How has the merger with EMC affected Dell’s PC business? That and other burning questions for one of Dell’s top executives

Posted May 16th, 2017

We sat down with Sam Burd, the vice president and general manager of Dell’s PC division, to ask all of our burning questions about the company’s personal computing business, which makes up nearly 60 percent of its revenue in the most recent quarter. 

Burd spoke to 512tech during the annual Dell EMC World conference, which was held last week in Las Vegas. 

512tech: I’ve been reading a lot of good news about the PC business for Dell lately. Growing revenue, market share, etc. What would you attribute some of that recent success to?

Burd: “We’re seeing the business grow really well. We’re now 17 quarters in a row of gaining year-on-year (market) share. We’re seeing the market get better. 

The market shrank last year. We were one of only two companies who grew last year. 

That’s good, we’re happy with that -- but we’re never satisfied.

Michael’s really always been focused on the customer. He’s refocused the company on understanding what our customers want and to drive great solutions. 

If you look in the client space, we’ve won the most awards we’ve ever won in our history. This last year at (Consumer Electronics Show) we won 60 awards. Almost as much as the number two and number three company in our space combined.”

John Locher/ASSOCIATED PRESSPeople attend the Dell EMC World conference, Monday, May 8, 2017, in Las Vegas. 

That’s interesting because in the past Dell hasn’t always been synonymous with great design. 

“Five years ago (we were) doing stuff that was competitive, but the whole industry was a bit boring and I think we were way too boring and average in our approach. 

I lead our team that does all of our PCs. We set a goal of ‘I want to have the best product in every single category.’ From a sub-$199 product to a no-holds-barred XPS 13-type product. 

Our customers, the press set a high bar. We believe the PC space is really vibrant, we’re investing R&D money on it. 

Michael talked about how we spent $4.5 billion as a company on R&D. We are going to lead and be the best in the industry. It got our teams excited and passionate. 

And not everyone is perfect and the best in their category but that’s a high bar we set.”

How do you feel about the fact that companies like Microsoft are now entering (the PC) space? Their new laptop has been talked about as a competitor to Apple, but they are still in the PC business. How do you guys feel about that?

“They’ve helped reinvigorate the PC space. Whether it’s Microsoft or anyone else, we are going to have competitors. Our bar is to be better than Microsoft, be better than Apple, be better than all of them. 

I do think Microsoft, to their credit, has done a nice job with their operating system and (transforming) it from Windows 8, (which) was pretty much a real major disappointment, and poorly received in the industry... to Windows 10, which is a really interesting operating system that allows people to break away from a keyboard and mouse that’s been a stable thing in our industry for 35 years. 

I think they've done a nice job on that. It’s allowed us to be really creative with the devices. And then, yeah, we get to compete against them.

There are...other competitors out there, if they don’t do it, someone else will be there. We want to be better than all of them.”

Is Dell still sticking with the strategy of not making standalone tablets anymore?

“We have a detachable tablet in our rugged space. We do in our commercial space, but they are...really larger-screen devices. We basically got rid of the small-screen tablets. 

It was a market that, if you look at it, it grew really fast. It kind of peaked, and it became a very challenging place to have a good business. If you don’t meet a bunch of customer needs and add value to them, and you’re just saying ‘How can I get the cheapest thing out there,’ that means you are not going to find it very profitable to invest a bunch of R&D dollars and resources if customers aren’t really valuing it.

We exited the small screen tablet space...almost 18-plus months ago. Right now what we have are larger-screen devices that are basically a PC kind of device that you can detach. A form factor like this is a little more appealing because you don’t have the keyboard disappearing form the screen and it’s now gotten so small and light.”

John Locher/ASSOCIATED PRESSPeople attend the Dell EMC World conference, Monday, May 8, 2017, in Las Vegas. 

Listening to the keynote session today, not much of the focus was on the PC division, at least from Michael Dell. Do you feel like PCs get lost in the shuffle with the new Dell Technologies companies and the attention paid to that?

“Michael Dell did talk about the importance of the PC business. This has been an EMC event. We’re doing that part of Dell. The strategy that we have is really, ‘How do I sell technology at the edge all the way to the data center?’ 

And we look at it as being really important because...we get our first relationship from a lot of customers from the edge devices that we sell. Way more than 2/3rds of our relationships start that way. 

It’s important to have that whole continuum. It’s a great introduction to our business.” 

How has the merger really affected the PC part of the business, if at all? Has it affected how the sales force operates?

“Our business is still the same. The core thing on the product delivery is pretty much unchanged. We want to be well-recognized by our customers and by those other businesses (within Dell). 

The biggest change has been the sales teams where we saw there was very small overlap between the different customers we have.

EMC sells to a bunch of huge customers. You heard Michael (Dell) quote some of the numbers. It’s almost 100 percent of the large customers out there. We probably have 20 or 25 percent of the largest customers out there. 

There’s a bunch of great relationships they can give us access to.

How we set up the sales team so all those customers get it’s one sales team selling our total solution.” 

You don’t have somebody who just specializes in selling PCs?

“We have specialists, but they will have one main point of contact. 

(Customers) really like that a lot, of having one point of contact. I get...the right folks to bear in that account to go get me a competitive solution that I need. Versus, hey you are one company and I’ve got five people showing up to sell stuff to me.

And they will want to sell their own thing. That’s not as effective as going, ‘Let’s figure out what you’re after and bring in that quarterback.’ ”

John Locher/ASSOCIATED PRESSAttendees watch a presentation on a screen at the Dell EMC World conference, Monday, May 8, 2017, in Las Vegas.

The revenue that comes from the PC side, is it primarily from businesses or selling direct to consumers?

“It is, say, two-thirds from selling to businesses. It’s about a third from selling to consumers. Would you have guessed that or not?

I would have thought the majority was from businesses, but not two thirds.

“I’ve had people who believe Dell’s PC business sells to consumers. They remember the old Dell advertisements, the ‘Dude, you’re getting a Dell!’ 

I’ve even had some of our industry analysts who are coming from the enterprise side who had that perception. Which is funny because the company started selling with Michael (Dell) selling it to businesses.”

Really? I always thought he started selling directly to consumers.

“He sold direct, and there was a big consumer piece to that, but the start of the business was companies were buying IBM systems and he said ‘Hey if we put these together, we can do it more efficiently and give you a better solution.’

IT buyers and customers figured that out and they were some of the largest initial customers we had. We started a sell direct to everyone, including businesses. We have always been commercially focused.”

This story has been edited for clarity and length.