 theCUBE presents Dell Technologies World, brought to you by Dell. Welcome back to theCUBE's coverage day one, Dell Technologies World, live from Las Vegas at the Venetian. Lisa Martin here with Dave Vellante and John Furrier. Guys, let's talk, first of all, first time back in person since Dell Tech World 2019. Lots going on, lots of news today. I'm going to start with you, Dave, since you're closest to me. What are some of the things that have impressed you at this first in-person event in three years? Well, the first thing I want to say is, so John and I, we started theCUBE in 2010, John, right? In Boston, EMC World, now, of course, Dell owns EMC, so wow, it's good to be back here. Dell built this beautiful set. I'd say the number one thing that surprised me was how many people were here. Airport was packed, cab lines, the line at the Palazzo, the hotel to get in was probably an hour long. And I thought there'd be maybe 5,000 people here. I would say it's closer to eight. So the hall was packed today, and everybody was pumped. Michael Dell was so happy to be up on stage. He talked, I don't know if you guys saw his keynote, I mean, he basically talked, obviously, how great it is to be back, but he talked about their mission-building technologies that enable the better human condition. That was a big, you know, chewy words, right? And then they got into all the cool stuff they're doing, so we can get into it. But they had CVS up on stage, they had USAAA on stage. A big theme was trust, which of course, if you're Dell, you know, you want people to trust you. I guess the other thing is, this is the first live event that they've had since the VMware spin. Right. So in 2019, they owned VMware. VMware is no longer part of the income statement. Dell had a ton of debt back then. Now Dell's balance sheet looks actually better than VMware's because they restructured everything. And so it's a world without VMware, where now with VMware, their gross margins were in the 30 plus percent range, now they're down to 20%. So we're now asking, what's next for Dell? And they stood up on stage, we can talk about it some more, but a lot of multi-cloud, a lot of cyber resilience, obviously big themes around Apex, you know, hybrid work, John. So let's get into that. What's some of the key things that you heard today? Well, first of all, the customers on stage are always great. Dell's technology's 10 years for theCUBE and their history. I saw something back here 25 years with celebrating precision. The history of Michael Dell's journey and the current Dell technologies with EMC folded in and a little bit of VMware DNA still in there, even though they're separated out, just has a loyal set of customers. And you're room the hallways here, you see a lot of people know Dell, love Dell. Michael Dell himself was proud to talk before the event about he's number one Dave in PC market share. That's been his goal to beat HP for years. And so he's got that done, but they're transforming their business because they have to. The data center is now cloud. Cloud is now the distributed computing. Dell has all the piece parts, Dave. We've covered this three years ago. Now it's turned into multi-cloud, which is multi-vendor as a service is how the consumers consume innovate with data. That's kind of the raw material, future of work. And I'll see the partners that they have. So I think Dell is going to continue to maintain the news of being the great in the front lines as a data center slash enterprise now cloud edge player. So I'm impressed with their constant reinvention of the company and the news hits all the cards. Snowflake partnership, cutting edge company in the cloud. Partnerships, no flake Apex their product that's innovating at the edge. This new kind of product that's going to bring it together, unifying all those teams Dave we're all hitting the marks. Chuck Whitten up on stage, obviously he was the multi-cloud conversation. And I think the vision that they're laying out and Jeff Clark talked about it as well is a term that John and I coined. We can't remember who coined it, John or me. Super cloud. And they're talking about building an abstraction layer, building on top of the clouds, connecting on-prem to the clouds, across clouds, out to the edge, hiding the underlying complexity, Dell managing all that. That's their vision. It's aspirational today, but that really is super cloud. And it's more than multi-cloud. You coined the term super cloud. We rift together, I call it sub-cloud. Like sub-cloud. And I said, no, it's going to float over, super. Superman flies. That's right. Sub-cloud, not really a good name. I don't want to be sub of anything. I think my kid gave it to me, John, actually. We do know that Michael Dell watches theCube. He's been on theCube many times. He watches theCube. Clearly he's paying attention. Yeah, well, I hope so. I mean, we write a lot about this and we talk to a lot of customers and talk to a lot of people. But let's talk about the announcements if we can. So the Apex Cyber Recovery Service, ransomware recovery, they're now also running that on AWS and Azure. So that's big. We heard Presidio, they were super thrilled about that. So the thing I'd say about that is, Dell used to be really defensive about cloud. Now that I think they're leaning in, they're saying, hey, we're not going to spend, Charles Fitzgerald, the snarky guy, does some good work on CapEx. I mean, you look at how much the cloud guys are spending on CapEx of your 30, 40 billion. They can't compete. On cloud CapEx. Dell doesn't want to compete. They can't compete. Build on top of that. So that's a gift. So that's cool. For you mentioned the Snowflake announcement, I thought that was big. What that is, it's very interesting. So Frank Schlubin has always said, we're not doing a half way house, we're in the cloud. Okay, so square that circle for me. Now Snowflake's coming on prem. Oh yeah, what they're doing is allowing customers to keep data in a Dell object store, ECS or other object stores, and but use Snowflake. So non-native Snowflake data on prem. So that expands Snowflake cloud. What it also does is give Dell a little sizzle, a little better partner, and there's a path to cloud migration if that's where the customers want to go. I mean, I would say that that's a dangerous game because we've seen that movie before, VMware and AWS. Yeah, but we've talked about this. Don't you think that was the right move for VMware? At the time, but if you don't nurture the relationship, AWS will take all those customers ultimately from VMware. But that product's still doing very well. We'll see it with NetApp as another one. NetApp on AWS, I forget what they call it, but yeah, File on AWS. So that was, go ahead. I was just saying, what's the impact to Snowflake? Why do you think Snowflake chose Dell? Because Dell's a $101 billion company, and they have a huge distribution channel, and a lot of common customers. They own storage on the premise. Yep. And so Snowflake's looking for storage options on which they can bring data into their cloud. I mean, Snowflake wants the data to go from on-prem into the cloud. There's no question about that. And I would add another thing is that Snowflake can't do what Dell technologies does on premises with storage, and Dell can't do what Snowflake's doing. So I think it's a mutual short-term and medium-term benefit to say, hey, you want to run at Snowflake, use some services, they're great, but come back and use Dell. So that to me, I think it's a win-win for Snowflake. Just the dangerous game is whoever can develop the higher-level services in the cloud will ultimately be the winner. But I think the thing I would say there is, as I said, Snowflake would love for the migration to occur, but they realize it's not always going to happen. And so why not partner with a company like Dell, you know, start that pipeline? And for Dell, hey, you know, why fight fashion, as Jeremy Burton would say. The other thing was Project Alpine, which is File, Block, and Object across cloud. That's again, setting up this super cloud. And then Apex. I mean, Apex is the discussion. We had a one-on-one session, a bunch of analysts with Jeff Boudreau who runs ISG. We were supposed to be talking about ISG, all we talked about is Apex. Then we had another session with Apex, and all we talked about, of course, is Apex. So they're still figuring that out, I would say, at this point. You don't quite have product market fit, and I think they'd admit that, but they're working hard on scaling engineering, trying to figure out the channel model, the compensation. You know, taking their time, but moving fast, if you know what I mean. I mean, Dave, I think the big trend that's jumping out of me here is that something that we've been covering, the headless cloud. Meaning if you can do as a service, which is one of Dell's major points today, that to me, everyone is a pass layer. I think everyone that's building digital transformation apps has to be their own SaaS. So they either do that with somebody, a managed service which fits beautifully into that trend, or do it on. Now e-commerce has this nailed down. Shopify, or build your own on top of the cloud. So headless retail is a hot trend. You're going to start to see that come into the enterprise where the enterprise can have their cake and eat it too, and take advantage of managed services, where they don't have expertise. So those two things right there, I think it's going to drive a lot of growth for Dell. So essentially, Lisa, what Dell is going to say, okay, the timing's good with the VMware spin. They said, now we're going to build our own cloud as a service, Apex, and they're starting with infrastructure as a service. You know, storage as a service, obviously, cyber recovery as a service. So you're going to get compute and storage and data protection. Eventually, they'll move into other areas. And it's really important for them to do that to have their own cloud, but they've got to build up the ecosystem. Snowflake is a small example. My view, they need hundreds and hundreds of snowflakes to fill the gaps, you know, move up the stack in middleware and database and DevOps. I mean, they should be partnering with HashiCorp. They should be partnering with all these companies that do DevOps stuff. They should be, I'd like to see them, frankly, partner with competitors to their data protection group. Sounds crazy, but if you're going to build a cloud, look at AWS, they partner with everybody, right? And so that's what a true cloud experience looks like. You've got this huge menu. And so I think Dell's going to have to try to differentiate from HPE. HPE was first, right? And they're all in. Dell's saying, we're going to let the customers tell us where to go. And so I think one differentiation is their ecosystem, their ability to build that ecosystem. Yeah, but HPE's got a good distribution channel too, not just for themselves. They all got the assets, but they're transforming. So I think at the end of the day, as Dell and even HPE transforms, they got to solve the customer problems and reduce the complexity. So again, the managed services piece with APEX is huge. I think having the building blocks for multi-hybrid cloud at the edge, just you can't go wrong with that if the customers can deploy it and consume it. What were some of the messages that you heard from, you mentioned CVS on stage, USAA on stage. Dell has always been very, very customer focused. I've got some great brands. What did you hear from that customer's voice that shows you they're going in the right direction? Well, first of all, customers are longstanding customers of Dell technology. So that's one recognition of the ongoing partnerships. But they're also messaged up with Dell's messaging, right, to tell them the Dell story. And what I heard from the Dell story was moving fast and reducing complexities to number one goal. They see the cloud option has to be there, cloud native. Edge came up a little bit and the role of data. So I think all the new application development today that's relevant has a data as code kind of concept. Data engineering is the hottest skill set on the planet right now. And data engineering is not data science. So you start to see top level CISOs and CIOs saying the new modern applications have to have data embedded in. It's just too hard. It's too hard to find an engineering team. So I heard the customer saying we love the direction, we love the managed services. And by the way, we want to have that supply chain and cyber risk reduced. So yeah, big, big endorsement for Dell. You know, the biggest transformation in Dell, two biggest transformations, one was the financials. You know, the income statement is totally to 101 billion dollar company growing at 17% a year. That's actually quite remarkable. But the flip side of that, the other big transformation was the customer. And but with the acquisition of EMC, but specifically VMware, it changed the whole conversation for Dell with customers. I think pre 2015, you wouldn't have had that type of narrative up on stage with customers. Because it was, you know, compelling and it was equal logic and it was small businesses. Now you're talking about really deep strategic relationships that were enabled by that transformation. So my point is to answer your question, it's going to be really interesting to see what happens post VMware because when VMware came together with Dell, the industry didn't like it. The VMware ecosystem was like, ah, we're going to tell. Okay, but customers loved it, right? And that's one of the things I heard on stage today. They didn't say, oh well, we love the VMware, but he mentioned VMware, the CTO from USAA. So Dell configured this commercial agreement with VMware. Michael Dell is the chairman of both companies. So that was part of the incentive. The other incentive is Dell is the number one distribution channel for VMware. So I think they now have that muscle memory in place where they've earned that trust. And I think that will continue on past the spin. It was actually quite brilliant the way they've orchestrated that. Yeah, Lisa, one more thing I want to add to that is that what I heard also was, you had the classic, here's how you'd be a leader in the modern era, it's a big leadership message. But then when you heard some of the notes, software-defined, multi-cloud, with an emphasis on operations, Dave. So, okay, if you're a good leader, stay with Dell in operations. So you see strategy and operations kind of coming together around cloud, but big software-defined, multi-cloud data, operational story. And I think those customers are kind of on that. You got to maintain your operations. DevOps is operations, DevSecOps is operations. So don't get too greedy on the modern shiny new toy in the cloud. Yeah, it's a safe bet, right, for infrastructure. I mean, HPE's a good bet too, but I mean Dell's got a way broader portfolio, bigger supply chain, it's got the end-to-end with the desktop laptop, the client-side business, a bigger services organization. And now the big challenge in my mind for Dell is, okay, what's next? And I think they got to get into data management, obviously build up as a service, build up their cloud. They need software in their portfolio. I mean, 20% gross margin company, it's just Wall Street's not as interested. You know, if they want to build more value, which they do, they've got to get more into software. And I think you're going to see that. I think you're going to see more M&A. I'd love to see more organic R&D instead of stock buybacks, but I get why they have to do that. Well, one of the things I'm looking at Dave in terms of what I think the future impact's going to be is the generational shift with the Gen Z and millennials running IT in the modern era, not your old school rack and stack data center mentality. And then ultimately the scoreboard will determine, in my mind, the winner in their race is, what, where are the workloads running? Right, the workloads, and then also, what's the application development scene look like? What do the apps look like? What are they building on? What's scaling them? What's running them? Edge is going to be a big part of that. So to me, operations, edge workloads and the development, and then the workforce shift. And I do think Edge, I'm glad you brought up Edge. Edge is so fragmented, but I think there's going to be a massive opportunity in Edge. There's going to be so much compute at the Edge. Dell talked about it so much data. It's unclear to me right now how they go after that other than in pockets, like we heard from Gil. I believe they're going to do really well in retail. No question there. There's so much other industrial IoT. The telco space of the towers, Edge. And Dell's, you know, Dell's server business, okay, it's Intel and AMD inside, okay, great. Their high margins come from storage, not from compute. Not the case with AWS. AWS had 35% operating margins last quarter. Oracle and Microsoft, that's the level that they're at. I'd love to see Dell figure out a way to get paid more for their compute expertise. And that's going to take some R&D. Yeah, yeah. Last question guys, as we wrap up our wrap of day one, given everything that we've all been through the last couple of years, what is your overall summary of what Dell announced today, the vibe of the show? How well have they fared the last two years? Well, I mean, they've had a remarkable last two years. And a large part, thanks to the client business, I think today you're seeing, you know, them lift the veil on what's next. And I think their story is coherent. There's, again, financially, they're a much more sound company, much better balance sheet, not the most attractive income statement from a margin standpoint, and they got work to do there. But wow, as far as driving revenue, they know how to sell. Yeah, I mean, to me, I think, looking back to before the pandemic, when we were here on stage last, we were talking end-to-end Dell leadership. And I say the biggest thing is Dell's catching up fast, faster than I thought. And I think they've got to, they're skating through where the puck is going, Dave, and I'll tell you why. The end-to-end, I thought, wouldn't be a total flyer if the edge got too dynamic. But the fact that the edge is growing so fast, it's more complex, that's actually given Dell more time. So to me, what I see happening is Dell having that extra time to nail the edge piece, because once they, if they get there, if they get there, then they'll have their core competency. And why do I say that? Because hardware is back. Server god boxes are going to be back. You're going to see servers at the edge. And look at the failure of Amazon's Outpost, okay? Amazon's Outpost was essentially hardware. That's Dell's business. So you talk about like compute as a cloud, but they really didn't do well with deploying compute, like Dell does with servers. EKS is kicking ass at the edge. So serverless with hardware, I think is going to be the killer solution at the edge. A combination of cloud and edge hardware, and the edge looks more like a data center than the cloud looks like the data center. So. You're saying hardware matters? Hardwarematters.com. I think that's what I heard. Hardwarematters.com, check out that site coming soon. I think it matters more than ever. You know, I'll just say this. Blockchain, silicon advances? I think, the reason hardware matters is because it's barbelling. It's going from the box to the silicon, and it's going upstream at the software defined. Horizontally scalability means good silicon at the edge, end of the cover, scaling all the stuff. And then machine learning and AI in the application. So we've said this on theCUBE now, what, five years now. Guys, we get an action pack tonight, tonight, two days tomorrow and Wednesday. Michael Dell is on tomorrow. Chuck Whitton is on. Jeff Clark, et cetera, et cetera. Caitlin Gordon is on Wednesday. All the heavy hitters are coming on. They're coming on. They're going to be. Allison Dews coming on. We're going to talk about the Matthew McConaughey interview, which was, I thought, fantastic. JJ Davis is coming on. So we're going to have a great channel discussion as well with Cheryl Cook. That's right. A lot of the product people are coming on. We're going to be talking Apex. It's going to be good with cyber recovery. The storage alchemist is coming on, John. Boy, I can't wait to see that one. We'll stick around, guys, for our coverage all day tomorrow, Tuesday and Wednesday. Lisa Martin with Dave Vellante and John Furrier coming to you live from the Venetian in Las Vegas. This is Dell Technologies World 2022. We look forward to seeing you tomorrow and the next day.