 theCUBE presents Dell Technologies World, brought to you by Dell. Hey everyone, and welcome back to theCUBE's live coverage of Dell Technologies World 2022 from the show floor, The Venetian, in Lysley, Las Vegas. Lisa Martin here with Dave Vellante. We're having a little reunion with our guests that we haven't seen in a couple years. Please welcome back to theCUBE, Doug Schmidt, president of Dell Technologies Services. Alex Boroto joins us as well, the senior vice president of emerging services and technology. Hi guys, it's great to see you in 3D. I know, great to be back. Yes. It's awesome to be back. Isn't it great? Fantastic. We were talking about how we have to get our sea legs back, about even just interacting with people in their life. That's exactly right. Being able to see everybody be back in person at these events, and it's great to see everybody. It's like coming back to family. It is, it's been a reunion since Sunday. One of this, obviously, the last two years have been quite challenging for everybody, for customers. Dell is coming off its best year ever in FY22, over 100 billion in revenues, 17% growth year-over-year, astounding growth. The voice of the customer is, as always, strong here at Dell Technologies Bowl. But Doug, talk to us about some of the things that have been going on from a services perspective and how you really stepped in to help customers across industries succeed in the dynamic times we've been living in. Well, yeah, thank you. And you're right, coming off a very great year. And I think, as you can see behind us and in the room here, there's just great solutions for our customers. And that's what it's about, delivering the outcomes. And service is a huge piece of that, of making sure we bring all that together, deliver the outcomes our customers are looking for. If you look at the overall services organization, just to take a step back just a little bit, we are a team of around over 60,000 folks in 170 countries. And look, it's about this lifecycle of services we provide. Everything from consulting to deployment, to our support, managed services, security, education services, residency services, all the way to asset sustainability and recovery so we can get all of the material back in and recycle it. So we have a great suite of services. And it's bringing all that together for the customer again to deliver with the products and the solutions and the software, the outcomes they're looking for. You asked a little bit about, just to kind of double click that, about what our customers really saying, kind of what they're hearing, what we're hearing. I think there's three things, when I think about what they're looking for. One is the trusted advisor. You heard this during Michael's keynote speech, that is key. They're navigating through the digital transformation, hybrid cloud, all of these things, determining what they need to do to deliver their outcomes. And Dell can bring that trusted advisor status to them so we can consult with them, professional services help bring that. The second thing is really around that lifecycle services I talked about, all those different services that we bring. We allow our customers clearly the choice to say what pieces of the services do they need. Now we think that we can bring everything together into a managed solution for them, but if there's certain pieces that they need to just double click on, we can help with that. And then look, the third item that I'm hearing and that we can bring and that we have for them is flexible consumption. They can choose the way they want to consume the technology. You consume it by usage. You can consume by month, by quarter, or if you want the stability of long-term contracts, one, two, three years, we'll do that. So really it's about trusted advisor and choice to help them deliver their outcomes. So a lot changed during the isolation economy, right? You guys obviously had to support new initiatives. First of all, budgets got squeezed in 2020. They boomed back, you know. So they sort of slingshot it. Real focus on obviously client solutions, remote work, endpoint security, identity access, VDI. Now in the post-isolation economy, it's like okay, some of the stuff at HQ maybe needs to be updated. Maybe we're rethinking the network. So what are you hearing from customers? Where are they in their digital transformations, Alex? You know, what's hot? Yeah, so we actually recently created an emerging services group. And the reason for that is exactly what you're learning today. So we actually tucked in that group everything in this emerging. So Apex, Telco, Edge, data management, all the things our customers are asking for and we're incubating new solutions, new services to meet their needs. And all that is housed in one unit. And we're thinking about the product management, the technology that goes with it. And we're working partnership with our customers to actually build and develop solutions that they're looking for. Yeah, there was no as-of-service, really. I mean, you could do it with financial, you know, machinations before. Now it's becoming much more mainstream. I mean, I know it's not 100% of your business and maybe never will be. You know, but that's a whole new mindset. What else is changing in the business that you guys see? Well yeah, I think that's what comes back to what we saw. First of all, we listen to the customers follow what their needs are. And you're right, as far as the as-of-service, I think it's back to that choice, right? If they want to purchase or consume as flexible or as needed, we'll do that. They want the contracts, the standard CapEx model. We'll do that as well. Look, there's three things. Professional services is really changing as well. We're seeing the needs again for going in and being able to deliver the services to customers, but also manage that in a lot of cases. They're asking us to take the workloads from them so that they can go and change their transformation and their digitalization is one of the things that we're clearly hearing. And I know you're hearing the second one, security. I mean, that is top of mind for everyone. And we have launched a lot of services around this. Some of those like MDR, our managed detection response, our cyber vault, as well as our APEC cyber recovery services as well that we've announced here. So, securities number two. And then the third one is this sustainability. Again, very important for us and our customers is we have a 2030 goal around this, as I'm sure you've heard. But more importantly, that's something, I know my team and I and everyone at Dell, that's a great personal feeling too. When you're getting up and you're doing something that you know's right, really just doing it to help the customers as well is just an extra added benefit. So those would be the three things. Professional service is changing, doing more and more of the managed, take workloads off. Two is the security and the third is the sustainability, clearly. We talked with JJ Davis yesterday. We're talking a lot about ESG and how a tremendous percentage of RFPs come in wanting to know what is Dell Technologies doing from an environmental and social governance perspective that it's really your customers wanting to work with companies like Dell who have a focused, clear agenda on ESG. One thing that I would be curious when you talk about the increase in managed services, the great resignation, right? We've all, that's been happening now for a couple years. It's probably going to persist for a while. Customers, suddenly, you know, labor shortages and the supply chain issues. How have you helped organizations deal with some of the challenges that they're going through from a labor perspective? Is that why one of the reasons for managed services is that we're seeing an increase there? Yeah, you know, I'm sure that can be and I wouldn't doubt that. You mean in terms of our customers wanting more and more of the managed and the professional. Yeah, I think that is a piece of it. But I also think part of that is that speed matters and customers are looking for the additional assistance to take things off that they may have traditionally done so that they can really get this transformation that's hybrid cloud, getting things moving very, very quickly. There's just so much to be done in terms of data management and bringing information to their end user customers. And they want to spend more time doing that. And so I'm hearing that more, you are right, there's absolutely those times where we have a residency service and that has been growing very, very fast and that tends to be why they asked for it is because people have either left or are leaving. Alex, Doug really kind of alluded to an area that I want to probe a little bit. And I was talking to Jen Felch recently, she's going to be on soon. And you mentioned security, Doug, as the top initiative, clearly. The distance between number two is widening. But number two is cloud migration. Now, I asked Jen about that because internally, Dell has its own cloud. And I said, how do you interpret that? How do you, what's your second priority? She goes, well, I would translate that into modernization. So we're essentially building our own cloud is how I interpreted it. So my question to you is, are you seeing that with customers? How closely do you work with your own IT to take those learnings to your customers? And what does modernization actually mean to your customers? Yeah, that's a great question. It's actually the essence of why we're here, right? Talking to our customers and showcasing what we do within services, what we do within IT. Jen and I talk very often about hair roll map, hour roll map, and we want to showcase that to our customers because it's a proof point. It's a proof point of how they can do the transformation on their own. We have a whole slew of products from a service standpoint. They're tied with what Jen is doing as well. And that's what we bring to market. So whether that's on APEX, that we announced right here two days ago the Cyber Recovery Services available now. That's working very closely with our IT counterparts. And we have a whole slew of roll map with high performance computing to be announced soon and machine learning operations. All that is to meet the customer needs and what they're asking for. And if you look at the emergence of needs from a customer standpoint, it goes in a multitude of uses, right? We have Telco customers. They have very specific needs and we're looking to meet those needs. We have the traditional customers, which may be going at a slower speed in their adoption of the cloud. We're there to help them. And we're all about the hybrid cloud. Hybrid cloud is 100% of our strategy. So whether you want to go cloud based, whether you want to be on-prem or you want to be hybrid, we're there to solve your needs. What's the partner's story in terms of delivering services? We know that the Dell Technologies partner ecosystem is massive. We know how important partners are to the growth. I think I saw 59 billion in revenue came through the channel last year alone. How do you enable partners to deliver some of those key services that you talked about? To leverage the partners for the on the broader ecosystem for that. Yes, well, you're right. We do have a very large partner network and we're very flexible on that again. It sounds like we are flexible on everything. And we are, by the way, for our customers and our partners. Because look, it is about delivering first of all, how our customers want their service. I do like this idea. And we talk about modernization, transformation, digitalization, all these things are kind of the same thing about going in and looking about how we're improving the overall infrastructure and these outcomes. And to that end, we work with the customer on what they're looking for. And then we'll either do a couple of things with working with the partners. Either we take crime and we'll take that and take the pieces that they can deliver and we can deliver together. But again, it's with the customer in mind of how they want to do that, working with the customer. We do have code delivery services as well. And look, we're very open with our partners about if they want to be prime and then leverage those same lifecycle services we have. What this is about is about getting this transformation and this technology and these solutions into the hands of the customers in the best way possible. So I could white label, as a partner, can I white label your services? We don't have the white label. We do have code delivery. Okay, so that's what I could do. Okay, I'm bringing this value, Dell's bringing that value, but you're visible to the customer. Which is, I presume, a benefit to the customer. Correct, correct. And the trust that you've built on. Now that gets, you know, just the white label you would say we'd like our pro series, pro support, pro deploy, pro manage, all of those things isn't a white label, but at the same time, our customers, especially in the professional service side of it, could be the prime, which would be the same thing as a label. How are client, this is kind of interesting thought I had the other day, how are client services changing? Do you see the point where, I mean maybe you're doing it already, it's just full, manage all my client devices and just take that away from me and Dell, you take care of that and I'll pay you a monthly fee. Well yeah, we are seeing that and one of the things that they like the best about us doing that management is bringing kind of the AI and the BI to it that we can with our support assist and all of the data that we get back, we're actually able to help manage those environments much better in terms of an end to end, keep things updated, upgraded, manage it, but more importantly what we see when we do have those client managed services end to end, the customers are actually coming back and asking us to help improve their operational performance and what I mean by that is all of a sudden you'll see things where the trouble tickets are coming in, because we're seeing that and we're actually going back in with that information to help alleviate or improve their operational processes so that they're able to function and spend more time on their business outcomes. And reduce that complexity, sorry Dave. No worries, how about the tip of the spear, the consulting piece, what are you seeing are we going through, as we modernize, are we going through another wave of application rationalization, people trying to figure out their digital transformation, what to double down on, what to retire, what the sun set, what's that? I think it's similar to the managed service conversation we just had, it's really pivoting to technology. Even in the services space, it was all about our physical footprint five, six years ago, our physical capabilities, the number of people, the depots, the center that we had. Right now our customers and even internally what we're pivoting towards is technology. They want to know how are you going to do to solve our problems whether it's consulting or managed services, using technology. Precisely to the point that Doug was making because they want insights, value add from the services we provide, not just consult for me, not just manage my service but provide me value added service on top of that so that I can actually differentiate my services, my solutions, and that's what we're building, that's what delivering, really leveraging technology. You look at the number of software engineers we have, data scientists, the algorithms we're building now, inside services, it's really become a technology hub whereas it used to be a physical hub. I'm just going to, oh I'm sorry, please. Go ahead, follow up. Where it's really headed is, if you look at this, it's going to become this outcome-based services. When I talk about outcome-based services, it's not managing just the IT infrastructure that you have to do. You have to modernize and transform, however you want to say that, the customers. But in addition to that, they're looking for us to take that information and help change their business models as well with the data and the insights we're getting back. They're operating model. Absolutely. But changing that in the last couple of years and pivoting over and over again to survive and to thrive, talk to us, Alex, about the emerging services and how you've maybe a particular customer example of how you've helped an organization radically transform in the last two years to be competitive and to be thriving in this new economy in which we're living. Yeah, I think a great example is Dish. If you look at Dish, they're actually launching one of the first open-rand networks, right? Leveraging the power of 5G and we're working very closely with them on the services and solutioning to enable them to deliver that service to their customers. And that's a new area for us, a new area for them. So we're actually working together and innovating and coming up with solutions and bringing those to the market. It's a great example. A lot of collaboration, guys. Thank you so much for joining us. Great to see you back in person again after a couple of years, probably three. We appreciate your time and your insights. Thanks, guys. Thanks for having us. For Dave Vellante, Lisa Martin here. You're watching theCUBE live from Dell Technologies World 2022. Stick around and we'll be right back with our next guest.