stories, just like there were during the privatization. Do you all remember when we were going private there were all kinds of stories and they basically turned out to be nonsense? So don't waste your time with that. We're absolutely moving forward with the transaction under the original timeline, the original terms, at full steam ahead. And it's not contingent on the share price of EMC or VMware. It is subject to a shareholder vote and regulatory approvals. But, we expect to close in the same time frame that we announced before, May to October."

Praise For Pivotal

Dell singled out EMC's Pivotal cloud platform business for attention, calling it "one of the most interesting companies within the EMC family." Pivotal, he said, "is one of the best third platform companies in our industry. By third platform we're talking about cloud, and cloud-native. Pivotal has something called Cloud Foundry, which is a platform on which cloud-native applications are developed and they can be deployed on-premise or off-premise. It creates a kind of cloud neutrality that allows applications to move across multiple types of infrastructure. And Pivotal is also changing the way the world builds software and the way large companies are able to respond to the fast-changing market that we find ourselves in."

Even More Praise For Pivotal

Dell is especially optimistic about the traction Pivotal's Cloud Foundry platform has gained in the market, even among Dell's competing vendors.

"Cloud Foundry has already been adopted aggressively by leading companies like General Electric, Ford, Home Depot ... Daimler, Mercedes, All State, Humana, Comcast and many more. And interestingly, Cloud Foundry is a platform that even others in our industry are basing their cloud businesses on -- IBM, Cisco, HP, SAP, Intel, Accenture, Verizon, all [are] embracing Cloud Foundry," Dell said. "Pivotal is an incredible, amazing company with tremendous innovations. It may be the best cloud-native development platform in the industry. There's a lot to get excited about as you start to learn more about our acquisition."

Dell Will Support And Enhance All Existing Product Lines

"I've also heard about some of the concerns and I want to address those head on. First, we're going to continue to support and enhance all of our existing products and solutions," Dell said. "And while there's very little overlap between Dell and EMC, there is some. And so I want to talk about that. Compellent and EqualLogic are great examples; the SC Series is doing very well. And it is positioned actually somewhat differently than the current EMC offerings. And, by the way, the SC Series is also growing about 20 percent per year. So well done to our teams on that. And did you know that in the five years since we acquired Compellent we have grown the number of customers five times and the number of installed systems by 10 times? And we're only going to grow from here. We have a great vision for how the SC Series is a key part of the combined storage portfolio with EMC."

Dell 'Well Positioned To Be A Consolidator'

Dell said he expects digital transformation among customers, and the push for greater efficiency among vendors, will necessitate more consolidation within the IT industry. Dell, he said, "is very well positioned to be a consolidator."

For now, the key piece of consolidation for Dell is the EMC acquisition. "With the combination of Dell, EMC and VMware, we will be a leader in the technology of today with some of the world's greatest and strongest franchises in technologies like servers, storage, virtualization, cloud software and PCs," Dell said. "We'll also have a very strong position in the technology of tomorrow, with leadership in key strategic areas like the digital transformation, software-defined data center, converged and hyper-converged infrastructure, hybrid cloud, mobility and security."

The Commercial Client Challenge

Dell said the company didn't meet sales expectations in its North American commercial client business, but he said the company has calculated that it's counterproductive to get into Chromebooks.

"Does anybody know why we want to grow commercial share without Chromebooks?" Dell asked. "Margins. Profit. You got it. If we had 100 percent share in Chromebooks, how much would our profit sharing or bonus be? Zero. No profit, no fun. So it's commercial client without Chromebooks, and this is an area where I need your help in FY 17."

Gauging Customer Sentiment

"I've been out meeting a lot of customers, spending time with them and talking to them" about the EMC merger, Dell said, adding that those customer conversations tend to revolve around a few key themes. "The first one is that customers and partners are very positive on the acquisition. The second is there's tremendous interest in the combined innovations of Dell, EMC and VMware. And customers are interested to know how are we going to combine all this great technology together and bring them new solutions. It's actually an opportunity for you right now to get in front of your customers. Customers also love that we're bringing together all the pieces of their infrastructure in one company."

The Huge Prospect Opportunity

Another theme that Dell recognized in his conversations with customers is that non-customers are very interested to consider Dell now that the merger is in play.

"It's a huge opportunity for all of you to get in front of our customers and even prospects right now, selling what we have today, and soon, maybe you've figured this out, we're going to have a whole lot more things to sell," he said. "And we're positioning Dell to be the leading infrastructure company for the next 20 years, and to be 100 percent clear, when I talk about technology infrastructure, that includes PCs and IoT, which remain incredibly important to our customers and to Dell."

Expansion In Every Sector

"If you step back and look at the world today, the role that technology plays in every aspect of our world has never been greater and yet it's really just kind of beginning," Dell said. "For our customers to be competitive and to win and to reach their objectives, they're going to increasingly be relying on technology and for us that means huge opportunities. There's an absolute expansion and an explosion in the number of devices. And that's creating opportunities to transform every sector from education to health care to manufacturing, finance, energy, services, even government."

'A Thousand Times A Thousand Times A Thousand'

Here's how Dell sees the expanding market for IT: "If you think about the number of devices, there are about 8 billion connected devices right now. But it's not that hard to see how you would have like 50 billion connected devices with the cost of putting intelligence in a device approaching a very, very small number, in many cases. And then, if you look beyond the horizon, it's not that hard to imagine like a trillion connected devices. So you have this condition where you have like a thousand times more devices. And then the devices are doing many more things, you have like a thousand times more applications, and then, of course, you have a thousand times more data. So it's a thousand times a thousand times a thousand, very big numbers. And the infrastructure required to support all that over the next three, five and 10 years will dwarf anything that exists today."

An Expanding Storage Family

Dell continued to argue that there's very little overlap between Dell and EMC, reiterating that everything the company sells today will be fully supported going forward.

"EMC has maybe seven main storage families. They have every imaginable type and variety you could think of. But, together we're even stronger. And if you think forward to the second half of this year with EMC we'll be a leader in every area of storage from primary to data protection, to scale-out, to NAS, to unstructured data, to direct-attach, to all-flash, to software-defined. … And, by the way, it's all best of breed, leading in every category. So today we also have great offerings in hybrid cloud. And we're going to continue to invest and support those, and our hybrid cloud capabilities will only get better after the acquisition. So look, whether it's OptiPlex or Latitude, Precision, or VDI, 13G Servers, Compellent SC, converged infrastructure, hybrid cloud, I want you all out there selling with confidence. There are always going to be new offerings. And there will be new offerings after we combine with EMC. But, we're going to fully support everything that you're selling today and winning with today."