San Antonio Express-News (Sunday)
TEXAS TECH
Dell on pandemic changes, tech’s interest in the Lone Star State
It has been 36 years since Michael Dell started the company that bears his name in Room 2713 in Dobie Hall, a private dorm just steps from the University of Texas at Austin campus. Amazingly, he is still its chief executive, a rare feat in his industry.
Today, Dell is a Fortune 500 company with 165,000 employees that has been a public company, then a private company, and now is public again. It had revenues of $92.2 billion in fiscal year 2020, and provides products and/or services to 99 percent of the Fortune 500.
As have many chief executives, Dell has had to steer his ship through uncharted waters in the plague year. In this interview, he talks about how the company has adapted during the pandemic and even benefited as demand for technology products needed to work and learn from home peaked.
He has also watched — and counseled — as tech companies consider and act on plans to leave California for Texas.
This interview has been edited
for length and clarity.
Q: How has the coronavirus pandemic affected Dell as a company? What changes have you had to make, and do you see those changes sticking once we get back to some semblance of normal?
A: Like all organizations, obviously we took a number of steps to make sure our people were safe. And we reached out to our customers to understand how we could help them, and took a number of steps to protect our business and all the people inside the business.
That worked well. We already had inside Dell a flexible work culture that had been part of our operating model for more than a decade. So when it came time to work from home, we were ready and it worked pretty smoothly.
We’ve learned that remote work works really well for many things. You used to leave your house to go to work or to school, or to be entertained or to the gym. Now, those things come to you at your house. Technology is an integral part of that. I don’t think it’s going to go back to the way it was. There’s been an acceleration of digital efforts across all organizations.
We’re going to have a kind of hybrid work style where work is something you do, it’s not a place. Yes, there will be offices, but I think that the nature of offices will change depending on the company and what kind of work they’re actually doing.
Q: How has the pandemic changed the services and the products you offer customers, and how easy was it to develop those under these circumstances?
A: The product innovation engine continued in a very strong
way. This last year we had a tremendous number of new introductions; 5G is a big topic.
I think everyone realizes the importance of connectivity, and we’ve been very involved in it. Not just creating the first 5Genabled notebooks, but building out the 5G ecosystem. Our technology is this desegregation of the hardware and software, which means that a lot of the functions that run inside a carrier’s network become applications that are virtualized and can run in standard server technology. We’ve been helping a lot of the carriers in building out their 5G networks.
Our PC business has certainly shifted to respond aggressively to the whole everything-from-home demand condition, and we’ve been ramping up capacity. Let’s say you have two parents and two kids, just to keep it relatively simple. In the past you might’ve gotten by with one or two computers, but now, if the kids are learning online and the parents are working online, you’re gonna need one per person.
Q: The PC business has had a banner year because of the pandemic after years of it flagging. Notebooks have taken off, but what is the fate of desktops? Have they also fared well, or are they kind of fading away?
A: There’s definitely been a shift to notebooks. The desktops haven’t gone away. It’s not onesize-fits-all.
People have figured out, “OK, I’ve got a notebook, but you know, I haven’t really replicated the office work environment I had before, because my screen’s not big enough. I like a docking station, I want a second display, a larger display.” People are building out their home offices, but in many cases they go way beyond what they had at the office.
Q: What about in terms of the enterprise and the server end? What changes have you seen in the services and the products that businesses want with distributed workers, which may continue for awhile?
A: What’s occurred inside organizations is a reprioritization of their spending. (Setting up employees for) securely working from home went to the top of the list in many cases. Other projects were delayed or deferred.
What business leaders figured out was that the only thing that really worked during the last 10 months or so was technology and the digital connectivity they have inside their business. They want more of that. They’re investing in that. And, of course, that requires continuing to build out the infrastructure capabilities inside businesses.
When we entered into this back in late February and early March, we didn’t think it was going to end as well as it has, relative to our business. I think
that just shows the critical importance of digital technology in keeping the world operating and running.
Q: More companies and highprofile individuals are relocating from California and Silicon Valley to Texas. HPE set up shop in Houston. Oracle’s moving to Austin. Elon Musk is now living in Texas. Some of these companies are competitors of yours. What do you see happening here? Is this the beginning of a bigger migration?
A: For as long as people have been around, people have moved from one place to another to seek greater opportunity or a better life. I think Texas has always been a great place and particularly a great place to grow a business.
A number of these leaders have called and asked me, “Hey, I hear how great Texas is for business. Is it really true?” And I tell them it is. We do business all over the world. Texas is our home and our headquarters and it’s where I was born, over there in Houston.
It’s a friendly place for business. And I think that’s attracted more and more businesses over time. Based on conversations that I’ve had, I would not be surprised if there are quite a few more leading global companies that move to Texas in 2021.
Q: If more are coming, do you see any potential changes to Texas? If a bunch of tech companies come here, what will Texas be like in 20 years?
A: Well, it’s certainly different
now than it was 20 or 30 years ago. And I think it’ll continue to change. You’ve got a strong education system and great universities. There are 150,000-plus students within a 100-mile radius of Austin, which makes it very attractive for tech companies that are growing.
A lot of these companies already had a presence in Texas.
It’s not an unfamiliar environment to them. Texas has been an entrepreneurial, growth-oriented place that has allowed people and organizations to grow and thrive for quite some time. I hear from people who moved to Texas, “Wow, everybody’s so positive and friendly and optimistic.” That’s been my experience, too.