 Dell World 2012, full day coverage. We're calling the back end of the day here. I'm John Furrier, the SiliconANGLE. This is SiliconANGLE's theCUBE, our flagship program. When we go out to the events and extract a signal from the noise, I'm joined by my co-host. I'm Dave Vellante of Wikibon.org, and we're here with Suresh Vaswani, who's the president of Dell Services. Dell has been undergoing a major transformation as we've been reporting on and talking about all day. Services is a huge part of that transformation. Suresh, welcome to theCUBE. Thank you. So, as I say, services is a big piece. It's the, John always calls it the tip of the spear from consulting all the way down to technology services. So, a lot of people don't think of Dell as a services company. I mean, I think of Dell as a product company, but I think half of your employees are at services, and you run that organization. So tell us a little bit about that. Yeah, it's interesting. Dell Services accounts for virtually half the manpower of Dell, so there's a lot of services in Dell. If you look at the scale of our business today, it is eight billion plus in terms of size, so it's a fairly substantial business. And five, six years ago, most of Dell Services was support and deployment, and support and deployment is still a very large part of our services, because that grows with the technology business growing, and we innovate further to make sure that we give higher end services to customers as they buy our technology. But leaving aside the support and deployment services, the large part of our business is what we call as non-tight services, or not necessarily tight to all the infrastructure. So we do applications in BPO, and we do it well. We are fairly strong in four sectors, particularly healthcare, we stand out. We do a lot of interesting solutions for the BFSI segment. We work in the retail and manufacturing sector, and we've done some real serious innovation in terms of application implementation for our customers, so that's one part. We have a very strong security services business. It is rated as in the uppermost quadrant of Gartner's Magic Quadrants, which means it's very, very innovative and really world-class, and we manage as many as 32 billion security events every day, so that's the sort of thing that we do. And it is really a world-class security business. It's currently focused on North America, and we will expand that business across the world. Then we've got another very interesting business, the infrastructure and cloud consulting business. So this is all about integrating our integrating, consulting, integrating, and managing IT infrastructure technology for customers. We integrate all of NELS technology. We integrate next-generation technology around infrastructure, and make it work with what the customer has today, right? And basically give the best experience to the customers in that sphere. So if you really look at Dell services, we're fairly broad, fairly complete. We do a lot of services business, which is we go and compete with the service providers in the world, and we acquire a lot of customers that way, and we also work very, very closely with Dell in terms of augmenting. And actually, stitching together all of Dell's technology, you've got Dell end-user computing solutions, you've got Dell Enterprise solutions, the server storage network and convergent infrastructure, and you've got software products now. It's services that really sort of puts it all together as an IT solution for the customers. Sir Ash, we have a services angle site called servicesangle.com, siliconangle.com's our main media site. So we've been tracking services now for about a year and a half, mainly because no one really is writing anything about it. It's kind of a boring, but profitable sector. But it is going under massive transformation. We've seen the client-server wave back in the day drive a lot of that older methodologies and implementations, Oracle, rollouts, SAP rollouts. Now with cloud and convergent infrastructure and this modern infrastructure, big data being a big driver, new server architectures, new storage are causing customers to really, really re-architect their IT environments. So I'd like to ask you, what's the biggest transformation that you've seen in the services industry? Services being professional services around IT over the past five years. What's the big change? Is it project cycles? Is it customer orientation? Is it everyone's tired of outsourcing? Is it time to value? All of the above? What is the biggest transformation that you've seen? Or disruption. So the way I look at it is, and I was in a very interesting CIO session, and in a way that's what Dell is also driving. There's a big change taking place in the services industry. In the past, it was all about, okay, I've got this huge IT infrastructure, I've got thousands of applications, right? It costs so much, let me, let us figure out how to manage this for less. So that led to the formation of the IT outsourcing industry, the global delivery models, and so on and so forth, but fundamentally nothing changed. What you were doing, you continue to do at a lower cost, and that was good, right? But really nothing was changing dramatically. Now, Now we're at an inflection point. We are at an inflection point all across. We are at an economic inflection point. We are at a technology inflection point, and we are at a business inflection point, and if businesses just live in the past, it's not going to be very good. And that is where the services industry also is leading into. The distinct shift that's happening is not only about managing the past and managing the past for less and all of that, it's about how do you transition the customers to their future. There's a lot of active dialogues that are taking place. The business is putting a lot of pressure on IT. How do I reach more customers at a lesser cost? Maybe social media is the answer. How do I predict economic downturns or product downturns, right? So you need all the data insights on data analytics and all of that. So they come back to the IT folks and say help us do that because it's the business imperative. And in a way, Dell has also been communicating a lot of that. All the entire development is all about the five forces. IT has been starved. I mean, IT has been for the decade prior to a few years ago, do more constricting, cutting people out. So it's like a skeleton crew. It's not much. So now I have to, now grow. Got to hire people. Do more functionality, new servers, new software. Who do they call? I mean, it's like a different phone call. Do I call Cap Gemini? No, they're managing the help desk. I mean, I'm a random example, but this is what I'm trying to look for and get to extract the signal here because the services is hard to say. I mean, right now, you're saying, I agree with everything you're saying, but what is the new way? What does the modern services architecture look like? So you said, who do they call? I think they should call Dell. And the reason why, there's a reason why I say it. The reason why I say they should call Dell is because we don't have too much of baggage. We don't have too much of legacy, period. We've built the entire Dell. I mean, if you hear the communication, it's all about taking the customers towards open architecture, taking the customers towards future. And our service of business is completely aligned to that. How do I take my customers to the future? How do I enable customers to use future technology, right? At the same time, respecting the past. So one is not denigrating the past. Then you must have a strategy of how to go from past to the future, which is why we bought a few application modernization companies, right? And all that we do in application modernization is if customers are not shifting fast enough from legacy systems or mainframe systems to new age systems, the only reason they're not doing that is because they don't have a viable application migration strategy. And that's what we've invested in, in terms of building application modernization capability, which gives the confidence to the customer that, look, I can move from here to here. And once you're there, you know it. You apply all the five forces, make it work. So in the old days, Dell was called in to do support and maintenance and all that stuff. Now you have a broader set of things. So you now can still be the multi-vendor, but also you've got a lot more tools in your bag, so to speak. What are the big things that you have in your tool chest that really are driving the services business? Is it the server growth? Is it the software? Is it just the unique insight into customer experiences? What would you say to that? I mean, how would you describe that? We have, Dell has several businesses. Each one of them is aligned, right? And moving in the direction of making Dell and IT solutions provider, keeping the future in mind, right? So if you really look at Dell today, we've got Dell and user computing. There's a lot happening there. We've got Dell enterprise solutions. A lot happening there. The security is huge. You've got software and security. That's fairly large. And then you've got the services piece. And all of them are really aligned, right? Towards making sure that we deliver to the future promise of the customer. So I think that's what Dell has going for us. And we are really looking at the future. Really looking at the forces that are driving change. Does Dell have just one services group or does Marius Hass have his own version? Dell has one services group. So you help Marius's group out? I help Marius's group out. In a way, around services that I can provide around Marius's technology. And I do that for the rest of them. In addition to that, I have a services business which is not necessarily tied to the technology, right? So we have the best of both worlds. So your holistic view of the company, Dell. Which many services companies don't have. Which, if you're a standalone services company, you're caught in your own services business. You'll be in a services business that has hooks onto all the technology and all the forces that are driving change. So I think we have that extra edge. So Sam Palmosano, famous CEO, former CEO of IBM, obviously knows something about services. He made the statement at one point that if you're in the IT business, any business, you will at some point get commoditized. And he made the statement even including services. So first of all, do you buy that? Second of all, you're seeing Amazon move into the business, the cloud business, and taking a different approach. Maybe even said at their recent re-invent conference, we're not going to try to mimic the way that enterprises have done IT. We're going to try to change that. So what's your thought on that Sam Palmosano premise? How does a company like Dell respond to that? And what are you thinking on Amazon, charging into that business? See, at the end of the day, speaking about the cloud and the command on Amazon, I think our strategy is much more oriented towards managing private clouds for customers on their premise or on our premise, much more making sure that we innovate with all the technology that we have and make the cloud work for the customer in a secure, give secure way, a very flexible way, and give that ruggedness that the business user needs in terms of leveraging the cloud. So you need a rugged sort of overall system that is secure, that is tight, that does not fail, et cetera, et cetera. So we do believe that a private cloud is a key issue in so far as customers is concerned. At the same time, you need to leverage for some applications the public cloud. So our philosophy is Dell will be the best private cloud services provider in the world. Dell will have its public cloud. Dell will also interoperate with multiple public clouds to give the customer a truly good, solid hybrid solution. So that's what our philosophy is on cloud. And then of course, Dell has a lot of technology that also feeds into many other public service providers. So that's what our view is on the cloud. So by the way, we like that idea of the private cloud. It's the fabric inside the company. So you get the converged infrastructure, you got virtualization, it's the old wine in a new bottle as the expression goes. Infrastructure, applications in middleware. So today, converged infrastructure, virtualization software and now applications. So Michael talks about this, you guys talk about workloads. It's all about the applications. Now with bring your own device to work, you have a consumer experience and which is applications, app stores and in-house apps. I got a good dial into the land. It's a nightmare for security. So that's a security issue. So the question I have for you is relative to applications, what are you guys looking at from the DevOps side? For example, how do you talk to developers inside the companies? Now IT has to start developing mobile apps. They have to develop frameworks. So talk about the developer market that you're playing in with the customers. What are they like? Can you share with the folks your experience of what the customer's developer market is? Do they have developers? Are they in-house developing? Are they pushing development to the outside? Is it in-house DevOps? What are you seeing for the trend? There's a mix of all of that you've said. A lot of the large customers have a lot of development capability on their own. So they tend to sort of outsource what is routine and look at their in-house development teams for more innovative work. A lot of customers actually outsource all of development. Insofar as Dell is concerned, I'll talk about Dell developers. What is changing there? There's a lot of change happening there as it relates to mobility, right? So the world is moving to mobility so all our developers now are getting tuned to deliver applications or to transform applications to work on the mobile, right? So in a way, the development community also is getting aligned to the five forces and the sort of change those five forces are driving. It also impacts what they do. So it's a whole new paradigm. Developing an application for legacy systems versus for mobile environments is completely a two different- And are you guys providing those tools? Oh yes, we provide those tools. We provide the training. We help them transition. They need good design skills. They need good customer experience skills and a lot of that is changing. Okay, great. Sure, we're getting the break here so we have to kind of transition to our next guest. We're going all day long here at Dell World 2012 in Austin, Texas. This is siliconangle.com, siliconangle.tv, The Cube, our flagship program throughout the events. I'm John Ferrier with Dave Vellante. We'll be right back with our next guest after this short break. Okay, thank you.