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Dell CFO Tom Sweet On Why Going Public Will 'Catapult' Dell Forward

‘From a channel perspective, [going public] should open up additional velocity as we think about how do we more effectively go to market and position integrated solutions,’ says Dell Technologies CFO Tom Sweet in an exclusive interview with CRN.

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Why did Dell Technologies decide to go public again?

We have a very complex capital structure, we have multi-classes of stock and we have different layers of debt. But the whole goal here is to align economic and equity and trust. Today, think about the fact that we at a Dell Technologies level own 81 percent of VMware, but yet we are sharing that VMware economic stake with this Class V tracker stock. The dynamic that it created was putting friction in the system in terms of our capability to drive integrated solutions effectively across the family of companies. Why? Just think about the fact that we can sell [customers] storage arrays, we can sell them software-defined, hyper-converged infrastructure, but depending on what solution we drove, those margin dollars moved around the company.

For example, 'I'm not going to sell you a primary storage array, I'm going to sell you a software-defined vSAN solution.' I'm essentially not putting margin dollars at the Dell level, I'm putting them on the VMware level. Therefore, I'm sharing that margin pool among both the Class A VMware holders as well as the tracker holders. I don’t want to overstate that it was a huge problem, but it was something we kept thinking about. We're going to have to clean this structure up, otherwise we're going to come to a point where we are not able to effectively do what we want to do. … It's been quite a journey over the last four or five months. I've talked to 200 investors four different times, but I think we have everybody lined up now.

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