 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 back to Austin, everybody. Rainy Austin, it's raining sideways outside, but we're inside the comfort of the Austin Convention Center here at Dell World 2014. Matt Baker is here. He's the Director of Enterprise Strategy at Dell Mac. Good to see you again. Good to see you. Thanks for having me. I feel like I've arrived on theCUBE. Yeah, right, theCUBE is back. Sorry, it's like mid-coast Maine out there, but hopefully tomorrow will improve. We're from New England, so we're used to it. That's what I figured. You know, Matt, I was walking around the show last night, I was commenting on our open that you guys got one of everything, all kinds of cool technologies, but really what I wanted to start with is to talk about what's happening with the customer. Michael Dell is really focused on the customer. He always talks about that. He always defaults back to the customer, which I love. Many investors don't care about the customer, they care about the results, but we all know their money comes from the customers being happy. So I want to talk about what's happening, because you see IBM selling its low-end X86 business. You see HP splitting up, Symantec splitting up, eBay and PayPal. You see Apple getting into the financial services business, all kinds of weird tectonic shifts going on that are changing businesses, changing business processes. What are you seeing from the Dell customer base? Well, I think that what's happening is we're seeing a tectonic shift in the customers, and we're seeing a lot of reaction from the industry. So the way that I like to think about it is, is that a lot of the hype and hoopla that we're hearing about technologies, all of these buzzwords is really being driven by what I like to call this big digital wave of disruption. And you'll hear people talking about it, most of the analysts, you'll hear the result of it being things from folks like IDC talk about the third platform, et cetera. But I really think that it's all about this notion of digital disruption, driving businesses to react, and that's requiring new technology and therefore requiring vendors in the world to react to it. Some are taking a very services-driven approach. I think that's what you're seeing from IBM, pivoting more towards cloud, their apps business, et cetera. And you're seeing others basically trying to cope with that change. We spend a lot of time with customers, as you said in the intro with Michael. We all do, given our direct heritage, we spend a lot of time with customers and what we're hearing from them is they're coping with a lot of pressure, not just the IT shop, but the business itself reacting to new digital business models. It's not just entertainment and media, it's not just digital advertising. It's starting to go through the entire space and with it, driving technology change. So you mentioned IBM services led and they're trying to sort of transform into different buckets. You guys got a substantial services business as well. I mean, the former Perot business is now under Dell many, many billions. I mean, I think at last public look, it was close to 10 billion, as I recall, it was substantial and sticky. So help us understand from a strategy standpoint how you guys are approaching that customer transformation. Well, I think that you'll hear Michael talk about this notion of TCIP or transform, connect and form protect. We're not talking about cloud big data, although we will talk about this things of course, but we feel that those are the actions that our customers are having to go through. They have to transform their business and at the same time transform their technology. They have to connect, it's a connected world. All of this digital disruption is largely being driven by a connected consumer and the connected business. Inform, you know, most of these new business models, these digital business models are driven by data analytics and understanding your customer better, understanding what's going on. And of course, with everything moving online, all business models moving online, protect obviously is an important part of it. Services is, you know, we've had a historical strength in healthcare and what area has been experiencing significant digital disruption around EMR and other digital models for, you know, managing the healthcare system? So, I want to actually ask you to comment on something because if you look at industries historically, they build their own stacks, let's call them stacks, where they have their own design, production, manufacturing, distribution, sales, partnerships, ecosystem, and it's pretty hardened. Financial services, healthcare, media, entertainment, et cetera. And people generally stay in those businesses their whole lives because that's what they know and as they say, it's a hardened stack. It feels like that's changing where you've got these horizontal technologies transporting data across these industries, the cloud with infrastructures of service, you talk about protection and increasingly security is going out external data now and insights, social media, the connection point, the C in your TCIP. What do you think about that notion that there's this digital matrix emerging and companies like Uber and Airbnb and Netflix are riding on top of that and really changing industries? Well, I think that, you know, for a long time, technology and IT was not a factory or a platform inside business. It was a cost center to facilitate business models. Nowadays, technology is the business model in many cases and if it's not in your company, there's likely going to be a new entrant in your space that is executing against that with a business model that's enabled by technology. And that's why I say we need to talk about business process in many ways more than technology because it's the mating of new business processes with new technologies that enable new business models that's a real disruptive force. That's what I think we see going on. And therefore, these broad horizontal platforms, I mean, the internet is a broad horizontal platform. The data centers that sit upon it and the high-speed data networks all pulling it all together create this pond of technology on which you can float really interesting and new business models. And I see that that horizontal is what we're seeing. And it doesn't necessarily mean it's, you know, Nicholas Carr big switch thing. Everyone's going to go and it's all going to six large data centers around the world. But what I think it means is that technology itself is the platform, data is the platform. And therefore, the horizontals that connect it all together are sort of disrupting these very rigid stacks. I mean, you see it with entertainment and media which was probably ground zero of the first major digital disruption was one where you saw a technology company saw an opportunity with digital distribution and it basically ran roughshod over the existing business models. And those have created new business models with it when the advertising marketplace which I would say today powers much of the sort of what we would think as public cloud users is all of the ad market space around it. So we see that sort of spreading around. This is a digital platform that new business models float upon and the best, you know, the businesses that are most successful are the ones that can navigate that transition. And that's what our message is, helping customers navigate that transition through transform, connect and form protect. And you know, I think what Dell has done best for our entire life is that we add velocity to change for customers. Lots of technologies start, they're difficult, expensive, outside the scope of a certain skill set and we help customers ride that wave rather than get inundated by that wave by addressing complexity, we brought a really interesting play to the storage market many years ago working with EMC at first and then on our own to take SAN and make it really simple, right at the time when virtualization was taking off and everyone needed SANs in order to do the cool stuff that virtualization does. So, you know, we're all about creating velocity for technology and driving the time to business value for the most number of customers way down. That's what we do. We're a democratizer of technology. Yeah, Matt, that's interesting. And I think back to, you know, how Dell helped enterprise adopt technology. If we dial back, you've been with Dell about 10 years now. Yes, indeed. And, you know, you guys were the platform, you guys were the servers that if I deployed, you know, Microsoft or VMware on top of today, you know, some of those new platforms, you guys are still partnering with Microsoft, with VMware, you're also partnering with Google and Amazon on some of the cloud pieces. So if there's the new platforms that you guys aren't owning and there's also the applications that you guys are partnering with, you know, is it really, it's the services? What are you guys owning it? Why does someone come to Dell? What's the new Dell to bring these solutions to the enterprise? Well, I think that every, you know, that one, I mentioned this notion of the big switch which I don't believe there'll be ultimately this massive switch. There will be switches, many switches and we'll reach an equilibrium, right? So you think Nick Carr's wrong again? No, we don't have to go there. No, Carr's, whatever. We love Nick. But I think the opposite of that though is, and this is how early on when we talked about the cloud, we talked about it with two poles. One was Carr, big switch, the other was the notion of Anderson's long tail, right? So there's a long tail of providers out there. If you go look at the cloud today, two thirds of the revenue is in the long tail, not in the companies we talk about. So, moreover, you know, customers are going to be hybrid. They always have been. I mean, we still have people, you know, mainframe's still a big, it's a stack of technology. Things tend not to go away completely. They tend to be additive. And we see that in the mobile space today, cell phones, tablets, smartphones, et cetera. Nothing ever gets pushed away. So we think bringing our customers the mix of technology on-premise, off-premise, and helping them navigate what is going to continue to be a very broad set of solutions in the marketplace for some time to come. I mean, we are all about helping our customers adopt technology. We'll do that through services. We'll do that through our cloud marketplace type solutions. And we'll do that by selling them on-premise solutions that help them for their most business critical solutions that can't tolerate the milliseconds of delay. There's a place for all of these solutions, and that's why we're bringing all of those solutions together versus our competitors who I think are trying to subdivide these things out and go in a direction that ultimately, I think you need a broad-based provider to help make sense of this. It's still where Nick Carr is right, as IT is becoming a utility. Absolutely, but it's not necessarily six large data centers in the world. Yeah, and what I thought's interesting, actually, your afternoon keynote today is Andy McAfee and his co-author, Erica's last name I can't pronounce, and they actually- Bring Yeltsin. Thank you, Dave, MIT, our neck of the woods. And their premise is that, of course, there's going to be huge change in what jobs people do, and we have to adopt to those race against the machine to be able to find new jobs in new ways. So how's Dell helping customers move that transformation? Because we understand that if you're, some people have said, if your job today has administrator in the title, you're probably going to need to retrain in the next couple of years. Yeah, well, I think what we're, you know, in a lot of ways, what we've always done is try to take away a lot of the mundane and menial tasks. And early on, we had this notion of you, we have competitors who put, you know, a lot of tools out there. For every tool, there's a task, and there's thousands of tools. What we wanted to do is simplify the solution, take out away as many tools and tasks as possible, and compress the tasks down. Now, you see us delivering appliances for different types of applications. So a lot of that menial work that, I spent seven years in IT at Intel, and I remember building golden images and build blah, blah, blah, blah, blah. I mean, that, you know, that's what, that was only, oh, maybe it was a long time ago. But 15 years. It doesn't seem that long ago. But now, you know, I think I've, you know, I sat on a panel with you. I think that, you know, people in IT realize this and are starting to move towards where's the value. How do you drive more value for the business? And so what we're trying to do is automate or pre-configure or deliver solutions that take away the cruft that no longer is value at for them. And I think that that's one important part of it. I think that something that I, back to this notion of digital transformation is, you know, IT and the way we educate IT folks today either in MIS, CIS, CS, et cetera, we spend a lot of time and Mark and Dresen's going to get real mad at me because we spend a lot of time on programming and everyone says we need more programmers. I totally agree with that. But the one thing we need more of is people that can take technology and business and understand how to move from point A to point Z. It's that business process transformation. And we don't necessarily train IT folks, technologists to be business process transformation professionals. And I think that that puts them at a disadvantage. So from my perspective, you know, spending more time, the presentations I give, I try to spend very little time talking about cloud and instead talking about this digital wave of transformation. What I want to do, it's the big, you know, it's a huge wave. We see it as this monster wave. You're going to have to paddle and surf this thing. The problem with big waves is big wave surfers know is that some waves are too big to paddle into. So we want to be the dude on the jet ski who tows you into this monster wave and you can shred it all you want. That's Dell. We're creating velocity so you surf this wave of digital disruption. We're helping you through new solutions. We're helping you with services and we're focusing on what is not necessarily technology but the outcomes of technology, transform, connect and form protect. What's the bell curve of surfers look like? Because you certainly have the headlines like the Ubers get the headlines and the Netflix get the headlines but what about the everyday, you know, mid-sized customer? Where are they on that surfing bell curve? Are they on the big beaches? Are they at their own little patch of the world that they're surfing on? And how are you helping those guys? Well, I think that everybody is floating out on the ocean somewhere. And the question is are companies like Uber, other surfers? Or are they in fact the tectonic drop that created the tsunami of change, right? I don't know quite what to make of that but I think every business is facing some degree of digital disruption and mid-market customers are, you know, really needing to navigate that. I think they're trying to make sense of all this technology and I think, you know, if you look at the statistics on business there's a lot of companies, new companies, younger than five years old creating jobs but 70% of the U.S. workforce is employed by companies that are 16 years or older and it's always been that way. So there are, most of us are in companies that need to go through this transformation and what we're doing is, you know, we are strong in the mid-market. That's why I think our message is a little bit different around transform, connect and form, protect. It's not you got to adopt cloud immediately. You got to get on top of big data immediately. We deliver all those technologies and we've been way out in front of some of them, many of them. But what we're saying is what comes first? What's your business facing? Let's understand it. We work with our partners and VARS to where they have specialization of helping those customers. So I think we're real focused on helping customers navigate this change, create that velocity that I talked about and, you know, drive change in their own business and be those change makers. In the mid-market, CEOs get this in your view. Is that right? I mean, that's a question. I think they get that there's change, that all of these new models, they're users of technology. If you can't own a smartphone and not sort of intuitively get it. So I just think they need a little bit more help on how you put the pieces and parts together and that's where we come in. And they need somebody to help them de-risk it. All right. Absolutely. We got to leave it there, but I'll give you the last word. Bumper sticker on Dell World 2014. I know we're sort of, we've got some time to go. We've got the big keynotes coming up in just a moment, but what do you think this year is all about at Dell World? What's the bumper sticker? Well, I think, you know, the bumper sticker's Dell strong. We're there for you, we're there for you end to end. You know, in a times of a lot of turmoil, you sort of talked about that. We're a steady force, we're here. All right, Matt Baker, thanks very much for coming on theCUBE. Keep it right there, everybody. We got the keynotes coming up. We got guests wall to wall all day. Stu Minimanai will be back. This is theCUBE. We're live from Dell World 2014 in Austin. We'll be right back.