 From Austin, Texas, extracting the signal from the noise. It's theCUBE, covering Dell World 2015. Brought to you by Dell. Now your hosts, John Furrier and Dave Vellante. Okay, welcome back. We are here live at Dell World. This is theCUBE, SiliconANGLE's flagship program. We go out to the events and extract the civil noise. I'm John Furrier, the founder of SiliconANGLE. Join my co-host, Dave Vellante, founder of wikibon.com. Our next guest is the CEO, the founder of Dell Computer, Michael Dell. Welcome back to theCUBE. Great to see you. Congratulations, great to see you. Great to be with you guys. And great to be here on theCUBE at Dell World. Yeah, it's fantastic. It's the highlight of our show. Tweet everyone, 230. I got to say, I'm super impressed. You're 50 years old now and you've been an entrepreneur since your dorm room. You told the story on the keynote today. And it's inspiring for many entrepreneurs because the ones that win the most in business is the one the founders are still around. And you're here for Michael 5.0 version of Dell. I just made that up because you're 50. But you got a spring, you got a vigor, you got all the toys, you got all the nukes, you got all the weapons now. I mean, who is on your radar for complete competition at this point? You know, what's very exciting right now is what's happening in IT. And it's this move of IT from the back office to the front office and the business transformation. And so what I'm very focused on is how do we help all of our customers in that journey? And it's a huge expansion of the pool of opportunity of IT. Certainly there are plenty of competitors, plenty of people going after the same opportunities. Not as big as you guys though now. I mean, you would be right. But we have an incredible set of assets and people, tremendous talent, resources, reach and breath across the globe to be able to go help our customers address those opportunities. So you said on the stage that you've booked revenue since the founding of Dell of $900 billion. Can we just call it a trillion? Over 900 billion, not quite a trillion. But I'm counting, I'm keeping score, I'm telling you. I can tell. We're going to have quite a party when we get to a trillion. So maybe you guys will come and vote. That's pretty significant. So you're pinching yourself this week. I mean, Dell world couldn't have been timed any better. I mean, you did the deal last week. So all that discussion happens a full week of people to digest the EMC's acquisition news, $67 billion. Now you're at Dell. The timing worked out very well. Great buzz here. So what's the conversation like? What are the customers saying? Obviously the employees are probably like, man, my workload just went up. Marius says, all you can eat environment at Dell for career advancement. All you can eat work. There's no shortage of things to do. Customers are really energized by this. What I've heard from customers is, wow, you guys are making my life really easy here because you're bringing all this together. You're going to be able to provide us more of the solutions and not to underestimate the amount of work that we have involved here. But we're very excited. So Michael, my last question to you last year at Dell world was, what would you do if you were Joe Tucci? Does Joe talk to you? Does he ask for your advice? And you say, well, Joe and I talk. I'll just leave it at that. I had already started the discussion with him at that point. So I put words in your mouth and I said, well, he's asking Michael for advice, but Michael, we'll just leave it there. So you'd started the discussions already at that point. Take us through what you can share with us now about that. I contacted Joe, I guess it was about a year ago, maybe a little over a year now, and we started a discussion. And I've known Joe a long time. I knew him before he was at EMC. Mother from another brother. No, brother from another mother. Brother from another mother, yes. And we had this great alliance together for about a decade. And we got that up to about $2 billion on an annual basis. And there was a point where we split and decided to go do different things. But we remained friends. And as I started the discussion with him about a year ago, I think we both believed and saw, and ultimately the board of EMC believed that this was the best outcome for them. I'm very excited. I think it's a great outcome for our customers, for everyone at Dell and everyone at EMC. And I think that the companies are highly complimentary. And I think it creates an absolute enterprise solutions powerhouse. So was the conversation like, hey, Joe, this private thing is pretty good. You know, I really like it. You're not spending all your time with the 90s. But that was certainly part of it. And I think that was intriguing to EMC because of the ability. I mean, any person involved in running a complicated public company, if you think about reimagining the business with a longer term horizon, three years, five years, 10 years, their eyes light up. And they delight in thinking about the things that they can do. And that's the discussion that we've had with so many of the EMC folks. And, you know, it's been great. Michael, talk about VMware. I mean, we've been observing VMware from the front row. I mean, Dave knows that Dick Egan back on the day when he said we're going to IDC. And we've been to all the VM world and EMC worlds. Pat Gelsinger seemed to be like waiting to like unleash his, Pat, you know, Intel Mojo onto VMware. But he felt, it felt to me that he was held back by all the EMC Federation, a lot of partnering, hard to partner. Have you talked to Pat Gelsinger and what's his feeling now? Does he feel like, hey, now I'm now running a public company, what's the vibe with Pat Gelsinger right now? I've talked to Pat Gelsinger a lot. Yeah, absolutely. Adam over at the house this weekend with his wife and my wife and, you know. Share what's been Pat's mind right now. Is he like totally guns blaring right now or he's pumped up? Yeah, you know, I think we all see an incredible opportunity here. Now, let me say, first of all, as it relates to VMware, we've been very clear that VMware is going to remain an independent public company. And one of the first things I did was I contacted the key ecosystem partners and assured them that we're not going to run VMware in some very different way. You know, that we're going to keep the partner network going. We're not going to disadvantage partners. And give them confidence in their ecosystem. The relationships that those companies have with VMware, we're not going to interrupt those. We have no incentive to. And so that absolutely remains. And that's our intent. And I think they were reassured to hear that. And VMware, from my perspective, a very special company, very talented people. I think it has an enormously important role to play in the industry. You think about where the world's going with hybrid cloud, software-defined data center, what's going on in virtualization, in air watch with mobile device management. I think they're very well positioned. Pat's got that Intel DNA, you know, in Moore's Law Cadence innovation focus. And I've known Pat actually longer than I've known Joe. I met Pat back in the late 1980s when he was, you know, he was Andy Grove's technical assistant. And so, you know, the good news is, either through, you know, just being around a long time and the alliance that we had with EMC, we know the team there broadly and have for a long, long time. So last month, we had our big event down in New York City and we had a guest on, former Wall Street analyst, Peter Goldmacher. You may remember him. And he said, you know who's the most dangerous company in the business right now of all the traditional guys? And I said, Dell. And he said, yes, you know why? And we talked about it. So because Dell lives on low margins, if Dell can actually increase its software content, it's really going to do some damage in this business. The first time I've really heard somebody sort of take that critical analysis. And then, of course, you make this big announcement. So your gross margin is going to go from whatever, high teams, low 20s to mid 30s. Talk about sort of the transformation of your business overnight when this deal goes down. Certainly it's a big move. I mean, I think, you know, we've been on this journey for some time in really thinking about how do we address the challenges and opportunities that our customers have? One thing I'll say about the enterprise, I think we built an incredible enterprise business at Dell. And I don't think we necessarily got our due relative to the level of investments and innovation that we put forth. Now who better to help us actually make that a reality than EMC? And so I think the combination is incredibly powerful. If you look at what we've done in x86 servers, in web scale infrastructure, hyperscale infrastructure, we're second to none. You combine that with the incredible innovation that EMC has driven in storage across every different variety and type of storage, including software defined with Pivotal, with RSA, with VMware, with VCE, with Virtustream. This is really an incredible combination. So I couldn't be more excited. So should we expect that software content to sort of become more integrated or do you think this federation model is the right approach or don't know yet? I believe I do know. So, can you share a little? Here's what we see. We have seen some things in our business that are similar to what Joe has seen. And that is that it doesn't make sense to just amalgamate everything together. There are unique businesses that have special customers, special ways of operating. And if you just kind of combine them all together, you crush them and it doesn't work well. So I'll take the example of SecureWorks. This is a really incredible business that we've been building at Dell. And when we acquired SecureWorks five years ago, managed security services, threat intelligence. If we had acquired that company five years ago and said, okay, all you SecureWorks salespeople coming over here, by the way, we want you to sell all this other stuff. We just destroyed this little company, right? Instead, it's growing, you know, it's three times larger. You know, it's growing in a very fast rate, absolutely top of the Gartner Magic Quadrant. So I think there's a role for incubating these new businesses. As Joe has done very successfully with VMware, with Pivotal, I think there's a winning model here. It's a danger, though, with the platform. When you have an ecosystem, it gets dangerous. I mean, VMware, we've always been talked about, you mentioned it earlier. They have an ecosystem that's not EMC, too. So when you have a platform, it's a little bit more delicate, which brings up the kind of the IoT opportunity. You mentioned that, you've led with that today. Clearly, right out front, IoT has a huge opportunity. I mean, you've got a great OEM business that you've built, probably we might not know the numbers, but we were talking about earlier, great supply chain expertise. Are you going to get in the sensor making business, tied to software? I mean, just a huge opportunity in IoT. Can you share some vision on how that's going to evolve for you guys? Yeah, when you think about all these product and service companies going into the digital age, they need sensors and data to be able to do that. And we're not going to make everything that is behind that digital transformation, but there are enormous opportunities. I launched our gateway today, which will collect information from lots of sensors. Back in one of our whisper suites, we've got like five more products coming for the IoT portfolio that we're showing our very good customers. We do have- Not yet released, not yet released. We have 4,000 OEM customers that work with Dell. We've been in the OEM business for a decade and a half. We're really good at this. And I think the IoT opportunity is really enormous. And it's certainly way, way beyond what you would think of as the traditional IT domain. These folks are doing all sorts of things that we would never have a way to get at those opportunities. But they're highly focused, vertical, embedded. So an example would be, if you go to get your genome sequenced, right? Well, there's a Dell in there, and there's a lot of data being collected. If you go to the hospital and you're treated for some complex medical procedure, there's a big machine that's- Computes clear. Doing all these things. Clearly. Our engines are behind those. You think about all the appliances that are fueling all these new startups. You know, we're- Huge, Tim. We're behind that, it's huge. So all the industrial companies putting intelligence embedded in their machines, huge opportunity. So people want answers. You obviously don't have all the answers or aren't in a position to give the answers. But you've given us some guidance here. You're not going to mash VMware into some Oracle of infrastructure. You're not going to do that. No. Pivotal IPO comes up all the time. What can you tell us about intentions there? Or any other IPO activities? Are those things that are in the works potential off the table? What can you share with us? You know, I think EMC has said that there's an intent to take Pivotal public and I agree with that. So I've spoken with Paul Merritts. I've spoken with Rob Me. I understand what Cloud Foundry is. This is an incredible asset. The Pivotal big data platform, Pivotal Labs. What goes on in Pivotal is quite incredible and I'm looking forward to spending more time with that team. They're on a path to an IPO as EMC has said and I'm fully supportive of that. Michael, we're getting the break here. I know you got another appointment. Thanks for spending the time. My final question for you, is there one thing that you've learned over the past year since talking to Joe Tucci now that you announced the deal, certainly hasn't closed you, a lot more work to do in nine months from now, but one learning that's been magnified for you personally through this whole process that's surprised you. There's too many things to talk about there. So, you know, we've been working and thinking about this for a year and because of the enormity of the project, it wasn't a flippant decision, right? It was a very carefully- You learn, you get the job done, you get the deal done. You know, carefully studied decision and, you know, at various times it wasn't clear whether it was going to happen or not, but we finally, you know, got there and I couldn't be more thrilled. You know, there's a lot of work to do, but absolutely fantastic people. I think the businesses fit together extremely well and couldn't be more excited. Been a computer industry for a long time. You've seen the players come and go from Microsoft's growing up through part of that whole computer revolution you were part of. You kind of like pinch yourself and go, wow, I got all these assets now and we feel, you know, do you feel I have that moment of like, wow. You have a more fun now or when you're in the door room? Oh, this is way more fun. This is way more fun. All right, and I haven't had any time to pinch myself, I'm focused on how do we, how do we, you know, keep growing? It's fun for you. Thanks very much. We'll be right back at this show with Michael Dells here inside theCUBE. Getting the hook. Thanks so much for watching. Thanks for spending the time sharing your insights. We'll be right back.