On Tuesday evening, blues rock group Alabama Shakes will perform a private concert at the Austin Convention Center. The exclusive concert is the opening night party for Dell EMC World, an annual tech conference hosted by Dell Technologies.
Over a three-day period starting Tuesday, 8,000 tech industry workers -- IT executives, industry analysts and Dell employees -- will descend on downtown Austin for Dell EMC World, with panels, talks from high-profile speakers such as author Malcolm Gladwell, and of course a keynote by CEO Michael Dell.
But this year's sixth annual Dell EMC World marks the last time Dell will host the conference in Austin.
Dell is moving the conference to Las Vegas in 2017, citing a lack of convention space in Austin as the primary reason. "We're just out of convention space," said Dell's vice president of commercial marketing Bryan Jones.
He said lack of hotel space or appropriate infrastructure did not spark the move.
Jones said Dell EMC World is simply bursting at the seams at the Austin Convention Center. Attendance has grown by about 25 percent from the year before, he said.
"It's gotten bigger every year." He said that Dell was not keen on using the sprawling approach that conferences like South By Southwest do, which occupies the convention center and a slew of other nearby hotels for additional meeting space.
Austin city leaders have been worried about losing lucrative convention business for years and seized on Dell leaving as an example of what's at stake. Losing Dell EMC World will cost the city an estimated $8.2 million a year in direct economic impact for the next three years, according to Tom Noonan, president and CEO of the Austin Convention and Visitors Bureau.
“Austin is a thriving conference and leisure destination that attracts more than 100 meetings at the convention center annually,” Noonan said. “It’s unfortunate that one of Central Texas’ most prominent corporations is no longer able to host their signature convention in their own hometown. We are doing everything we can to ensure that we continue to attract replacement bookings to make up for this lost business.”
Dell Technologies is attempting to soften the blow by hosting an executive summit in Austin next year.
The city commissioned a master plan to dramatically expand the convention center, but progress so far has been slow, in part, because of concerns over the cost. The expansion, as initially proposed last year, would occupy all or part of four downtown Austin blocks and would cost between $400 million and $600 million to build – without land acquisition costs – according to a report from city-hired consultant Gensler.
The convention center currently has 247,000 square feet of convention space, according to the Austin Convention and Visitors Bureau, compared to 2 million square feet at the Las Vegas Convention Center, 893,590 square feet at Houston’s George R. Brown Convention Center and 514,000 square feet at San Antonio’s recently expanded Henry B. Gonzalez Convention Center.
Dell is holding next year's event at the Venetian hotel in Las Vegas, not the convention center.
“Our convention center is the smallest convention center among the 20 cities that Austin competes with on a daily basis,” Noonan said. “This reason and the overall limited availability of the convention center translates to Austin losing nearly 50 percent of booking opportunities to our competitive set.”
The timing of Dell's move to Las Vegas also coincides with Dell's purchase of EMC Corp. for $58 billion last month. Before the merger, the companies held separate tech conferences at different times of the year. Dell's was typically in October or November in Austin. And EMC usually held its conference in May in Las Vegas.
Some analysts said Dell's decision to move the conference to May in Las Vegas is related to buying EMC because of the increased attendance a joint event will bring. "It's a big contributor," said Roger Kay, an industry analyst with Endpoint Technologies Associates. "The conference is building, it's growing and it has outgrown this city."
Las Vegas is also known as the king of tech conferences, because of the available meeting space, agreeable weather and quantity of hotel rooms. It's where Cisco Systems, IBM, Hewlett Packard and others host their annual tech conferences. And Las Vegas is also host to the hugely popular Consumer Electronics Show.
"Literally, every one of their biggest competitors does their show out of Las Vegas," said Patrick Moorhead, an industry analyst with Moor Insights and Strategy. Moorhead, who lives in Austin, said he travels to Las Vegas a half-dozen times a year for tech conferences.
Dell EMC World started in 2011 as just Dell World. Its first year it was expected to attract 1,200 people (not counting Dell employees). And that first year speakers included the CEOs of Intel, VMware and Salesforce.com.
"We originally built Dell World exclusively to be in Austin," Jones said.
The conference flourished over the years, with its attendance numbers soaring. They have had some big names come to speak over the years, such as former President Bill Clinton in 2012. Dell Technologies expects 6,500 people coming to the event from outside of Dell this year, bringing the total attendance to 8,000.