Michael Dell On Apex’s $1B Q4 Performance, Public Cloud Repatriation And Fallout From ‘Massive Pandemic-Led Expansion’
‘We’re running through a big, wide-open door here, and we see lots of growth,’ Dell Technologies CEO Michael Dell tells CRN regarding the partner opportunity with the company’s Apex cloud platform.
Dell Technologies wants partners to sell more of its Apex cloud solutions, and no one at the company is more bullish about that opportunity than founder, Chairman and CEO Michael Dell.
“We’re offering a consumption model and the ability to automate the infrastructure, which is what public cloud offers, but with much more favorable economics, which is why it’s growing so fast,” Dell told CRN during an interview last week. “Great opportunity for our partners. … Ultimately, when a customer has infrastructure, what they want are the outcomes and the solutions that the infrastructure provides their business, not the infrastructure itself.”
Dell Technologies is giving partners incentives on the front end of Apex deals as well as market development funds on the back end, structuring them to increase partner participation within an offering that is designed to drive cloud-like ease of use across any type of data environment.
“More and more customers are talking about multi-cloud, or repatriation, or really understanding what the financial implications are of where different workloads go, and Apex is certainly helping with that,” Michael Dell said.
In the interview, Dell discussed the broad economic trends in the market, including tech layoffs and PC spending, Broadcom’s merger with VMware, and his take on Dell’s channel progress.
“We like to say pleased, but never satisfied,” he told CRN.
Dell Technologies has kept its leading position in selling servers and storage, and it managed to top the record revenue it achieved in 2022 last year, but only barely. The company’s 1 percent growth was further tempered by a warning that it was looking at a significant revenue slowdown ahead, which was anchored by lagging end-user PC spending. PC sales have been in a marketwide decline since 2021, reaching four consecutive quarters of lower sales at the end of 2022, according to research firm IDC.
Dell was not immune. Sales inside the company’s PC-focused Client Solutions Group (CSG) unit were down 5 percent for the year, with consumer PC spending down 40 percent year over year in the fourth quarter.
Michael Dell said the Round Rock, Texas-based company’s historic demand cycles indicate that the slowdown could be reversing course, adding that it has grown market share an average of 1 percent every year.
“We’re about five to six quarters into that valley,” Dell said. “Typically, that’s where it stops going down and starts to go back the other way. We’re seeing encouraging signs in certain sectors like small business, which is one of the first to come back. We’re definitely more optimistic about the second half and expect from the first quarter you will start to see some sequential growth going forward.”
That optimism from Dell carried over to him saying that, after laying off 6,650 workers earlier this year, no more job cuts will be needed at Dell for the foreseeable future. He also said he was “confident” that Broadcom and VMware will get their deal done.
Here is more of what Dell had to say in his exclusive interview with CRN, edited for length and clarity.