On this episode of The Six Five – On The Road, hosts Daniel Newman and Patrick Moorhead are joined by Doug Schmitt, President of Dell Technologies Services to discuss industry trends, sustainability needs, and what the future holds for Dell and their customers.
Their conversation covered:
- The challenges customers are facing with the ongoing pandemic, inflation, and other geopolitical issues
- What’s top of mind for Dell’s customers
- A dive into how the needs of companies are shifting today
- A little overview of Dell’s 2030 sustainability goals
To learn more about the Dell, check out their website.
Watch the interview with Doug here:
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Patrick Moorhead: Hi, this is Pat Moorhead and we are here for another Six Five On The Road at Dell Technologies headquarters in the Austin area but babe, before we dive in to this awesome professional services content, we are going to introduce my co-host Daniel Newman. Daniel it’s been, gosh, 48 hours since I’ve seen you, I’ve missed you.
Daniel Newman: Yeah. People are probably going to start to think that we spend a little bit of time together.
Patrick Moorhead: I know.
Daniel Newman: There’s photo evidence all over the internet and Twitter, and then they see us on video and they’re like, “What are you guys doing?” But we’re out and about talking to some of the most important companies on the planet about some of the most important technology innovations, and today we got another one.
Patrick Moorhead: That’s right and quite frankly, services, I think in all of our research is, and very quickly becoming the tip of the spear for everything, so with that I have here today, Doug Schmitt, president of Dell Technology Services to discuss some awesome topics. Doug, how are you?
Doug Schmitt: Well, very good Pat, thanks for having me. Daniel, good to see you again.
Patrick Moorhead: Yeah. It’s so great to be in person here and I think I’ve spent, I don’t know, hours on a video with you and your team, but I have to tell you the… I look back to the first time we met and it was at the one of the last in person, industry analyst councils and I remember us talking and I’m like, “Doug, we’ve never met before but let me just tell you, you are going to be the tip of the spear of this company in a certain amount of years.” And I think from there we developed a good relationship and it just, it’s so awesome to see you.
Doug Schmitt: Yes, and again, you and Daniel joining us at DTW or Dell Technology World, it was great to see you then, and finally good to be back in person, as you said, not just in the zoom.
Patrick Moorhead: Exactly.
Daniel Newman: Yeah. I don’t know how long we’re going to keep saying that, but it’s very clear that all of us missed it a lot.
Patrick Moorhead: Yeah.
Doug Schmitt: Exactly.
Daniel Newman: Because you and I probably, I don’t know, I think I did 16 events in May and June.
Patrick Moorhead: Right.
Daniel Newman: I mean some, and in every one we heard that sort of same thing, but we forget that not everyone travels like us.
Patrick Moorhead: Exactly.
Daniel Newman: The traveling circus of industry analysts that we are, but I still miss it and I still get energy, every time that we get into the room together and Doug, I have seen you and been on your briefings and calls and I agree with Pat’s sentiment, technology and then services they are the tip of the spear.
And for Dell Technologies, the spear, it is such an important thing and you’re seeing a lot of trend lines that say, “This company’s going to continue to evolve in this direction.” And this is the part of the business you’re leading so for everyone out there, why don’t you give us just that kind of quick overview of Dell Technology Services and the business that you lead?
Doug Schmitt: Well, the team and I get the privilege to lead Dell Technology Services, and look, that’s a 65,000 people globally in 170 countries, we service our customers in over 50 languages, and really it’s about providing all the services from the edge to the core, to the data center, and inside of that, what we’re really doing is we have a tremendous number of solutions and services.
We pride everything from consulting to deploying, standing up and installing, support, this would be a traditional support most people think of services as. All the way through managed and our residency services security, all the way then to sustainability and our asset recovery, so it’s really end to end in helping deliver great technology and solutions to our customer base and becoming their trusted advisor, is what it’s about.
Patrick Moorhead: Yeah. It’s every time you roll-off the scale and breadth and depth of your business, I’m impressed and I think there’s a lot of learnings that you capture from servicing so many customers, over such a long period of time.
And Doug you spent a lot of time talking to your customers and quite frankly, in the last three years, I mean, almost everything has changed I mean, whether it’s pandemic, whether it’s global challenges and inflation, things like that, what are top of mind of your customers and their challenges?
Doug Schmitt: Yeah, that’s a good question Pat, and I know you and I, and Daniel had this discussion because look, there is a lot of change out there. Now in the technology business, I know you and I go back and Daniel and the technology business, everybody says that, but it is a huge amount of change going on right now.
And look, that started with the pandemic. You think about everybody, literally what we’re hearing was is, they had to make a transformation, whether you were a school board, whether you were government or in private industry, all of a sudden overnight, you had to change the way, not only that you did business, but that the way technology worked and we all learned very, very quickly.
What’s really amazing we’ll look back on that is, how fast globally that occurred. I always heard cultures weren’t going to do this or that in different places, but it changed instantly. We had to help our customers get all of their, obviously their client, but also a lot of the data center improvement, so a lot of change going on, helping our customers through that.
Then we are… Second, very quickly right behind that is, resiliency and continuity, that becomes even more important now, it’s always been important but when everything’s running remotely and it depends on the data center and your client device, it’s hugely important, and then really the third one, again, that you and I have talked about is, outcome based services.
Patrick Moorhead: Right.
Doug Schmitt: And this one is exciting, but there’s a lot of work to be done on it. Our customers, aren’t just saying, “Hey, provide the end to end service for us.” You now have insights into our company and what we’re doing, we need you to help us run the business more.
A great example of this is, a large retailer that we help run their entire retail chain for their stores as well, they came to us and said, “Hey, look, it’s great that you’re helping us keep the stores up and running.” But now you have data of when the cash registers are actually being used, actually come back and tell us when the cash registers need to be staffed.
So this outcome base of helping them run their business, so look lots of change helping our customers through that, the resiliency and continuity and a lot around this outcome based services now.
Daniel Newman: Yeah, it’s really interesting, we keep hearing this sort of how quick every industry accelerated because of the pandemic. Digital transformation this whole concept, it’s not really new, but the world became exposed to it.
The world, everything from this, the shortages that we’re facing right now, just how much demand there is for compute and for things that run on semiconductors, all the way to like you said, just companies realizing that there was so much untapped data that would enable them, and by the way, when customers couldn’t come in anymore, they had to figure out how to get to those customers.
Doug Schmitt: That’s exactly right.
Daniel Newman: Which completely shifted the dynamics of businesses and their entire models of going to market, so you sit in this interesting role though, because you’re kind of, you’re not selling the hardware per se, but the entire industry.
And Pat and I experience this all talking about moving to services, whether it’s services, consumption, subscription, ARR, and by the way the most popular thing on Wall Street is, “What’s your subscription number? What’s your service revenue?” Everyone wants to know that sticky number. So what are you seeing in terms of the shifting needs that came out of all that, pull forward of digital and investment in technology?
Doug Schmitt: Well yeah, and that story I think is still being written obviously. One thing about that, Daniel, it’s interesting I always tell when our team talks about the pandemic and the shift of the way we do work now, I actually think that was going to occur anyway, but whether it was five or 10 years, it just it’s fed everything up. It’s like somebody just flipped the light switch, but we were headed that way probably anyway, that being said, to your point, it’s a lot of change.
The first thing our customers are asking us and really, want us to play the role of, is trusted advisor there’s a lot going on, they want to lean on someone that can help them with their product, their software, their services, the overall solution, and again, from all the way from the edge, all the way up to the hybrid cloud, and so they’re asking us to play a role inside of their, that we play.
The second one is, and you hit on this, is this, this flex consumption. No longer just the… Exactly, no longer just the capital model, the CapEx model which we’re used to, but it’s not just flex, it’s flex the way the customer wants it, is it based on a quarterly, a monthly billing? And for example, one of the largest, the largest retailer, I should say, Woolworths in Australia and New Zealand has us doing hybrid cloud, helping them with all of that and it’s on a consumption basis, and so it’s providing the customer choice of how they want to consume our products or services and our solutions.
The third one is, really around life cycle management. Customers aren’t just coming in anymore and asking us to do pieces of services. It used to be and Pat you know this, they come in and buy a deployment, they come in and buy a managed, they come in and buy a support. They’re saying, “Hey, look, help us run this thing, so we can go build IP for our, and develop differentiation for our customers.” Right? “So help us run this life cycle services through our environment.” Security, look we could do a whole episode on security.
Daniel Newman: Let’s… Not right now though.
Doug Schmitt: Exactly. No, I mean, and so we’ve been very busy building offers like managed detection response, you were at DTW you heard about our Apex Cyber Recovery.
Daniel Newman: Yes.
Doug Schmitt: Offers I could go on through that, last but not least, sustainability. We see this in over 95% of the RFPs that we see coming in, request for proposals for us to do, has sustainability in it, which is great.
We, as well as Dell believe in that we have our 2030 moonshot goals, which are very, very lofty, which is that for every system we ship out, we get one back and we recycle those as much of that material as we can and put it into new systems. That 2030 goal is very ambitious, but we’re up for it.
Patrick Moorhead: Yeah. It’s interesting, a lot of those examples you used of kind of how they articulate that, align with our conversations with CEOs, and one of these, one of the overriding goals here is, “Hey, I know how to do this, but it’s not core to my business and I really want another company to come in there, help us out with this.” And by the way, maybe I’m a Gen-Xer, I’m a millennial or something like that and I grew up with, “Hey, I only want to pay what I’m using.” At that moment you cross those two streams and pretty awesome stuff happened.
Now, at some point though, you have to productize things and I’m curious based on what they’ve expressed that they want to do, how are you packaging up these services? How should we look at your offering?
Doug Schmitt: Yeah. Well look, that you’re constantly, we’re constantly evolving that based on the customer needs and what we’re being told. So if you were to break that down, you’d look at our core services, Pat, and you know these well and Daniel does. You look at those, it’s about modernizing those offers and making sure that we continue to make them proactive and predictive, that’s something else our customers continuously tell us and then delivering that with the AI, BI capabilities that we know.
So we’re constantly adding additional ability to help our customers through that. And then I’m happy to say, that we are just launched like example, I think the first in the industry, it is first industry, our ProSupport Plus is going to be subscription.
Daniel Newman: Right.
Doug Schmitt: So we’re packaging that, taking that, launching that as a subscription, so it’s about continuing to do that. Right? Modernizing and making that. Our second is in the professional service and managed service space, and these are important because this is what helps us deliver that outcome to the service-
Patrick Moorhead: Right.
Doug Schmitt: … to our customers, that service of what they looking for, this is everything around continuing to make sure that we are very focused on the consulting work we do, where we go in and help our customers, design, build and the solution and the architecture they’re looking for.
We’re building out the managed services, we have a cloud console that’s tied in with Jeff Boudreau’s Apex console, completely overhauling how we do managed services and leveraging technology and differentiation so, but is, I think you and I have talked about that, that is something you get up every morning and drive.
Patrick Moorhead: It is and the irony is, in a way, when you’re doing managed services, you’re actually using your own console, so in a way you’re going to learn it because you’re managing somebody else’s IT and that product is going to get better because you’re using it and it’s a Dell console, so it seems like the whole company would get a benefit from this, whether they’re buying this as an on-prem solution or as a managed service.
Doug Schmitt: You’re absolutely right, that’s exactly right, take the feedback and the SRE. When you combine that, not only with the console itself, but the data and the information coming back, plus the SRE on the usage and you combine those, it’s a very powerful improvement cycle that will continually get better.
Patrick Moorhead: Yeah and sorry, I for boomerang here, but I’m just, I’m stuck on this ability. What’s you’re building here and the scale that you’re doing it at over time, you’re going to learn so much over so many different customers? Now, obviously the data isn’t conflagrating or being blended, but you’re going to get better, the more customers you have that you’re doing this for, you’re just going to get better at it.
Doug Schmitt: Well-
Patrick Moorhead: Is that the right way to look at it?
Doug Schmitt: … Yeah. Well, that’s we have to be, that is going to be key for what we do is that in this industry, you just have to-
Patrick Moorhead: Particularly with the data. Right?
Doug Schmitt: Well let me give you an example of that, let’s just play off that a little bit. This just happened recently and it has me something and for the entire team where we’re going to have to learn a different way to approach services, just for how we’re talking to our customers.
So we install and we have a HR system in, and that we’re managing, a managed service for a company, and the CIO comes to us because we’re also getting the help desk, so we’re getting the calls in.
Patrick Moorhead: Right.
Doug Schmitt: From the use of this, and we go to him, we say, “Hey, here’s why you’re getting all the calls, we’ve run AI and B on this, this AI and BI and it’s really some of the HR processes that are driving these calls back in.” He’s like, “Great. I need you and your, the services people to go with me to talk to the HR lead.” Well, there’s a bit of me feeling like, “Okay, we’re being set-”
Daniel Newman: Wait as part of the contract.
Doug Schmitt: Yeah. We’re going to, now we’re going and explaining to HR why the AI and the BI is showing that they have some HR improvement process, that outcome based, that is what you’re talking about happening, thousands, hundreds of thousands of time where we’re actually adding the value back into the business be on just the IT layer.
Daniel Newman: That’s the last time you’re going to tell them anything. I mean, more work for Doug.
Patrick Moorhead: I don’t know, maybe that’ll be part of the contract to, this is what it takes to go talk to HR.
Daniel Newman: What, you know-
Doug Schmitt: That’s right.
Daniel Newman: … it’s really interesting though, because as I’m just kind of listening to what you’re saying, and it sort of brings two challenges into focus that I want to have you talk about Doug, and the first is we talked about how fast everything happened, so you had to innovate it at breakneck pace.
So you pulled a lot of what… You say the CEO’s problem with digital transformation is that timeline to the next disruption kept getting shorter, meaning you needed a new idea to happen faster, and the second thing that you mentioned when you talked about going in and talking about analytics and BI, the thought is Dell Technologies.
I thought that would be the analytics software, or that might be the ERP system, or that might be coming from the CRM part, or the HCM and you’re getting pulled into these things, and what’s happening is the industry is kind of becoming this amalgamation we’re hardware, we’re software, we’re services, you’re all coming together and all having to be accountable to each other.
So I’m, it’s kind of two things at once. I’ll let you address each of them, but A, how do you kind of keep the partners and the ecosystem in tune? And then B, how do you deal with this faster pace of innovation in order to keep giving customers what they want in the future?
Doug Schmitt: Yeah. Well, look, that’s-
Daniel Newman: Huge question-
Patrick Moorhead: I like you asked that.
Daniel Newman: Huge question, by the way that was like…
Patrick Moorhead: Like a three partner
Daniel Newman: That was like eight. I’m known for that by the way.
Doug Schmitt: Well look, again, you’re hitting the things that would, that are the challenge that make this job and for the team fund. Well, first of all, we come, I think this is the power of Dell Technologies. We come from being a part of a great product, great software, services team, all combined, so we’re able to work as one unit to deliver the solution to the customer, and by the way, that helps having all of that together right.
The second though is… And I joined in 1997 and I learned very quickly that the power of the model here at Dell Technology is that we’re talking directly to the customers. I mean, literally, it’s not like I’m not hearing it from a third party, it is directly. That is myself, my team, all of us, in fact we do over a million interactions a day, either through web, chat, social media, phone calls, you name it, email.
And Michael likes to say, and I agree, this is a great line. “We have big ears, we listen to our customers.” So the first thing is listening to them and then taking that information of what they’re looking for, and looking for ways then to deliver that outcome they want.
Leveraging like you’re talking about, we use Celonis and Aris for a happy path to deliver those solutions, so it’s constant improvement, which is what you are hitting at Pat. And you want to build a model that’s constantly working and learning, to help the customer deliver that better product that they’re looking for in service.
Patrick Moorhead: So, listening to the customers and having the biggest ears is super important, particularly when you’re taking a market. Right? When you’re serving a market with no known and unknown needs.
Doug Schmitt: Right.
Patrick Moorhead: And what you and I have had, some really good conversations about is, “Hey, what about the market taking aspect of this?” And listen, Dell has transformed many businesses over its history and I’m curious, what are some market making opportunities that you might be thinking about again, not asking you for futures here, but what are you thinking about in terms of making markets?
Daniel Newman: I like that name by the way.
Patrick Moorhead: No, I know, I know. That’s the name of his show.
Doug Schmitt: There you go. Yeah.
Patrick Moorhead: You’re not supposed to do this on these videos. Come on.
Daniel Newman: We have fun here.
Patrick Moorhead: Okay.
Doug Schmitt: That is it look, I think the first one is we’re not an island as a service organization, it is part of Dell Technologies and because we all are listening to customers, we’re able to build those solutions that they’re looking for, I know you’ve talked to Jeff Boudreau you talked to Sam Burd, this is a team support and so we come together as a group and a team, and then we’re laying out that strategy deliver that, but let’s go down further into services now, of when we’re tied out on the larger delivery of solutions like Apex, or PC as a service.
Beyond that, what we’re looking at is the CX. This really is about that customer experience side of delivering what they need and what you find by if you’re delivering that very well and we are, we want to continue to be, is you find the nuggets of where you’re going to go expand those things and you know that.
It comes with each and every customer interaction where you’re looking for those, but pulling out the things that customers don’t want, with that CX and making sure that you’re continuing to add as you’re getting that feedback from them. But the second one around that you talked about, this is, this happy path. We’re measuring that stuff real time, so that, and it’s going to be interesting where and how this gets managed over time.
And by the way, I worry about it culturally, because you’re going to get instant feedback, we already are in our teams of when something doesn’t go right for the customer, and it’s not coming from the manager, it’s coming background directly to the front line.
And then looking for those opportunities where we differentiate, and we leverage like you’re talking about, the Apex cloud console, these things are differentiations, differentiators that we’re building to make sure we deliver it in a better way, and delivering those outcomes that the customers are looking for.
Patrick Moorhead: Now, it’s exciting stuff and just to be brutally honest, I mean you’re one of the first services organization that’s thinking about a market taking approach, as opposed to getting, as opposed to receiving things and fixing things that break, getting ahead of it and in the end, I think you have your intent on this idea of understanding what customers are going to want even before they need them, and proactively get ahead of it.
I mean, you were the first with proactive support using agents on a PC to basically… I remember the story of shipping storage out to the customer before it broke, because you knew it was going to break.
Doug Schmitt: Yeah.
Patrick Moorhead: Based on all of the data that you had coming in, and now taking that across this notion of an autonomous data center or an area inside of an organization where you have so much data and comparing it across different areas that you are going to find patterns in now. I just find that incredibly exciting.
Daniel Newman: Well this has been the demarcation between those that will win and those that will lose. We’ve been hearing this for so much time about proactive to reactive.
Patrick Moorhead: Right.
Daniel Newman: And there’s a lot of great stage demonstrations of proactive, but until you put some of these technologies in the real world, and Doug, that’s really what you’re doing, is you’re putting them out in the real world and getting those millions and millions of pieces of data and feedback, and it’s the learning, it’s the training, it is those technologies that we use so casually, “Oh, it’s AI.”
Well, it’s analytics, it’s machine learning, it’s a lot of intelligence and smart leadership and great partnerships and all those things kind of have to come together to really deliver on what’s next, and I think that’s where I’d like to end this conversation, Doug.
Thank you again for your generosity and spending time with us here today, but what is the future? I mean, because I’ll say, everything you said today is pretty on par with things we talk about in our research, but we love when we talk to the experts that no more than us, is that possible?
Patrick Moorhead: That’s possible. You know what? Our egos allow that, of course.
Daniel Newman: When we do, is kind of what are we not seeing? What do you see that maybe the markets aren’t seeing? What’s going to happen next? We just talked about one thing a lot of companies are competing on. What are you seeing, that are going to be the things Dell will compete on in the future that’s going to help you stay?
Doug Schmitt: Well, I’ll tell you what won’t change, is our focus like I said on listening to our customers and a genuine natural curiosity on what we can do to help them with all of this information and data and finding a better way to use it for them, so that’s, what’s not going to change.
But look, we talked about this core support is definitely have to, is going to get much more in front with the customers, much more automated, helping them, delivering it the way they want to leveraging this proactive and predictive, I see that continuing as we modernize it, and as we just talked about ProSupport Plus in the US having subscription, so you’re going to see more of this the way they want it, the way they want to consume it, the customers.
Will continue to build these professional services out and that’s going to lead to this outcome based services. You and I have talked about this a lot, Pat. I’m in agreement that’s where this is headed, it’s going to be doing more for the customer, not less with the information and the capabilities we have. But I’m also very excited, I really am, about metaverse?
Patrick Moorhead: Yeah.
Doug Schmitt: And Web 3.0 and I think, we have our teams experimenting with that. I think there’s a lot of people using that, in ways that we can get in and deliver customer experience on that as well. And then AR, VR-
Patrick Moorhead: Right.
Doug Schmitt: … out in the field there’s a whole nother subject, you guys, I mean, I know, you know but that’s a whole just in and of itself episode. That offers us a great deal of opportunity to provide a better experience for our customers, so lots going on out there, but it’s all going to be at the end of the day about delivering what the customer wants.
Patrick Moorhead: Yeah. And it’s interesting, there are actually very applicable use cases for what you talked about, that aren’t just science projects. So for instance, VR, as it relates to education.
Doug Schmitt: Yes.
Patrick Moorhead: AR as it relates to fixing things, and then digital twin. Right? If you’re managing a factor of the future, their IT for somebody, digital twin is going to be very, very important and that quite frankly is AR, and those are the two or three use cases that I don’t think anybody is arguing about whether it’s going to be part of the future, the only question is when?
Daniel Newman: But are they the metaverse? Are those things all converse? I don’t know. The Web 3 metaverse AR, VR, I guess it just depends on your definition.
Patrick Moorhead: I don’t know, that’s going to give us a lot to talk about-
Daniel Newman: We’re going to have them back-
Patrick Moorhead: … in the future.
Daniel Newman: … bring them back to do a metaverse services episode.
Patrick Moorhead: I’d love to and security, now we’d love to-
Doug Schmitt: And security.
Patrick Moorhead: Yeah.
Daniel Newman: Look at this.
Patrick Moorhead: Oh, so listen, Doug, I really appreciate your time here on The Six Five, I can’t tell you how excited I am quite frankly about… Listen, my first 10 years were an infrastructure. Okay, starting in 1990 and services quite frankly, was at the end of the rope. It was when things just broke and barely thinking about that, and where we’ve come now as an industry and the set of expectations driven by whether it’s generational, I want it now, I want it my way and I only want to pay for it when I’m using it. Right?
That might have seemed impossible back in the early ’90s is now the reality that you’re in, and in a way you are riding on the train and building the railroad tracks and new railroad tracks you’re laying at the same time, so it’s very exciting, you’re in a pivotal role here at Dell Technologies and quite frankly, based on the time that I’ve spent with you and your team, I… Listen, I’m not going to Babe Ruth things, but I’m very comfortable with the progress you make, how you look at these challenges when I map that to the future of what people want, so thank you so much for being here.
Doug Schmitt: Well, I appreciate being here and having me on, and look forward to future discussions as we always do have.
Patrick Moorhead: Absolutely. So this is Pat Moorhead and Daniel Newman with the Six Five On The Road at Dell Technologies headquarters here in the Austin area. We hope you like that, hope you tune again, have a great day.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio