TECHNOLOGY

INNOVATING IN AUSTIN

Dell fights to stay ahead of the technology curve

Nicole Cobler
ncobler@statesman.com
Onur Celebioglu, Dell Technologies senior director of high-performance computing and AI solutions, talks about Dell's supercomputer Zenith at the company’s high-performance computing and artificial intelligence lab in North Austin on May 28. The lab provides technology that can help self-driving cars identify objects, cancer researchers quickly analyze the human genome or allow automotive makers to analyze the aerodynamics of a car. The lab also houses the Dell EMC Zenith supercomputer, which the company occasionally makes available to customers.

[RICARDO B. BRAZZIELL/AMERICAN-STATESMAN]

At a Dell Technologies lab in North Austin, engineers spend most days dousing computers with water, dropping them from nearly basketball-hoop heights and monitoring the devices in extreme temperatures.

The tests are key to Dell’s line of Rugged PCs, which are built for first responders, the military and those in need of a computer tough enough to withstand the outdoors.

It’s just one of a number of the company's labs in Central Texas -- and it's an important part of Dell Technologies' efforts to stay ahead of the technology curve.

As other tech giants like Apple, Google, Oracle and Facebook expand their presence in Austin, Dell has remained a steadying force in Central Texas’ tech sector. The company, which was founded 35 years ago and is headquartered in Round Rock, is the area’s largest private employer with roughly 13,000 workers in Central Texas.

But the company must constantly innovate to remain competitive in an ever-changing technology industry, especially now that it is again publicly traded following a five-year hiatus from Wall Street.

READ MORE: Dell Technologies founder and CEO Michael Dell says he's focused on the future, not on his legacy

Chairman and CEO Michael Dell, who founded the company from his University of Texas dorm room, took the company private in 2013, citing the pressures of having “a lot of hands on the steering wheel.”

Away from Wall Street’s watchful eye, Dell Technologies worked on its transition from PC-maker into a wide-ranging, full-service technology company. It made huge bets on data storage, cloud computing and software, and completed its $67 billion acquisition of EMC in 2016. The acquisition is the biggest information technology merger in history.

“We got to a point last year where the public listing allowed us to simplify the capital structure and stay on offense and continue to be aggressive in gaining share and growing,” Michael Dell told the American-Statesman in an interview at company headquarters in Round Rock.

Dell Technologies also gained majority ownership of VMware through its purchase of EMC.

And although the company underwent a huge transformation, Dell — using his motto that’s well-known to employees — said he’s “pleased but not satisfied.”

“Certainly, if I look over the last 35 years, there’s a lot to be proud of,” Dell said. “I also think that our industry is just getting started in terms of its impact on the world and the opportunities that we have to make a positive difference with technology are just beginning. I still spend 99.99% of my time thinking about the future, not the past.”

Changing impressions

Dell’s shift to cloud, software and data storage helped the company become the end-to-end technology provider its founder had envisioned.

Sam Burd, president of Dell’s client solutions group, said he has watched the company continue to focus on customers while delivering products and solutions.

Burd, who has been at Dell for two decades, leads the client solutions side of the company, which makes up roughly half of Dell’s revenue.

In the past fiscal year, the client solutions group saw year-over-year worldwide PC share growth for the 24th consecutive quarter and double-digit revenue growth in commercial notebooks and workstations.

“If I look back 20 years ago, we had more of an attitude of how we were a fast follower in the PC space,” Burd said, adding that when the company went private, Dell leaders decided “we need to be working in our company and with partners within the industry to do stuff other people haven’t done before and really push the envelope.”

Drew Schulke, vice president of Dell EMC’s networking business unit, said he’s seen a shift in how much time is spent directly engaging with customers and focusing more on software.

“From a Dell EMC perspective, we’ve fully embraced this idea that software is the best place to do things if you can,” he said. “Hardware needs to be good, it needs to be efficient, but ultimately we’re moving to this software defined world and it’s best to embrace it as opposed to resist it.”

But some analysts say Dell still has a ways to go before consumers recognize the company as more than a PC provider. Rob Enderle, an industry analyst at the Enderle Group, said that in many cases, a company “digs itself a hole when they first come to market."

“This suggests that it is important to not only message on what the company is but on what the company wants to become, so as the firm evolves, the imagine of the firm evolves with it,” Enderle wrote for online technology website Tech Guru Daily.

Austin-based analyst Patrick Moorhead of Moor Insights and Strategy said Dell has reinvented itself as a solutions company in the last five years.

"To improve the understanding of the company, particularly around solutions, I believe that it needs to do more of the basics, which are to increase the reach and frequency of those communications and add more Dell Technologies solutions," Moorhead said in an email. 

Emerging technologies

Meanwhile, Dell computer scientists and engineers aren’t strictly focused on hardware in its Central Texas headquarters.

At the company’s high-performance computing and artificial intelligence lab in North Austin, Dell provides customers with early access to new and emerging technologies.

The lab provides technology that can help self-driving cars identify objects, cancer researchers quickly analyze the human genome or allow automotive makers to analyze the aerodynamics of a car. The lab also houses the Dell EMC Zenith supercomputer, which the company occasionally makes available to customers.

Dell’s presence in Central Texas remains steady, and executives agree that won’t change any time soon.

“This is where we started, and it’s always been a great place to attract talent,” Dell said. “That’s kind of the foundation of what allows us to attract and retain great talent and drive innovation.”

Burd agreed, saying that the company is part of Austin's technology roots.

"We put technology on the road map, and if you look it's just become self-reinforcing," Burd said. "It's a thriving place with great business who are knocking on the door to come here."