 Live from the Austin Convention Center in Austin, Texas, it's theCUBE at Dell World 2014. Here are your hosts, Dave Vellante and Stu Miniman. Welcome to Austin, everybody. This is Dell World 2014 and this is theCUBE. Stu Miniman and I will be broadcasting today and tomorrow live from the show floor in Austin. This is Dell World Dell's big customer event. I think it's the third or fourth year that they've actually done this, Stu. And of course, the big transformation of Dell has occurred last year at Dell World. Dell had just gone private, late October last year, Dell became a private company. And after a long protracted fight with what Michael Dell calls, the person Michael Dell calls the great icon. And so Michael Dell won that battle and now on 75% of Dell, the company he founded in a dorm room when he was 18 years old, one of the fastest companies ever to get to a billion dollars. The situation since that time has been all rosy from what we can tell, although we can't unpack the numbers. Michael Dell has been very vocal about life as a private company. Michael Dell's coming on tomorrow and we're going to talk to him about what it's like to be a private company but he's come out recently talking about how in the last quarter the company's PC revenue has grown 19%, while the rest of the industry, if you take Dell out of that, he's growing it, I don't know, 0.2% basically flat. And so he's very, very excited. Of course, there've been some cutbacks at Dell, there've been some layoffs. So, but nobody really- Dell wouldn't use the term layoffs though. Yeah, well. Okay, but there's been some head count reduction, I should say, right? Actually, it wasn't a forced layoff. I believe it was through attrition and some incentives, right? So in fact, you talk about this, Michael Dell addressed that yesterday. But the point is there, I said this and have said this for quite some time now. Dell, when it was public, was about a $60 billion company trading at about 50 to 60 cents on the revenue dollar. Just for comparison, IBM probably trades at two cents on the revenue dollar. EMC, up three to four cents on the revenue dollar because of VMware. Software companies like Oracle will trade it, as I said, eight cents, eight dollars on the revenue dollar. Oracle will trade it eight to 10 times revenue. So software companies have that higher, multiple. Dell was trading a fraction of its revenue, as does HP, bad sign in the industry. What was happening is since 2008, Dell, Stu, has been a work in process, transforming the company, going on a $13 billion buying spree, purchasing companies like Perot for $4 billion and the likes of Equalogic and Compellent to get into the storage business, acquiring assets and networking. And so it really was transforming outside of PCs when it was public. Dell had about a 20 to 25 billion dollar company revenue outside of personal computers and that's growing. My estimates are it's pushing close to 30 billion. The problem is it wasn't happening fast enough. The headlines were all focused on the decline in the PC market. Michael Dell has called this a plague of short-term thinking because of a 90 day shot clock that he had to be up against. What a turn events, Stu, since the 1980s, 1990s when of course Michael Dell was the darling of Wall Street. Yeah, Dave, absolutely. When we talk about what's been going on in IT, companies are trying to transform from just cutting costs to actually creating new business value. So the privatization is going to allow Dell to really reinvent themselves and change and move a lot faster to capture those trends of cloud, mobile, big data, social, which Dell had pieces of those but they had to really go up through the chain and answer to Wall Street and go through a lot of bureaucracy and the message coming from Dell is now that they don't have to answer to, as you said, the 90 day shot clock, they can move much faster, take advantage of the solutions. What they talked about at the media launch yesterday was that they can listen to customers and act fast rather than taking a year to get back to them. Let's go from the idea to getting something in your hands couple of weeks or a month. So new technologies and new solutions to kind of get out there. A lot of announcements this week that I know we're going to dig into with our slated guests here, talking about the Dell cloud marketplace, hyper-converged solutions, big data software offerings that are out there. And it's interesting to see where Dell is because Dave, you've talked about a lot. Companies work off of their free cash flow and the PC business really delivers a lot of cash into Dell and that helps allow them to drive new innovations and new solutions that they can work to grow. But at the same point, Dell's making a lot of bets and a lot of people are watching is like, okay, well, what is Dell at its heart? They really moved from being somebody that took about a bunch of components, made it easy to order and easy to ship to bring things in how, as you mentioned, the equilogic and compelling acquisitions and you've got things like Bumi. How is what is Dell going to create versus what is Dell going to enable? The cloud marketplace that they have is leveraging Google and AWS, Enjoyant, but Dell doesn't own its own data centers. So what does Dell own? What does Dell deliver? What's the role of the channel? A lot of stuff for us to unpack here. We're going to talk about that. We're going to try to help people better understand Dell's strategy. I mean, it seems to me, Stu, that their strategy really is to make it easy to do business in virtually any sector, whether it's personal computers or enterprise products that were walking around the floor here last night. Dell essentially has one of everything. It's got big data. It's got converged infrastructure. It has servers. It has storage. It has networking solutions. It's got services. It's got, you know, booth on internet of things. I mean, virtually anything you could think of that's driving enterprise hardware and software with the exception of applications and the database and middleware layer, anything below that, infrastructure-related security, Dell's got it. Actually, Dave, they don't have one. They usually have three bets. They're networking. They're doing an open networking initiative. So they have their force-ten hardware. They're partnering with Cumulus. They're working with other suppliers to give people a choice out there. Microsoft's a big partner. Red Hat's an important partner. VMware is an important partner. Oracle. And then from the application side, absolutely. Oracle and SAP and Microsoft are all big players. So, you know, they don't own the next-generation application, but how are they going to enable some of those environments? So it's interesting for a company like, I shout out Oracle here. Oracle, as you know, exited the low-end x86 server business, basically saying we want to chase profits, not revenue. Dell loves that business. You know, Dell, Compact, some others sort of invented that business. So they know how to make money with low-cost x86 servers. IBM doesn't. IBM, that's why IBM exited the business. So it'll be interesting to see how that dynamic occurs. But if you look at Dell's business, Stu, just prior to them going private, they had an enterprise solutions business, which was running at about three billion a quarter. Maybe 12 to $15 billion a year. A services business that was about $10 billion a year. A cloud business, what they call the cloud business, which was less than a billion. It was probably running at two to three billion a year. And then they had a software business, which was quite small. You know, probably around $1 billion a year. But you add those up. They've got about a $30 billion business today. And it's approaching $30 billion. It's tough. We don't get the numbers anymore. We don't get to see that stuff. But the interesting story, as you pointed out, with Dell was cash flow. Dell threw off tons of cash, particularly from its PC business. Its operating cash flow was probably about three to 3.5 billion the quarter that had exited the public markets. Now, here's the interesting things, Stu. As I said, they, oh, by the way, they had $13 billion in cash, which I think they used some of that to restructure the company. But the point is, Dell was a cash machine. And as I said, they went on a $13 billion buying spree over the last several years. What would happen is Dell would use its cash flow to fund these acquisitions. Now, what some competitors have said as well, Dell can't make those acquisitions anymore because it's going to have to pay off its debt service. However, what Michael Dell has said is, well, I don't have to do dividends anymore. I don't have to do stock buybacks. So I can still fund those acquisitions. So that's something that we want to better understand and ask about, can they still execute an M&A strategy as effectively, as a private company as they could as a public company? Yeah, absolutely, Dave. And so many competitive angles that we're going to need to go through. As you said, Dell is one of the few that owns their whole business. IBM sold off their X86 business. HP just split into two pieces from the consumer and the enterprise. Dell spans that consumer and enterprise with both the PC business, the tablets. Michael Dell said that Dell will not really enter the smartphone piece, but they'll own the tablets and they'll own a lot of applications. The cloud marketplace will help for a lot of those environments. So it's tough, there's very few companies that can really span that consumer and enterprise market, even though if you look at the big cloud guys, Amazon and Google and Microsoft all have touchpoints on the consumer side that give them scale and reach across the globe. Now the other piece, the other big change in Dell is the channel. Dell has been reaching out to the channel for the last couple of years. I mean, there's been a channel land grab, as you know, Stu, and virtually every company in the enterprise has been reaching out to the channel. About 40% of Dell's revenue now goes through the channel. And that's a big change. Of course, Dell is the direct company, right? They basically cut out the middleman. Well, they've been reaching out to the middleman. And of course, the channel initially, I think was very skeptical. I talked to Dorothy Rosenthal last night. She's a channel expert, former IDC colleague of mine. And she said, she confirmed, Dell is serious about the channel and they're actually doing a really good job with the channel. So that's another fundamental. We've seen companies like NetApp completely transform EMC, another one. IBM, obviously, HP, strong channel presence, really change the way in which they're operating from a sales and distribution standpoint, Dell taking a similar page out of that playbook. Yeah, Dave, absolutely. You know an area that I focus a lot on is the converged infrastructure piece. And Dell has an OEM solution with Nutanix, which they announced it's the Dell XC platform. I believe it's called Powered by Nutanix Software. Actually, I have some brand new research on the Wikibon site talking about how a fully integrated stack, which the Dell CCC group not only takes their server and the Nutanix hardware, but actually puts in the hypervisor and the VDI manager in that entire solution. So it goes to market and that's a channel built solution. Nutanix was built on driving the channel solution and Dell's going to help enhance that. The other solutions that they have are going to expand on that. All right, Stu, keep it right there, everybody. We'll be back with our next guest right after this. This is Dell World 2014. This is theCUBE, we'll be right back.