 Welcome back to Dell Technologies World 2021. The virtual version, my name is Dave Vellante and this is theCUBE. I'm pleased to welcome Bill Wave-Ros, the president and GM Dell Financial Services at Dell Technologies. Bill, great to see you. Thanks for coming on. Yeah, thanks Dave. It's really great to be here with you. So we heard in Allison Dew's keynote, Dell Technologies all in as a service, Apex. She's the executive lead. So really passionate about that. Talk about DFS in that context. You've always had a way to help people, shift CAPEX to OPEX, but what's your specific role regarding Apex? Yeah, well, thanks Dave. Look, we're really excited about Apex and DFS. We think Apex solutions gives customers access to the broadest range of infrastructure solutions in the industry. If you combine that with the Dell Technologies portfolio of ISG technology and solutions, that's a great combination for customers. But you asked about DFS and at DFS, we've been delivering consumption solutions for over 15 years. So taking a look at the Apex portfolio, you could broadly divide it into two categories. Turnkey, Apex turnkey solutions like data storage services, and then Apex custom solutions like data center utility and flex on demand. And those custom solutions are where DFS plays. And as I said, we've been offering those for over 15 years. We have a lot of experience with customers, what customers are looking for. We have tens of thousands of assets out there today with hundreds of customers that are being metered on a regular basis that we're billing monthly. So we're getting a lot of feedback from customers. And I think the Apex solutions announcements that you heard here at Dell Technologies World are a further expansion of that. They're built on the backbone of what DFS has been delivering for a long time. So we've taken, I think the best of those solutions and we've listened to customers. What are they looking for? What do they want? And we've got even new and improved offerings in the current announcement that we made. So, I think when you talk to customers, they want a couple of things. They want simplicity. They wanna be able to understand how they're gonna acquire and how those payment solutions work. And they want choice. And I think the Apex solutions gives customers both of those things. And the good news is, they're available on all sorts of ISG hardware be it servers, storage, hyperconverged, infrastructures, customers can choose what technology they're looking for and they can create their own demand environment. And the last thing I'll do is a little plug for DFS. We've been in the payment solution business for over 25 years. So we not only offer consumption solutions, but we offer traditional leases and financing. And so when you add all that together and you go talk to a customer about technology and how they wanna pay for it, we think we've got the broadest range in the industry. And we're really proud of that. Okay, cool. So you got the two areas that you simplified it, which is great. You got that standard off the shelf and then you got the custom solutions. The standard stuff is like console data storage and then cloud services that breaks down even further. And then the custom, I got my notes, Apex Flex on Demand and Apex Data Center Utility. How do Apex custom solutions differ from those turnkey offerings? Yeah. Well, the beautiful thing about Apex is it gives customers choice. So as you mentioned, you have turnkey. So if you think data storage services, that's one of our new turnkey type offerings. And those turnkey offerings are outcome based. So think about it as an outcome. What is a customer looking for? Do they want file versus block storage? What sort of capacity do they need? What performance level are they looking for? But it's thinking of those outcomes and Dell technology is gonna take care of the rest. A customer can go to the Apex console, they can review those choices, they can make their selections and then they can turn it over to Dell and we'll deploy that technology, we'll manage it, we'll upgrade it and we'll service it over the life of the term. So the customer can focus on outcomes versus on acquiring and managing technology. So that's the turnkey solution and that's probably the biggest and newest part of our announcement of Apex solutions. And then we have the custom. The custom, as you mentioned, Data Center Utility Flex on Demand, that's what DFS has been delivering for many years now and that's for a customer who wants to select the product. So think of it as a product-based solution where a customer wants to select the technology, they may want to manage it themselves, they may want to have a partner manage it, they may want to include different services. So they're able to put that together in a custom way and satisfy whatever problem they're trying to solve. So we found that many customers are going to want to select that custom solution because they're in a part of their data transformation journey where they still want to control some of the technology and others will want to go the turnkey route. So again, it kind of goes back to the customer choice and allowing them to acquire it the way that they want to acquire it. Okay, so like an example might be, I'm just making this up, I'm a financial institution, I'm a big VMAX customer, I got some kind of special process that I use that I wrote that gives me competitive differentiation because I can get a millisecond faster than my competitor, speed or whatever. And I want that, I'm not going to take, that's not part of your turnkey solution, but that's part of my value add. I want that, but I want your help in sort of customizing that and making it as a service. Is that like a reasonable example? That's a great example. And so, let me talk about that a little bit. So let me give you a couple of examples of the use cases and what the products provide. So think about, let's talk about data center utility first because when you think of data center utility, think data center, right? These are large deployments, they're big customers, they're most likely a global customer and they want to get out of the data center business, right? They want to get out of the day-to-day management of that and be able to focus on, hey, how do we as a CIO deliver value to my business? I want to make a difference in that business strategy. CIO is more and more being asked to help the business and enable that business strategy. And so many of them want to get out of the data center management business. And this is where the data center utility product can come in. It allows us to go in as Dell and help that customer manage that data center. So it has the most flexibility in terms of custom billing, custom reporting, very low, if any, minimum commitments. And one of the best features is we have a delivery manager who's assigned to every account, who can help that customer procure assets, manage assets, deal with capacity management. So we really can take over the management of that data center and allow the customer's IT group to focus on delivering value to the business. So we think that's a really important aspect of it. And it allows us to manage even existing assets that are sitting out at the customer as well as new purchases. And then back to the kind of example that you gave, where a customer really wants that high performance, they have specific hardware in mind, they can also use a flex on demand type product. So the customer is able to pick the hardware, whether it be server, storage, converged infrastructure, hyperconverged, and they can select the technology that they want to use. They can sign up for a very flexible period of time so they can go from one year to five years. They may only need this hardware for a limited period of time. Maybe they're working on a project where they're going to need additional storage capacity for the next couple of years. So they can sign up for a two year contract if they want. They can sign up for the commitment level that they want to use. So one of the great things that customers are looking for is they want that cloud-like operating model, they want to pay for that technology as they utilize it. And they don't want to be locked in to having to purchase a large amount of data if potentially they're not going to use it. So flex on demand gives them that flexibility. They can sign up for 50% of a storage-erased capacity and only pay for usage above and beyond that 50%. So it offers customers a lot of choice and a lot of ability to get the technology they want and be a very flexible utilization method as they go forward. So I don't think a lot of people realize that. You said very low or no minimum commitments. So maybe you could explain that a little bit. And who owns the asset? Well, when we talk about flex on demand, it is still owned by Dell. So Dell owns that asset and the customer can commit. We think we have the broadest range of commitment levels in the industry. So if you think about a flex on demand type offering and let's say you want to purchase a storage array, you can sign up for a 50% minimum commitment. So again, you've got flexibility on the term, so you can go one to five years. You can sign up for 50% commitment. So you're gonna get a bill for 50% of that storage usage every month, but you're not gonna get a bill for anything more unless you utilize it. Now let's say one month you go to 60%, right? So you're gonna pay that extra 10% only when you use it. If you go back down to 50% the following month, you don't pay. And let me point something out on this because I think this is where we differ from a lot of our competition. The rate you pay is the same. So it's the same for the minimum commitment level of 50%, as it is for the incremental 10% or 20% that you use above that. Some of our competitors have surge pricing. So basically once you go above your commitment, you're paying a premium. We don't do that. We've heard from customers, they don't like that. They want it simple. They want to pay one rate per gigabyte throughout the life of that contract. And so we do that. Another unique feature, which we kind of just implemented recently, is that the max that you can pay is 85% on that storage usage. So if you sign up for a 50% minimum commitment, and let's say you use 90% of it. So you've got a pretty significant increase off your minimum. We will only charge you up to 85%. And that's a new feature that we added to all our flex on demand products recently for future customers, as well as previous customers. So we've actually gone back to all our current customers and said, this applies to you, even though that wasn't part of the original offering, we're going to cap you at that 85% level. And the reason we did that is because while customers love pay for things as they use them, they're a little uncomfortable on uncertainty of maybe paying too much, right? So we put this in to help protect customers that they wouldn't have to worry about paying more than they expected to. So we think that's a pretty cool feature of what we offer. Yeah, so to summarize the features, I got the portfolio, I got the whole portfolio I have access to, I got the flexibility that you just described in great detail and pricing transparency or certainty. And then the other piece is the value, the 85% cap. So that's pretty cool. Yeah. Okay, so you've been doing this for a while. You have data and experience with real customers with different types of customer solutions. Maybe you could share some of the business impacts and benefits that customers have seen. Yeah, well, let me give you an example. So data center utility, we had a large multinational manufacturer who again, as I mentioned earlier, they wanted to get out of the data center environment. They had a, they don't want to manage that anymore. They had a complex data center. It was managed with about 50% of their own internal IT department and 50% with a third party service provider. They had multiple hardware vendors, multiple third parties providing services. It was very, very complex. So they came to Dell Technologies. We took that data center, put it into a data center and utility contract and we took over management of the data center. So it freed up that 50% of their own IT staff to work on other things that provided value to the business. And then we were able to take that consolidate vendors, make it a lot simpler and improve the efficiency of the data center. And that's an important thing. So it's not just about how you pay for it, that you pay for it in a variable manner. It's how efficient can you make that data center? And no one knows Dell Technologies assets and hardware better than us, right? So we were able to create tremendous value by utilizing those assets more efficiently. So they were getting more productivity out of the underlying IT assets. We simplified it for them. And we were able to take their team out of that day-to-day management which is what they were looking for. So there's a great example of a win-win on both sides. And what we've found with these customers is once they go to this kind of model, they stay with it, they like it. And we actually end up expanding our relationship with these customers. So it's good for us in a lot of ways. And one of the things we didn't talk about earlier is another benefit that maybe isn't so obvious. Particularly when you look at a flex on demand type product. So let's think about flex on demand. One of the things customers are struggling with is how to predict how much data storage they're going to need in the future. There's this huge data explosion going on in the world. We've talked about that many times. And CIOs often have trouble trying to predict how much capacity they're going to need in the future. They don't know exactly where it's going to go. And so one of the struggles that they have is when they have a need for that data, it takes time to get it available. So if you think about a CIO that all of a sudden has additional capacity they need to add to their infrastructure, it could take 90 days to get that out on the floor. They've got to go through their internal requisition process, they've got to select a vendor, they've got to acquire the hardware, get it all set up. This all takes time. 90 days later is too late. One of the things that flex on demand offers is that you're able to get that capacity on the floor. And at the push of the button, you can have it up and running. So you're not paying for it until you use it. But once you do need it, you can have it available really quickly. And that's one of the benefits that maybe people don't expect when they use this flex on demand product but provides tremendous value for customers. So we've seen that kind of time and time again with flex on demand. We had a large pharmaceutical customer who went to one of these, had a mandate that they wanted to go to a cloud operating model for all their IT purchases. So they wanted to free up cash flow. That was kind of a directive from the top, free up cash flow, let's get out of the CapEx business. And flex on demand was a perfect answer to that because it freed up the cash flow. They paid for the technology over time and they were able to have this capacity available whenever they needed it. So we've seen that as a tremendous benefit of the custom flex on demand model. I've done a lot of TCO studies, Bill. And I'll tell you the upfront planning, the capacity planning, the asset management, the procurement, these are a big chunk of the labor costs associated with total costs. Okay, so we got the turnkey with the three components. We got the custom with the two components. There was a fifth bucket in my notes here, which is the partners and the channel. And I'm really interested in how the channel is transforming no longer, can you just be a box seller in the channel? Those days are gone, made a lot of money doing that. Good deal, but now you got to add value. The cloud has really changed everything there. So it's all, and of course, as you know, it's all about the margin and profitability. So talk about the channel, you've always had relationships and how Apex fits with channel partners. Yeah, well, Dave, we've had great experience working with our partners. I mean, partners are here in the same thing from customers that we're here. They want a cloud-based type operating model. They want to pay for their technology as they use it. So partners are looking to provide the same value to customers. And we found that working with partners expands our reach tremendously and they have a lot of expertise. So the Apex Customs solutions are designed to work with partners. Partners can either sell those of themselves so they can sort of resell our solution to them or they can just refer the business to us. And they're going to get a 20% uplift on the committed contract value for those contracts. So this is really financially attractive to our channel partners and it allows us to work with those partners to get to more customers. And as I mentioned earlier, these custom solutions can include services from the partners. So we can provide the hardware piece to them. They can add on their services on top of that and they can be the primary relationship with a customer or again, they can refer it over to us. So we found that to be a really good value proposition for partners and we think they're pretty happy about it. I mean, we have an example of Relate Care as a company that supports healthcare organizations around the world. So helping with patient communication, appointment scheduling, telehealth, which is a really big area right now as you know with the pandemic still going across the world. This is an area of tremendous growth. So Relate Care was working with one of our partners, ArcFire. And they needed more flexibility in the data center. And so these Apex FlexOn Demand was a perfect solution for that. It allowed them to deliver a secure flexible data center and work with their partner to really improve the service level that was occurring in that relationship. And if you think about it, one of the things we didn't mention is particularly for a lot of healthcare companies and companies and customers who have a high sensitivity around data security and where that data resides. One of the advantages of on-prem solutions like Apex FlexOn Demand or Data Center Utility is you know where your data is. The public cloud can move the data around often without you knowing about it. And so that security, that assurance that you know exactly where your data is is really important to a lot of our customers. So it's kind of another feature that has been official for customers. And again, we're seeing partners adopt this more and more. And I think over time that is going to continue to grow. Yeah, so 20 points on the uplift plus additional services that I can bring in because they've got a tighter relationship. You know, in this model, right? The renewal starts when you sign the contract. So it's a much, much deeper relationship. Can the partners, can they white label the service? Is it co-branded? Is it all Dell branded? Yeah, well they have the choice. I mean, the partner can actually take on the billing and relationship primarily if that's what they would like to do. And again, so that's one of the offerings or they can refer it to us. You know, many partners don't make, they don't have the back end of the infrastructure they do all that billing and collecting themselves. So they prefer just to refer it to us. Other partners are large, they do have those capabilities and they want to take on the primary relationship. So we can work with them both ways and we have worked with them both ways. Nice, we're out of time, Bill, but give us the bottom line. You touched on some of this, but why Apex over the competition? Yeah, well, look, I think it goes back. The first thing is Dell Technologies, right? Dell Technologies has the broadest selection of products and services being in the industry. So you combine that with Apex Solutions, you've got to win-win, it's unbeatable in my opinion. We also, I think, have the best range of flexibility in those payment solutions. So you can go from a minimum commitment of 40%, you know, all the way up to 85%, you can go one to five years, you know, no surcharges, right? The rate is the rate, the rate goes from the minimum all the way to the maximum. We have the storage cap that I talked about, HCI cap at 85%, so you're gonna be capped so you don't have unexpected costs that you didn't forecast. And you can flex up and down, right? So you flex up, you flex down. Some of our competition, once you flex up, you can't flex back down. And that's a real negative in my opinion. And we've got 15 years of experience of doing this. So that's really important, you know, we've worked with a lot of customers, we've learned a lot during those journeys, and we think we're the best equipped to provide you with consumption solutions and as a service solutions that really work for customers. Financial flexibility, asset management, the really key part of IT that we don't spend enough time talking about. Bill, thanks so much for coming on theCUBE and sharing your insights. Hey, thanks Dave, really glad to be here, thank you. All right, and thank you for watching everybody. This is Dave Vellante for theCUBE's continuous coverage of Dell Tech World 2021, the virtual edition. We'll be right back right after this short break.