 This is SiliconAngle.com's theCUBE, our flagship telecast. We go out to the events, extract the signal from the noise. This is our third year at VMworld. theCUBE started in 2010, and now it's 2012. A lot's changed. I'm John Furrier, the founder of SiliconAngle.com, and I'm joined with my co-host. I'm Dave Vellante at wikibon.org, and we're here with our friend, Cube alum, Tarkin Maynard, who we knew, we first met you and you were wise. Sold your company to Dell, congratulations, and welcome back. Thank you, thank you. So you got demoted, you got demoted, I'm sorry to hear that. For sure, for sure. So tell us, so tell us the scoop, so what went down on the acquisition? Take us through quickly for the folks out there who are interested in how this all goes down. What happened? So first of all, I want to thank all thousands of people in the room right now in the audience. Phenomenal day, great to see you guys both. Last time we were at the VMworld again, I believe 12 months ago. So let me give a little bit context, because you guys know what the story is, but for the folks out there, over the past seven years, as you all know, we made a big turnaround with WISE, a brand, a company, been around for 30 plus years, 31 years since 1981. Yeah. The company invented the think line concept, the zero client concept over the past 15, 20 years, basically going after the PC business, fat client versus the think line, zero client, 300 watts versus five watts, completely green, basically redefining the desktop virtualization and with that, a cloud-connected client business, what we call cloud-client computing business and market and redefining that market itself. So over the past seven years, as we're growing, as we've been growing our business crazy, year after year. The last year, from 10 to 11, we almost grew 60% year over year, both on margin and as well as on the top line revenue. As part of that, we've been partnered with Dell for the past seven years. Nearly 10, 15% of our revenue came from Dell channel. Dell was one of our channel partners, put our thin devices. Obviously, Dell is second to none on PC business, so every business storage, networking, buying a lot of different companies, great cash position, transforming the business and we've been talking about, you know, deepening our relationship. We were doing some OEM discussions, going to market together. A lot of Fortune 500 businesses are buying our technology together, all those components. You were just talking about, you know, what is Fusion IO earlier? You know, what is Fusion IO is, you know, another great technology, basically making the full IT story, solution story complete. So Dell has a lot of those pieces. The pieces they were missing is obviously that thin, zero cloud connected device and software connectivity to the back end. So we were partnering very well and we decided, look, it makes more sense for us to have a relationship, one plus one equals three. I know I sound like a typical cliche CEO who sold the company. I really mean this. I just tweeted Michael Dell and said that you were on theCUBE and that I want to get him. I know he's here, he's in the building. I want to try to get him on. And I'll tell you, look, Dell is what? 60 billion dollar plus company is the founder of the company. Michael has been a great job coming back to business, putting his own footprint in the transformation. And I'll tell you, in a fun way, I tell this Michael all the time. The way I feel within Dell today, the way I felt with Vice five, six years ago, when we were doing this big transformation and moving and getting faster, more scalable, more flexible with the customers, delivering value through the chain of the partners. So you were channel constrained prior to Dell. So I'll tell you, this is the biggest, best kept secret in the industry. Dell is a very channel focused company. Oh, sure. I think I have 100,000 channel partners. And as you know, Vice, historically, full channel business, full channel business, 100%, now we're combining those resources. Truly is a one plus one equals three. I have to ask you because I took a chance, not took a chance, I did anyway. I went public and slammed this idiot blogger who wrote that Dell's debt, and they have no chance, and took a shot at Michael Dell, who is my age, and I've been, watched his career grow from the dorm room selling modems all the way up to being what he did. Great guy, big fan of what Michael Dell has done. This blogger tried to do a vanity fair kind of hit piece on Dell, saying that they basically suck. So I went out and said that's an idiotic move by the blogger at Panda Daily. And people just don't know about Dell. They see the PC business and they think, oh, they're going down, Dell isn't having anything. You turned around wise. Obviously, you've been anti-PC because you saw the future, right? So talk about why Dell isn't dead at all. Talk about that. So let me give you a little bit of context behind that. By the way, I don't, you know, bloggers here and there. I have no idea. There are tons of bloggers, right? A lot of things, some are factual. Some of it just, you know. This actually got a lot of play. So the bottom line is, I don't want to make a comment on something that I haven't read. I'm not just giving you a typical PRQ shade, but I have no idea what this guy wrote. But let me focus on this. Let me tell you at a high level. Beyond Dell and the, let's look at the industry today. IT industry is a home. This is very important. A lot of people miss this point. It's very important. Next interview, ask this question. Today, when you look at the IT space as a home, it's a 3.5 trillion dollar market. 3.5 with a T, T, trillion dollar market, of which 400 billion dollar is all about hardware. 300 billion is all software, IT software, and about 800 billion is all services. So that's 1.5 for you right there. Another two trillion dollars. Another two trillion dollars comes from all telecommunication services. Both hardware combines software with utility and all the services around telcos. What Verizon, AT&T, China Mobile does. So 3.5 trillion of that, about 1.5 trillion is all about IT, without the telcos side of things. Dell is what, 60 billion dollar company? It has about a 2% market share. There are probably another three or four companies like Dell. Let's look at that. Two percent market share, what? When you look at it, there's complete IT, everything combined. Are you following, right? Yeah, yeah, yeah. So 1.5 trillion dollar business. When you think about the leading companies, Cisco, let's look at obviously Dell, IBM, HP, let's add Oracle with the sun acquisition, but it's like a smaller company in terms of size. When you look at the industry, how can you discount the off? You must have no clue what's going on in the business to discount a giant like that. It's a, in a sense, is leading in the transformation from the PC business now and then end-to-end solution business. A lot of cash in the bank. Great cash position. Look at the industry right now. If you're a financial analyst, if you're an investor, where is the opportunity for upside? It's an amazing upside. And then me, by the way, let me tie this to one story. When me came to Dell as a business, a quiet, we're looking at this and going, as a team, we did not have one retention issue. All my employees are continuing with Dell because they're seeing this as a huge upside opportunity in the future. You've got a 60 billion dollar company with a 20 billion dollar market cap, right? So they're trading it, you know, cash position, it gives us flexibility. You saw the acquisitions from WISE, Ecologic, Compellants, Sonic Wall, all the viewers in the seven, we just bought quotes. You're building a software, you know? If Dell asks us, if Dell asks us my opinion, we could help them. But here's my angle. As an analyst. As an analyst. No, seriously. We can help you. You need to buy some of our scores. I buy what you say, but I want to just say this. Apple Computer has product leadership and only has 8% market share in the PC business and including PC, not including even mobile. Okay, so Apple's the most valuable company on the planet right now and they only have 8% market share. If they take that 8% market share on the hardware side to say 15 with their services that they're wrapping around it, that's going to be very interesting. So what I'd like to see from Dell and what I would advise them to do is help me understand how you can use the hardware business that they have great leadership in, keep that share and sequence and wrap around it, whether it's IT and other services. I love these simple questions you asked me so I can give you a great answer for this question. I love the piece of furniture you have on your desk with your Apple 300 Watts and a non-green PC that you have in front of you. I love them. Looks great. Actually, it looks great on my furniture as well. My furniture I have. Fantastic, but how many businesses you believe, how many public organizations and private organizations going to still continue invest heavily on infrastructure, which is not secure, which is not manageable, which is not reliable, which is not scalable, which does not provide better capex and OPEX. This device what, $1,000, $2,000, we do at Dell devices starting at $25 with cloud clients connecting to the best service storage and networking in the back end. We have the best store in the marketplace. Look, I was listening to Fusion Eye earlier. You have a phenomenal story with storage. What is the Fusion Eye conceptual when you think about it? At the end of the day, is another flash drive to your PC imagine it on a server for your storage. Fantastic story, great, but it's a piece of an overall story. As Dell, we are the only company. I have all the components. Have the cash position, acquire market OEM, also other assets with the new software franchise we're building as well. On the top of that, on the top of that, it is a big opportunity for the next 10 years as cloud becoming more prevalent and ubiquitous in the marketplace, both on the server side, networking side, and at the same time on the client side. Well, Michael Dell has taken this personally, right? I mean, he helped crush the mini computer age. I remember Ken Olson said Unix is snake oil. Digital died, Wang, Prime, all those guys. And I see the PC era CEOs put bomber in there. They have a lot of stake. They have a lot of personal pride. And Michael Dell got heavily involved in the company strategy and started personally getting involved in these acquisitions. Putting these piece parts together, whether it was Perot, the storage side, the thin client piece. But still, you've got that dynamic that I was talking about earlier. A $20 billion market cap for a $60 billion company because the old is declining faster than the new can pick up. And so you've got that dynamic going on. So it's a matter of, okay, when does that flip? When do you hit that typical point? Almost like a startup. Absolutely, and in a sense it is. And also not only in terms of size, but in terms of feeling the passion the employees have. I feel I'm in a $65 billion business, $60 billion business, everybody's acting like it's a $20 billion startup. And that kind of a passion goes a long way. Look, I was just this past weekend with a customer on email. It's a large New York based customer, big financial institution, trillions of transactions that we're working on. We're on email going back and forth. The customer goes, I cannot believe as Dell, you guys are so focused on a customer on a weekend, anybody who's touching us and talking to us about this transaction we're working on. So my point is, look, as long as you have the right product, right people, right processes, market is there. All I'm trying to tell you with the numbers, $3.5 trillion market, guys. It's a huge opportunity, a huge upside. We have the best cash position, best people, best acquisitions, and all the IP coming together, big software franchise now, and these devices at the end of the day do not matter. At the end of the day, these devices are gonna come and go. What's important is the delivering of the content. Any type of content, voice data video from any app, legacy to web to mobile to any user and manage that user from the cloud. And that's our vision. That's our story. 8 to 10. At Citrix Synergy, when you were on, you were really amplifying. You were probably one of our most passionate guests ever. Talk about the impact of mobile, obviously. Still am. Yeah, you know what I mean. Well, with mobile, now it's other things. But talk about your vision of the new experiences because big theme for Paul Moritz, got a standing ovation. He's awesome. I love all. This new era, new user experiences, new consumer, customer experiences. Talk about what you see as the new customer experience. So, I'm not gonna sound cliche, but this is really important. Every single customer. Public sector, private sector. As you guys know, for 50-50, we do a lot of business in the public sector. Defense side, also commercial side globally. But we're seen as people definitely going social, definitely mobile, definitely virtual, definitely, definitely converged. This is hugely important. A lot of people miss that. In the back end converged with storage, server, networking, computing, through virtualization of one fabric and also converged in the client. Imagine devices under 25 bucks delivering for you voice, data, video, one box under 10 watts which you don't need anymore power connection. It's all PoE, power over the internet, delivering to you in one monitor, your virtual PC, in one monitor, your voice over IP, phone capability, and one monitor is your TV with a GPU built into it. I have devices now with quad core, dual core, on devices running things that you never run before. With that kind of capability converged in the client side and the back end side, and going contextual with that in the client, is a story, which means me now dealing with a new kind of a labor force in our customers. They are definitely social. They're expecting their employees to connect with the customer and partner through social media. You need to secure and manage that. We have the solutions for that. They're definitely going obviously mobile. Every user like you, they have a laptop but going to these kind of devices and how you provide security, manageability, availability and TCO for that, both on capex and OPEX. And at the end, delivering any type of content, voice data, video, from any type of app for any user at home at work on the go. Some of the big banks you are doing business with, all the employees are going home. Work at home programs, now you need to deal and manage and secure the user regardless of those devices or these furniture pieces, you just 300 watts, not green. Did you hear me? Yeah, yeah, yeah. Purniture piece, 300 watts. Get rid of it, thin, clogged one. I got two in my bag. Are you saying these are going to consolidate? You know what we'll see is there are going to be all these devices, in my opinion, on the margin, on the innovation, there's going to be a lot of opportunities. But the key thing is how you deliver. But the key, guys, the key thing is content. Content is king. How can you deliver voice data, video to any user from any app on any device? All about that experience to me. What else? And do it in a smart way. Secure, manageable, available, reliable, with the best TCO and scale. To make that happen, you cannot have furniture pieces like this, you have to have an end-to-end security manageable story. Why are we buying, why are we buying Quest? Why did we do the transactions with Wise, Sonic Wall, Forstand, Case, Compellent, Ecologic. There's a storyline here. There's a storyline here. And we have the cash position to make the change happen. Tarkin, so I got to ask you, because since VMworld, going back to 2010, 2011, they kicked around end-user computing, VDI, all that stuff, but you've been involved in directly. And now with the market changing, we've had David Flynn on the CEO of FusionI, you were listening. His company is really changing what's now possible. So there's new possibilities, new use cases, new experiences. What does VMware and the industry have to do at the end-user computing? So you've got the data center of the future, multiple clouds, big data. All these are new forces that have been emerging very fast in the past 24 months. And now the end-user experience has changed. How is that whole world? What specifically, you got social cast? I wouldn't say VMware's knocking it out of the park at the time of the stack. I mean, they've got some stuff. Here's, here's, look, we don't have a long time, but I'll give you my two cents on this. Have you bought a new car lately? I mean, buy the new 2013 models, 2012 models. When you open the engine, what do you see? Do you see the spark plugs? Do you see the fusion IOs and the absences and the Atlantis computing of the world? All the innovation is built in. Look, my vision is, our vision is a company. When you look at this end-to-end, give this user experience from your iPhone or whatever device you like, all right? Whatever device you like in terms of aesthetics, application, software, security management, all the concepts that tie into you as a user, which is most important and accentuated through the content delivery, voice through the video, and app support in the backend, whatever that app is, on any device, from any kind of a data center, anywhere in the cloud, to make that experience seamless and as cheap as possible while making margin is the future. And we believe, we believe, we believe. As Del, we have the best converged story in the backend, best converged story in the network, and best converged story in terms of content, apps, and users in the front-end, in the client. And not only on our clients, our entire story on security management and availability is for any client. I have customers using iPhones and Apple devices. We still secure and manage them. We still deliver the content for them. We cannot necessarily look at this as a whole trend, specific to the device. It's beyond the device. It's all about the content and app, and that's what we're gonna focus on. Well, I want to think about Del, too, is that Del definitely doesn't have a not-advented here syndrome, right? Because Del didn't have any IP before it started on this track, so it buys in IP and it focuses on integration. That's where it's spent. I agree with your vision, Matt. So let me react to this for something. Look, I don't know how many patents each company has in the world, but let me tell you, there's a lot of misconceptions about Del. IP is not only the software that we think about, it's also processes and some of the things that a company does. That's for sure Del, probably historically, did not focus on software as an innovation as much as the pure software companies in the marketplace like Microsoft and Oracle. That was not a business model. It was a different business model. The beauty of Del is, created a segment, led in it, figured out that things are changing and now it's transforming itself over the past four years. With Michael's leadership and the executive team and all the changes we're making, and again, as I said this, I know I'm sounding like a broken record. There are a lot of CEOs you can bring to the stable and they can tell you a lot of stories, but guys, cash is king. We generate cash, we manage it effectively, we buy the right IP, then we believe the IP is needed and we're building the right IP with the best people in the industry now. So look, Del is gonna be forced for sure for the future. Huge upside opportunity, in my opinion, in many different ways, as an employee, as a customer, as an investor, and I believe we're building this end-to-end stack. Again, from data center to network to end user around the user, not a device, not a server, not a storage, around the user. How do you deliver the best service to that user through the best content and app, the best support in the back-end, whether that's voice data video, that's the story. And we have the best story behind that, it's secure, they're manageable, they're available, they're reliable, TCO, CapEx and OPEX, and scale in the back-end with the software and hardware we have. You're not gonna beat that kind of story with any other vendor, I'm telling you. Okay, Tarkin, Maynard, Dave, I think this brings up. Am I boring you? No, no, we got a good discussion. We gotta make it self-relevant, that's really what this is all about. We gotta get rolling, but I think you make a good point about the whole end-user computing being enabled and transparently abstracted away, under the hood, if you will, that's gonna put a direct challenge on VMware because VMware's trying to put products out there. So I wonder if VMware is having that internal conversation. By the way, on that note, John, very quick, I know you guys need to move on. VMware, Citrix, Google, Microsoft, all these software vendors working very closely with us. The reason we are one of the biggest sponsors at this event, a huge big CIO innovation event on Thursday, as you know, Pat is gonna be there, Paul is coming, we're bringing in Citrix, Google, Microsoft, all sitting next to each other and talking about the Cloud Client Computing and how we're gonna deliver that content and app support from the end to end, from data centers to the client, and you will see there how we're working with all these vendors, even some of them are competing with each other at the end of the day. Our goal is to make sure the market is bigger, not only our market share, make the market bigger. Again, $3.5 trillion market, guys, $3.5 trillion, okay? With a T, the market is huge and everybody has a huge opportunity. Okay, Tarkin, great to have you in theCUBE, you're awesome, great dynamic guest. He's pumping on his ninth coffee, I need one, I'm gonna take a break, we'll be right back with our next guest. Thank you. Tarkin, great energy, love to have you in theCUBE, and again, thank you. Thank you so much. I'll be right back.