Michael Dell excited about sealing world’s biggest tech merger

Man behind ‘world’s biggest start-up’ is candid about why he wants firm to grow again

Michael Dell addresses the Dell World Conference in Austin, Texas last week. Photograph: Matthew Busch/Bloomberg.

“This is fun for me,” Michael Dell says. “If you told me I couldn’t do this, I’d be depressed.”

The head of one the biggest technology companies in the world is candid about his motivation for growing the company he founded 32 years ago in his college dorm room.

“I’m tremendously excited about the role of technology in changing the world,” he says. “When I look at what’s happened in the last 30 years, there’s been a lot of progress in the world. There’s a lot of bad things in the world, but there’s been a tremendous amount of progress and to me it mirrors the rise of the microprocessor.

“Somebody in Africa for $30 can hold a device in their hand right now and have more information than the president of the United States had 25 years ago. It’s amazing. I get to have a front-row seat in that and be very involved in that.”

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Michael Dell took the company private in 2013 after a much publicised battle with some of the company’s investors. With partner Silver Lake, the company’s founder pulled off the $25 billion buyout.

Since then, Dell has described itself as the biggest start-up in the world. While it may not fit the traditional perception of start-up in terms of size, it has adopted the principles of agility and innovation that can be attributed to smaller firms.

That led to Dell’s bid for storage firm EMC, a $67 billion offer that if accepted by shareholders will be the largest technology merger ever.

The deal has had mixed reactions, with some criticism about the move. The most notable was that of HP chief executive Meg Whitman.

“From an instinctual standpoint, it doesn’t feel right to develop our strategy from looking at our competitors. It just doesn’t feel like a good idea to me,” Dell says. “When I develop strategy, what I do is I go talk to customers.”

Quite what that strategy will mean for the global combined workforce is too early to tell.

While the prospect of a merger may sometimes result in a large number of jobs losses, it’s not apparent that this will be the case with the Dell/EMC bid. It may especially worry the companies’ combined Irish workforce, which currently stands at more than 6,000.

Hiring

However, Dell is quick to calm fears that there will be a mass cull in the wake of the deal, noting that the two businesses are complementary.

It’s something Dell’s EMEA president Aongus Hegarty backs up. The company is also still hiring, with additional sales staff being brought in at the moment.

Hegarty says things are still in the planning phase with a team working on the potential integration.

“I think there’s some very good synergy and not a lot of overlap,” he says. “If you look at the profile of customers and where EMC’s business is very strong, it is mostly in large high-end customers. If you look at our business, it’s strong from small business and consumer all the way up into those midsized and larger companies but not as strong as they would be at the very big customers and entities.”

There’s a similar situation with the product ranges on offer, and Dell has actually worked with EMC as a partner in the past.

The goal is to create a business with $80 billion in revenue, thereby increasing the market.

“It’s two very successful business coming together to create an even more successful company with a lot of great skills,” says Hegarty.

The merger may have been the main topic of interest at the fifth Dell World conference in Austin, Texas, but Dell himself was addressing more than just the questions around EMC. The conference is the company’s chance to unveil its new products and showcase exactly what it plans for the future – a result, no doubt, of talking to customers.

Internet of things

At Dell World, the company unveiled a new product aimed at simplifying the “internet of things” for companies. The Gateway 5000 series will hopefully do for Dell in the internet of things space what its custom-built computers did for the PC market.

“It [the PC strategy] worked out pretty well,” says Dermot O’Connell, Dell’s general manager for OEM in Europe, the Middle East and Africa. “Right now, if you’re doing something that would require a gateway, you’re really into buying components from manufacturers and putting it together yourself. What we’re hoping to do is enable a whole new wave of innovation by making these gateways open to anyone.”

The Irish team has much to offer Dell as it explores a brave new world that sees an increasing number of devices connected to the internet. Its internet of things lab is located in Limerick, its first dedicated lab for the technology in Europe.

It has already started an interesting project, an “Internet of Bees” as opposed to an internet of things. One of the employees in Dell’s group dedicated to environmental issues saw the potential for placing a beehive on the roof of the Limerick building in an attempt to help bolster the local bee population. Experts are currently monitoring a global decline in the bee population.

Enthusiasm

However, O’Connell says they took it one step further, with the IoT team adding sensors to it.

“They put high-speed cameras on it so you can count the bees going in and out, humidity, temperature, weight and other sensors on it,” he says.

“We pulled all that data down using gateways and other technology, and we’re going to publish it out on a web portal so scientists around the world can go and look at real beehive data. Hopefully one of them will figure out what’s going on with the bee population.”

The deal with EMC has yet to be finalised, but if it does go through, it will be completed in the second half of 2016.

Whether the naysayers will be proved wrong is something only time will tell. Until then, however, Dell is being buoyed by the enthusiasm of its founder.

“I’m just on a really big adventure,” Michael Dell says. “I’m having a great time.”

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist