Houston Chronicle

BOOTS AND BYTES

Michael Dell says more tech companies will be moving to Texas

- By Dwight Silverman STAFF WRITER

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 away 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

“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.”

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 one-size-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 high-profile individual­s are relocating from California and Silicon Valley to Texas. We’ve had 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.

Q: What kind of innovation­s do you see coming to both business and consumer PCs in the next year or so?

A: I think we can look forward to 5G-connected machines and multi-screen devices. We can look forward to continuing to improve performanc­e and mobility and making webcams better.

We have lots of new products coming. We’ll have a pretty active first quarter of new announceme­nts.

Q: And speaking of innovation­s: What was your reaction to Apple’s ARM-based processor, the M1, that it put in some notebooks and the Mac mini desktop? Essentiall­y they’re walking away from Intel, which they’ve used for a long time.

A: Well it wasn’t surprising, because I think it had been signaled for quite some time.

The microproce­ssor war, there are lots of different elements to it. You got the semiconduc­tor technology itself with multiple competitor­s. And obviously we work with both Intel and AMD.

For Mac users, I understand there are a number of compatibil­ity issues in the transition. But the good news is there’s a high level of innovation going on (in processors) and we’ll use all of those in creating new products.

“We’re certainly focused on diversity, equity and inclusion and have made progress at many levels inside the company.”

Q: Do you see yourself doing any ARM-based PCs? After all, Microsoft sells ARM-based Surface laptops, alongside its Intel models.

A: Again, it goes back to software and compatibil­ity. We’ve created ARM-based servers for specific customers in the data center, certainly there are ARM microproce­ssors throughout all kinds of things. Just creating an ARM-based PC, yeah, that’s pretty easy. Could we do it? Yeah, we can do it. Do people actually want it and is it a good product? That’s a whole different problem. When we can create a great product that people will love, we’ll absolutely do it.

Q: One of the really interestin­g things about you is that you’ve worked at Dell for a long time. At other companies the founders typically don’t stick around as long as you have. Why has it worked with Dell where it hasn’t worked with a lot of other companies?

A: I can’t tell you why it didn’t work at other companies. I’ve always been inspired by technology and the role it can have in the economy and in human transforma­tion. I’m inspired by everything our customers are doing with technology.

And to me, it’s been, it’s been a great adventure for 36 years and it continues to be. We have a fantastic team team and the work that we’re doing has never been more important. We have an opportunit­y to tackle big issues and I love what I do.

Q: All of your top leadership team is white. What are you doing to improve the inclusivit­y and diversity at the management level?

A: Yeah, I see it. We’ve made some progress there. We’re certainly focused on diversity, equity and inclusion and have made progress at many levels inside the company. We’ve been a leader in employee resource groups and making sure everybody feels included and valued inside the business.

And when I looked to the success of generation­s of team members that we’re bringing into the company, it is quite a bit more diverse. And the good news is that the aperture is, is opening and we’re attracting a much more diverse workforce that ultimately will be the future leaders of the company.

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 ?? Elizabeth Conley / Staff photograph­er ?? Michael Dell has led his company for 36 years — since its founding in his UT dorm.
Elizabeth Conley / Staff photograph­er Michael Dell has led his company for 36 years — since its founding in his UT dorm.
 ?? Austin American-Statesman file photo ?? Michael Dell, who grew up in Houston, lives with his wife Susan in Austin. They have four children.
Austin American-Statesman file photo Michael Dell, who grew up in Houston, lives with his wife Susan in Austin. They have four children.
 ?? Associated Press file photo ?? In this 1999 photo, Michael Dell sits in Room 2713 in Dobie Hall, a private dorm at the University of Texas, where his computer wizardry took flight.
Associated Press file photo In this 1999 photo, Michael Dell sits in Room 2713 in Dobie Hall, a private dorm at the University of Texas, where his computer wizardry took flight.
 ?? Elizabeth Conley / Staff photograph­er ?? The everything-from-home trend has been a boon for Michael Dell’s company, which brought in $92.2 billion in fiscal year 2020.
Elizabeth Conley / Staff photograph­er The everything-from-home trend has been a boon for Michael Dell’s company, which brought in $92.2 billion in fiscal year 2020.

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