Dell Sees Growth as a Private Company, CEO Says

Michael Dell on the first day of Dell World says his firm can now focus more on long-term gains rather than short-term results.

Michael Dell

AUSTIN, Texas—Michael Dell could not have picked a better time to take his namesake company private.

During a bruising eight-month campaign last year that was fiercely contested by activist investor Carl Icahn, Dell argued that by taking the company private in a $25 billion deal, he and other Dell executives could accelerate the effort to transform Dell from a PC maker into an enterprise IT solutions and services vendor.

The deal finally went through Oct. 29, 2013, and over the past year, the tech industry has seen a rebound in the global PC market and turmoil among competitors that has included Hewlett-Packard announcing it will split into two companies and IBM selling its x86 server business to growing Dell rival Lenovo.

On the first night of the Dell World 2014 show here Nov. 4, Michael Dell reiterated to journalists and analysts that going private has freed his company from the worries associated with having to report financial numbers every three months and so instead can concentrate more on long-term results.

"We don't have that 90-day shot clock that other businesses do," he said.

During the press conference, Dell boasted of the growth the company has seen over the past 12 months, though, as a private company, he didn't have to give specific numbers around revenues or other metrics.

"Yes, we've grown quite a bit," he said in answering a question about sales, though he declined to elaborate.

However, the CEO did say that Dell is the world's fastest-growing integrated technology company, pointing to success in such areas as storage (the top storage provider based on total terabytes sold in the first half of the year), servers (retained the No. 2 position worldwide and top position in the Asia Pacific/Japan) and software (double-digit revenue growth).

It also has been a good story for Dell in PCs, where IDC analysts saw a 9.7 percent jump in shipments in the third quarter worldwide and 19.7 percent in the United States, growing faster than top vendor HP. Throughout the past several years, when worldwide PC sales—under pressure from the rising popularity of tablets—declined sharply, Dell executives reiterated the company's commitment to the client business. During his talk here, Michael Dell said despite the claims that the PC industry was dying, "we still believe the PC is the way business gets done."

He also said clients play an important role in Dell's larger story around its enterprise IT solutions and compared Dell's strategy to that of HP, which in its decision to break in two will separate its PC business from its enterprise units. HP CEO Meg Whitman—whose company last year worked to lure Dell customers away during Dell's fight to go private—has said splitting HP in two will make for more nimble companies. Not surprisingly, Michael Dell sees that as a bad idea, and an opportunity for his company.

"To be in the end-to-end infrastructure business, you have to have both ends, or else it's the end," he said.

During his talk, Dell teased some of the news that his company will announce Nov. 5, including the PowerEdge FX, a converged data center infrastructure solution that combines Dell's server, storage and networking technologies and will bring significant levels of density and scalability. In addition, the company last week kicked off a beta of a cloud brokerage that customers can leverage to find infrastructure-as-a-service (IaaS) solutions. Right now, the beta involves four to five cloud service providers, but Dell officials hope to expand that number as well as the services involved, growing beyond IaaS and into such areas as platform-as-a-service (PaaS) and security.

During the question-and-answer period, the CEO was asked about such subjects as Dell's mobile strategy (a good infrastructure, tablet and security play for the company, though Dell is staying away from smartphones) and direct and channel sales ("We love the channel."). He also was asked why, if Dell was seeing such strong growth, some employees were laid off earlier this year.

Michael Dell said job cuts were done through a voluntary separation program, which he called "more humane," and said that as Dell continues to evolve, there were some areas of the business that needed fewer people and others that needed more. He added that Dell continues to hire in such areas as sales, R&D and services.

"As our business grows, we will hire more people," Michael Dell said.