EMC Acquisition

TAKEAWAY: EMC ACQUISITION  

HENRY:
After you went through this long, difficult process of getting Dell private again, you then went again in the opposite from what a lot of your competitors were doing, which was getting narrower and more focused, and you got bigger. Part of that getting bigger was the EMC deal. Can you tell us about why—I know that you actually tried doing it in 2009, and then it wasn’t the right time. People didn't have the same appetite for risk at that time that you did. And you were able to make it happen in 2016. Can you tell us about what made you go in this direction—this big risk and this enormous growth?

DELL:
So, there's a lot of history here. My good friend Joe Tucci is here. He’s been a great friend. We first met in 1994, before he'd joined EMC. And in 2001, Dell and EMC came together and created an alliance that we called Dell EMC. This was 16 years ago. And it worked very well—better than we had planned for. Became a multibillion-dollar business. We learned how to work together in terms of R&D and sales and how do we service customers and how do we work our supply chains together.

All aspects of the companies were collaborating together, to the point where in 2008, Joe and I were sitting down and saying, hey, maybe we should combine these companies together. We had consultants on either side. We had secret meetings of the board of directors of both companies meeting in undisclosed places and code names and all the stuff you do for these sorts of things. Then we ran into this thing called the global financial crisis, and the bankers said forget about it. So, we couldn't do that. Then in 2012, I started the process to go private. 2013, we completed that. We got off to a great start. We're doing really well. So less than a year after completing that, I called up Joe again and said, hey, let's re-explore what we'd talked about back in 2009.

It wasn't a flip decision at all. We spent more than a year studying everything—how would you do it? Then in October 2015, we announced the plan to combine. And then in September of last year, we completed it. And I'd say it's gone extremely well, thanks to our customers and partners, a fantastic team of people. The revenue synergies have been much greater than we thought. The real idea behind this is that by combining Dell and EMC, VMware, Pivotal, all the other members of the family, you create the essential infrastructure company—company that’s number one in everything all in one place. And there’s all kinds of cross-innovation you can drive across those businesses.

We also theorized that there would be a portfolio effect, where decision-makers would look across the whole family and see that we could provide a broad range of information technology across everything they're doing—the digital transformation, the Internet of Things, what are you doing with all your data, what's going on with artificial intelligence, machine learning, the IT transformation, workforce, security—all the things that are really interesting and exciting and affecting all businesses and all aspects of society right now, we would have an unprecedented capability because of the great work that both companies had done over the years. And it was very complementary. We didn't have a lot of overlap.

We also knew from the period that we had worked together that the cultures were quite compatible. One of the interesting things we did during the planning for this was we did a survey. We had 75,000 people across the whole organization. And we asked the former EMC folks and the former Dell folks—the companies were still separated at the time—and we said, hey, what are the things that make your current company successful? We came up with 22 of them. It turns out the top five things were exactly the same things.

And we took our very best people—we took about 300 of them out of the company, out of both companies, and said this is your job now. You're just going to plan this thing and make it really, really seamless, make it so that our customers have a great experience with their relationships that they've had, that the support experience continues to be great. We're going to keep investing heavily in R&D. We're investing the last three years $12.7 billion in R&D. The teams here in Boston are a very important part of that engine, leading our data center business.