 Live from Las Vegas, it's theCUBE. Covering Dell Technologies World 2019. Brought to you by Dell Technologies and its ecosystem partners. Hello everyone, welcome back to theCUBE's live coverage here in Las Vegas. We are here for Dell Technology Worlds 2019. We've got two sets. I'm John Furrier, Dave Vellante, my co-host. Dave, day two, three days of wall-to-wall coverage. We've got a great guest here, Sam Bird, the president of Client Solutions Group at Dell Technologies. Sam handles all of the big edge machines, like the PCs, my machine here, and all the cool stuff. Sam, thanks for joining us today. Appreciate it. Thank you guys for having me. So one of the themes that we're seeing obviously through the transformation going back, when Michael went private, buys EMC, new puzzle pieces, this is growing and scaling. And one of the big surprises, or not surprises, is the cloud growth and the data growth has been fueling a lot of existing businesses. The client business, one of them that you run, is doing extremely well. The numbers are looking good. New machines, the PC revolution continues evolving. What's the state of the art? What's the current state of the business? Give us an update. Hey, so like you said, the business is doing really well. I'm excited. This year we'll have our 35th birthday for Dell and the PC business, the business I lead at Dell, is where it all started 35 years ago in a dorm room at University of Texas. Now a $43 billion business. It is just a part of Dell, so we've become a lot more, but growing double digits, we've seen a resurgence in the edge. And I think like you said, one of the things I'm seeing as I talk to companies, they're almost seeing the edge as the secret weapon as we talk about all this transformation because getting great employees is the challenge if you want your business to lead in an industry. And as we go talk to companies, and we talk to Gen X folks, we talk to millennials, we talk to Gen Z, getting them armed with a great piece of technology where they can be productive in a job and help make a difference in a company or career. That's what they want to go and do. They want that more than drinks in the break room. They want that more than volleyball courts outside. And when companies are able to do that with our PC products at the edge, they get great people in who help that company be more successful. So we're seeing really good growth and we're dedicated to doing some exciting products for people. And it's not easy too. I just want to unpack the dynamics between the two worlds that go on. One is making the machines go faster, smaller, less expensive, so more horsepower, lower prices, higher functional. And then the integration to get that kind of seamless work lifestyle balance where you got consumer, business, all kind of blending together where you got to connect to networks. You got to work a Starbucks here in once in a while. You got to have all this stuff working together with what used to be the big iron back end systems. So you got two jobs. Take us through. How do you balance that? Are there different teams or different approaches? What's the focus? You know, we look at a couple of things. Internally, we have really focused on not just the hardware design that we're putting together in the speeds and feeds. And we can do that great. You take our, you know, our gaming business. We have a, we were showing off in the alien, you can go over to a Alienware kind of gaming section we have here. We have things that have more than 300 watts of power for CPUs and graphics in. It feels to us, if you went back in time, it's super compact about what you used to have. It's not anything like the latest XPS products I see you guys using there, but we can design that kind of power into the systems. And then we're focused on the experience we bring alive for people. So you think about working with partners, I'm working with services teams, working with Microsoft, working with VMware around how we bring alive the things people want to do. On the consumer side, like one thing we've seen, more people now watch TV on PCs than watch TV on TVs. Totally, yeah. It's like, it's a great experience. It's putting the headphones and nobody's bothering you. It's pretty good. The other thing that's interesting, I've switched all my viewing that way because we figured out the younger generations that is even more true for them. So in my millennial or Gen Z fashion, I've started 100% of my TV viewing on a PC, but it's a great way to do it. We've designed experience around that with audio, video, streaming, that we go, how do we bring that alive? Same thing on gaming space. I want to show you guys, hopefully in a couple of minutes, we can talk about some of the latitudes we announced here, but we've done that in the work space of, people want to be productive immediately. They want a tool that lets them do that. And we said, how do we put technology and software and capability together to allow them to have that kind of experience? They want that. What are some of the things you announced today and what are the exciting parts of them? So we announced our new latitude lineup. So you see from top to bottom some really amazing looking PCs. And one of the things, if you guys get that little higher, what do you guys get? You guys see that? So awesome looking PC. The other thing is if you take a look at this, we built in different kind of capabilities that allow really fast login to the system. So there's an express login, express sign in capability that under kind of infrared lights, sensors, you can basically recognize, it recognizes when you walk up to that system, it will log you into the system automatically. So you don't have to touch the screen, the keyboard at all, saves you that kind of instant productivity. You turn around, walk away. It'll sense when you're there and when you're not there, will log you out of the system. We also have something we call express sign, express charge on this system. So people are on the go. Some of the stats we were sharing when you think about audience here, people are working in different offices, people are working on the road. John, you were saying people are working in Starbucks. How do we allow you to quickly, you plug that in, you can get 80% charge in an hour, you can get 35% charge in 20 minutes. So allow you to get up and going really quickly. But basically designing some pretty awesome systems that if you go look at what some of the press is saying about this stuff, of finally putting a business system in people's hands that users are going to covet. So we did cool stuff with Alienware. We've done that with our XPS product. We said, we need to bring that into the commercial space so people have really cool tools to use. And you guys are getting great reviews just to give a little shout out and props to you guys, getting some good reviews. Also, it's a good tailwind for you that Apple's kind of struggling with their MacBooks when the prices are high. People are now coming back and looking at the PC. In fact, my son is a big time gamer. He'd appreciate it. The acronym is called PCMR, which stands for PC Master Race. Because the gamers like to be hardcore on the PC gaming. Huge growth area. Alienware is doing great. But people look at whether it's gamer or work. You're seeing, the gamers are kind of I think a canary in the coal mine. They're I think a leading indicator of a trend around, I want a relationship with my device. And I want to be able to have things available, whether it's mobile or PC or gaming. So it's a little bit more intimacy. And then there's also a pressure we're seeing on the trend line around augmented reality built into the machine. So you're starting to see, again, better monitors for K connections, better immersive, either whether it's single sign on, authentication to just overall experience. That's a big trend. Yeah, and I think you said it on gaming. We've built a community around our Alienware brand. We've built entry level gaming systems. We've turned gaming that we've been in for 23 years with Alienware. Now a $3 billion business inside our Dell PC business. And there's a lot of affinity for people who go in, hey, turn out awesome powered systems and deliver me a kind of experience and speed that I want to win in the game. You know, it's the same thing though on the commercial side of going, people want tools when they're coming to work, don't let them do a great job in their business. I know Dave wants to ask a question, but I want to get one more thing out. PC, people talk about a lot of people don't want to hear about speeds and fees. When it comes to machines, people want to hear speeds and feeds. How many cores? Is there a graphics accelerator in there? Is there a GPU? I need to get AI. What's going on with the inside the specs? Give us the latest state of the art. Oh, we have like, so you can look at core explosion in PCs is great. The thing that I really like is all these systems now you see USB connectivity. So you can put your people before we're going, hey, the display is going away. So you walk around, see, we have 49 inch curve displays. We have huge 43 inch displays. You can get four displays side by side. You can get two 27 inch displays side by side. I go to trading floors around the world. They're stacking two and three of these displays next to each other. You can power that out coming out of the USB port on your system. You can power that with the graphics on the system. And then we have everything up to go to Alienware, which is huge core counts, but the power, the watts, we literally have two huge power supplies, two 300 watt power supplies that you're plugging into the back of our gaming desktops. It will almost consume the 15 amps that you have in your house circuit to power that system. And we fit that in a, you know, it's about an eight pound system today that's maybe an inch and inch and a bit thick. That if you go back to legacy PCs, we're talking about we're almost a 2020 and a new decade. If you go back to the start of this decade, that was like running the middle average PC that we're now fitting incredible power into. So I think all that And GPUs are rocking. What's the status on graphics processors? This has become a big part of it. The latest ray tracing graphics processors that we're now waiting, the thing that's exciting to me is on the games, I think we'll see games now catch up to 2000 series GPUs. Explain the ray tracing. I think it's an important innovation because that's going to really come in and help the game. But also it's starting to bleed into some other creative areas. We're ready to get you stocked up with some Alienware here walking out of the system. I'm waiting for a display, the curved display. John's excited. I want the curved display. No, we see it in games. We also see it in advertising. So it's amazing the stuff you can go and do of say render a vehicle in a photo shoot that you used to have to go to a remote location. And basically ray tracing allows you to render that scene by putting individual beams of light into the interact with all the geometry that you have. And it shows what it'll basically draw that picture for you. So you get all kinds of nuances of shadows, other images, flickers and reflections that are just amazing and lifelike realism. So we're going to see that in games. You see graphics designers doing that in TV commercials and in print ads. And you do it without ever having to touch the physical product, which it's hugely time and processor compute, graphics intensive to go and do that. But you're now seeing us able to do that on a, if I brought in a precision workstation, it's a little bit bigger than this. And it's a great tool. That's because it's a horse tower on the machines can handle that ray tracing. That's the whole point. Yes. You guys are connecting the edge with your laptops, your PCs. What are you doing to stress test them in the edge? Torture test. Do you want any fun stuff? Dropping them from the building and throwing flames at them. Yeah, we have some fun labs. So in Austin, Texas, we have a lot of fun, whether it's dropping systems, which is not unrealistic of what happens in the environment. We actually find our hardest users are students in education environments. So we've commercial, really important because like the XPS I see you guys are using, people will take a little bit better care of the stuff when it's their own dollars that went to that, but the work system gets thrown in a bag, it gets thrown in the back of the car. So you look at temperature testing, cold, hot, drops, water, coffee in the office environment, water in the office environment that gets thrown against it. So we do all that kinds of stuff, but we've learned a lot from students and we do things like little micro drop tests because you had literally, we had systems that got not banged against the floor, but the slammed in a bag by a student thousands of times across the life cycle that we had to go and change how we engineer some of the connectors and how the systems are set up just to make them really durable. So I wonder if we can talk about your business a little bit. John knows I love to get into the business and I want to explore the importance of the client business to Dell. It's about half of your revenue, just a little under a half of the revenue, obviously lower margin than some of the enterprise businesses, but it's critical. I mean it's what the company was founded on, it absorbs a lot of the corporate overhead, it's growing, what's going on in the business, units, dollars, what can you share with us? Yeah, so $43 billion business grew double digits last year. We had for the last five quarters we've led the industry in growth, which is a reflection of our real focus on what customers are looking for and delivering great products to them. We have 25 quarters of gaining share, 25 consecutive quarters, so we have a really good run going in the business. When we look at this year, I see the industry continues to consolidate. Top three players in our industry are around less than 65% share, kind of 63 in change, and in most industries you see them, as they become more mature, you see them more consolidated than where we are today. It's been consolidating, last six years we've gained 600 basis points of share. We think as Michael and our team have invested in great designs and great experiences to customers, there's lots of runway to continue growth here. And that's what we're, the thing that gets me excited in our engineers is turning out products that our customers go and love. And as we went private and really began to transform this company, we said we want to be the best bar, no one in this industry. And we've really, you see that in Alienware, you see that in XPS, you see that what we're doing in the latitude space, we continue to set a very high bar for ourselves. And the growth, so people tend to keep their laptops longer. You got to sell these cloud apps and it's great as a user. You have to replace your laptop every 15 months. I'm sure you'd love us to do that. But so where's the growth coming from? Is it new applications? Is it obviously share gains and how will it continue? Yeah, well we see it more, the premium space is growing a lot where people have said, hey, I want to trade up, whether that's the gamer like your son, a user on XPS who wants a really mobile system that they can throw in their backpack or throw in their purse and take with them. It's interesting in the commercial space, we actually see some of the highest end systems that we sell in our workstation business have the fastest turnover and change rate because when you can add more cores, more horsepower to that and go, my expensive engineer designing airplanes or my graphics designer doing advertisements or videos for the company can now be more productive, people go, I want to spend the $3,000 because in comparison to the salary and the time I'm saving, I'll get the best talent, they're happier because it gets done faster and my business gets more done, that's where they're actually switching the systems over. So it's to us to make that easier. And then the other thing that we're doing that's really interesting and that we announced this week is we're working across our businesses. So we've gotten out of just the, look at the hardware, but we're going, how do I partner with the services business? How do I partner with VMware and start to make the whole process of getting technology and users' hands easier? Because if you look at companies today, 75% of their spend in our space is on all the stuff other than the hardware and the devices. So it's like planning, going and doing deployment where I have technical people, literally with box cutters, opening boxes, putting new images on systems. They struggle to keep systems up to date. How do I manage, support them, take all the calls that are coming in and you start looking at that and you go, there's a way, we've always tried to redo it but it was like shuffle around where the people are and hey, I can take your people and do the thing for you cheaper or maybe not because then you start getting charged for all these crazy change things. Now we're going, hey, with software and services, I can start doing this in an automated, intelligent way that makes it a lot easier. So I can go, when I want you, me, any of us to have an awesome system, go start taking that other cost out, make it easy and fast and then you go, the system can be updated. Someone can go, I get better technology in my user's hands and hey, I save money doing it because I'm not spending on this other crazy stuff. Hopefully invest a little more here but also invest in the infrastructure transformation they have going on. 75% is the, 75% in the markets, what, 100 billion? Is that a fair number? In commercial space, if we throw phones, printers, everything in, there's about $200 billion in companies spent on hardware, 400 billion on other stuff. If you look at PCs, that ratio, it's a bunch of the 200 billion and it's basically that 400 billion. In a large chunk of that 400 billion, you can attack with just better services and automation and things like that. And that's what we're doing, like with VMware and with our services team of going like, how can I integrate, take VMware software, integrate with our factory and go, when your new system shows up, it has your apps and your image on it. You plug in, you're literally logged in, doing final, last mile customization. So think new employee, rather than having to download a bunch of stuff or an IT person comes and sets up your system, you get that system with what you need, your profile, which we figured out, we've been figured out, hey, here's the kind of users you are, you're a really mobile person, we're going to want to get you this system, you're plugged in with that new system going in minutes. And it eliminates that sneaker net of a bunch of people doing it and turns it into intelligence and software. So that's tens of billions in TAM expansion. Yeah, I think it's, we look at it as, hey, it's a good opportunity for us to expand and then it saves customers, it saves them time and money and makes it easier. You're innovating on two fronts, making a great device, more horsepower, to get that step-up function on new kinds of productivity that warrant the price increase for the user and then all that integration back end. Yes. Two innovation tracks, big time. Yeah, and then we have to keep pushing on the physical hardware and that's where I go, if you went back in time 10 years ago, you know, it's like the systems were big and thick. We never imagined they would be this slim, this powerful, I look at the future and go, when you think about AR, VR, you think about more natural interaction with systems, with voice and with breaking pen, really a first user class with the keyboard, I think there's a lot of opportunity going forward. If we want to do stuff that will cause people to want to buy new systems, so it's a good challenge to have. Well, we'll do a deal for you with theCUBE, special sponsorship, consideration for the curve monitors and all the great stuff. Thanks for coming on. Sounds good. And we got Ray Tracing into the CUBE conversation here. Sam, thanks for coming on and sharing. Congratulations on your success. PCs getting stronger faster, new productivity gains with Ray Tracing, all this other stuff happening. This is what cloud and data does. It's theCUBE bringing you all the content here. It's a content cannon, two sets. Be right back with more coverage here at Dell Technology World after this short break.