Dell Technologies Inc. · NYSE:DELL
Dell Technologies — Investor Day (June 2012)
74 slides from Dell Technologies's investor day presentation, Jun 13, 2012
Slide 1: 2012 Dell Analyst Meeting
2012 Dell Analyst Meeting June 13, 2012 Join the conversation #DellAM12 – Follow @DellShares
Slide 2: Welcome
Welcome Rob Williams Vice President, Investor Relations
Slide 3: Agenda
Agenda Part I – Strategy & Financial Overview 7:30 - 7:35 am Welcome Rob Williams VP, Investor Relations 7:35 - 8:00 am Strategy & Financial Overview Michael Dell Chairman and CEO Brian Gladden SVP, Chief Financial Officer 8:00 - 8:45 am Q&A Session Michael & Brian 8:45 - 9:00 am Break Part II – Sol
Slide 4: Forward-looking statements
Forward-looking statements Special Note on Forward Looking Statements: Statements in this presentation that relate to future results and events (including statements about Dell’s future financial and operating performance, operating strategies, strategic investments, product demand, industry trends,
Slide 5: Non-GAAP Metrics
Non-GAAP Metrics Non-GAAP Financial Measures This presentation includes information about non-GAAP operating income and non-GAAP gross margin (the “non-GAAP financial measures”), which are not a measurement of financial performance prepared in accordance with U.S. generally accepted accounting princ
Slide 6: Strategy and Financial Overview
Strategy and Financial Overview Michael Dell Brian Gladden Chairman and CEO SVP, Chief Financial Officer
Slide 7: Delivering on our commitments
Delivering on our commitments Strategic areas of focus changing the business Develop & acquire key IP • 8 acquisitions in last 12 months and sales capabilities • Opened 2 data centers and 11 solutions centers in all three major geographies in the last 4 quarters Deliver solutions • $18.6 billion ent
Slide 8: Delivering on our commitments
Delivering on our commitments FY12, growth refers to year-over-year • Revenue of $18.8B (up • Revenue of $16.1B (down Large +4%), driven by strong Public -2%) driven by slower Enterprise services growth spending in US Public and • FY12 Services revenue up Western Europe +13% based on continued • Del
Slide 9: Shifting business mix to enterprise solutions & services
Shifting business mix to enterprise solutions & services Dell-owned innovations and solutions “Old Dell” FY08 “New Dell” Q1’FY13 1 Enterprise FY08 Mix Q1’FY13 Mix Solutions & 23% 40% 31% 50% Services Mix Revenue GM$ Revenue GM$ 2 ~2k Enterprise Solutions headcount ~5k Enterprise Solutions headcount
Slide 10: Committed to our strategy
Committed to our strategy Delivering end-to-end solutions with scalable, mid-market design point Servers, Networking and Storage Scalable, mid-market design point IT Solutions End-to-end Services & Cloud End-User Computing Software 2012 Dell Financial Analyst Meeting
Slide 11: Differentiated with a scalable design focus
Differentiated with a scalable design focus Solutions that work in mid-market scale to largest and smallest customers Commercial IT Spend How is Dell differentiated? $3.0T Scalable • End-to-end solutions • Scalable & flexible $2.6T End-to-end • Standards based…avoid lock in Solutions • Easy to use…i
Slide 12: Developing solutions with a customer point of view
Developing solutions with a customer point of view Emerging trends drive customer needs Trend Converged Connected Data Emerging Cloud Data Center Devices Explosion Markets Security Customer Need How do I get a How do I How doROI better I get ona How do I gain access How do I How do I use better my R
Slide 13: Long-term formula for success
Long-term formula for success Continue to run the core business well and focus on growth in solutions Key Elements Characteristics Dell Strategy Core Run Well Dell • Slower growth • > 5% operating income (Transactional) End User Computing* • Great cash model • Strong cash flow • Global footprint exp
Slide 14: Strong returns from end user computing
Strong returns from end user computing Optimize for OpInc and CFOps Revenue ($B) Revenue ($B ) 2%+ CAGR End User Computing 47.2 43.4* 47.0+ FY16 OpInc goal > 5% FY08 FY12 FY16 Goal • Driving business to FY16 goal of over $47B in revenue – Even assuming a downside scenario of ~$35B (-5% CAGR) which w
Slide 15: Optimizing spend and strengthening cost position
Optimizing spend and strengthening cost position $2B+ of cost reductions over 3 years…reinvest majority in growth Supply • Product and configuration simplification Summary ~$600M Chain • Supply chain efficiency / consolidation Targeting >$2B savings by Services • Leverage global capability FY15 end
Slide 16: Grow higher profit businesses fast…invest to win
Grow higher profit businesses fast…invest to win Above market growth…differentiation with superior ROI Revenue ($B) Revenue ($B ) 10%+ CAGR Enterprise Solutions 8.9 10.3 15.0+ FY16 OpInc goal > 8% FY08 FY12 FY16 Goal 52%+ CAGR Software 0.4* 2.0+ FY16 OpInc goal > 12% FY08 FY12 FY16 Goal 6%+ CAGR Ser
Slide 17: Inorganic growth success
Inorganic growth success Developing track record generating good return on investments ~$10.3B 18 $9.3B ~90% 15%+ Cash Used to Fund Companies Acquired Post-Acquisition Post-Acquisition Avg IRR Target for M&A M&A Transactions Revenue Revenue CAGR** Business Cases Representative FY08 – Today* FY08 – T
Slide 18: Disciplined capital allocation…initiating dividend today
Disciplined capital allocation…initiating dividend today Solid cash generation & increasing strategic investments Cash Flow Generation Strategic Investment Rate CFOps Interest Coverage Ratio R&D CAPEX Acquisitions Investment Rate $6.0 $5.5 120x $20.0 100% EBITDA / Interest Expense 100x 80% Investmen
Slide 19: Long-term outlook
Long-term outlook Continued focus on delivering long-term shareholder value Disciplined Capital Allocation Returning 20-35% of Free Cash Flow (buyback + dividend) Focused M&A Program Focus on EUC > 5% OpInc & $2B Cost Program Shareholder ES&S > $27.5B (+10% CAGR) Value Cash Flow from Ops > Net Incom
Slide 20: Dell in FY16
Dell in FY16 Continue executing on consistent strategic vision Revenue $ Mix Trend End-to-end solution provider 30% 37% 70% 63% Vertically-focused ~40% FY12 ~30% FY16 Goal ~10% ~10% OpInc $ Mix Trend ~50% ~60% Solutions-focused <50% >60% >50% <40% Creating value for customers FY12 FY16 Goal End User
Slide 21: Q&A
Q&A
Slide 22: The power to do more
The power to do more 2011 Dell Financial Analyst Meeting
Slide 23: 2012 Dell Analyst Meeting
2012 Dell Analyst Meeting June 13, 2012
Slide 24: End User Computing Solutions
End User Computing Solutions Jeff Clarke Vice Chairman and President, Global Operations and End User Computing Solutions
Slide 25: Committed to our strategy
Committed to our strategy Delivering end-to-end solutions with scalable, mid-market design point Servers, Networking and Storage Scalable, mid-market design point IT Solutions End-to-end Services & Cloud End-User Computing Software 2012 Dell Financial Analyst Meeting
Slide 26: End user computing - strategy at a glance
Vision End user computing - strategy at a glance Deliver end user solutions that help customers compute in environments with pervasive data access Continue to strengthen Strategic initiatives 1 the core PC business 2 Provide new value 3 Expand our scope • Drive additional cost • Address the full ran
Slide 27: End user computing - growth profile
End user computing - growth profile Growth driven by accessories and new computing platforms … >5% OpInc Core PC Business ~$52.0B (+4% CAGR) • +2% EUC growth through FY16 ~$5.0 assumes no growth in PC’s $1.5+ $1.0+ $1.0+ $47.0B+ $43.4B • PC growth with market ~4% = (+2% CAGR) ~$5.0B additional reven
Slide 28: Continue to strengthen the core PC business
Continue to strengthen the core PC business Targeting market growth (~$5B opportunity) & driving $1B in cost reductions* Strengthen World Class Invest in Growth Markets Deliver Premium Value Cost Position Products • Prior efforts to reduce • Growth markets will be • Disciplined focus on complexity a
Slide 29: Provide new value
Provide new value Addressing the full range of customer needs via end-to-end solutions Optimize Accessories & Accessories & 3rd Party Software Revenue Mix 3rd Party Software FY12: FY16: • Reduce complexity, establish $10.2B Revenue $11.0B+ Revenue Goal repeatable processes • Continued revenue prunin
Slide 30: Expand our scope
Expand our scope Devices and solutions that complement the core and drive synergies with enterprise solutions and services Develop Win 8 Tablet Solutions Lead in Desktop Virtualization • Commercial customers are • Tremendous opportunity in asking for a tablet alternative desktop virtualization … tru
Slide 31: Software Group
Software Group John Swainson President, Software
Slide 32: Committed to our strategy
Committed to our strategy Delivering end-to-end solutions with scalable, mid-market design point Servers, Networking and Storage Scalable, mid-market design point IT Solutions End-to-end Services & Cloud End-User Computing Software 2012 Dell Financial Analyst Meeting
Slide 33: Dell's evolution to providing solutions
Dell’s evolution to providing solutions Solutions Focus Converged Solutions Software-led Data Converged Center Solutions Client Time 2012 Dell Financial Analyst Meeting
Slide 34: Dell leadership in software
Dell leadership in software Software’s intersection with our core strengths allows us to create solutions that bridge customers to new computing paradigms seamlessly Client Key design End-user Services, tenets computing Security, Software Leverage Dell’s Software Cloud core strengths that leverages
Slide 35: Key trends provide a unique opportunity to disrupt the status quo
Key trends provide a unique opportunity to disrupt the status quo Trend Connected Data Cloud Devices Explosion Need to access Rapid adoption Customer Need info anytime, Increasing increases anywhere on volumes of data utilization / time any device and demand for to value but increases insight requir
Slide 36: Software provides a large and profitable opportunity
Software provides a large… Software Landscape $307B Application System Software Applications Development & (incl. Security) Software Deployment Software $90B $144B $73B …and profitable opportunity Technology Industry Revenue Technology Industry Operating Margin $’s All Other IT Software All Other IT
Slide 37: We will focus on four key areas that build off our portfolio
We will focus on four key areas that build off of our current portfolio Security Systems Management AIM Business Dell Quickstart Data Warehouse Intelligence Appliance Dell Cloud Applications Business Applications 2012 Dell Financial Analyst Meeting
Slide 38: Services
Services Steve Schuckenbrock President, Services
Slide 39: Committed to our strategy
Committed to our strategy Delivering end-to-end solutions with scalable, mid-market design point Servers, Networking and Storage Scalable, mid-market design point IT Solutions End-to-end Services & Cloud End-User Computing Software 2012 Dell Financial Analyst Meeting
Slide 40: Dell Services: Enabling our customers' business outcomes
Dell Services Enabling our customers’ business outcomes Global Support Infrastructure and Applications Security and Deployment Cloud Computing and BPO Solutions Resources Multi-vendor 500,000 Driving 27X 30M apps Aging apps 29B >1B Driving forces consumed complicated, integration storage downloaded
Slide 41: Dell Services: Increased capabilities driving financial results
Dell Services Increased capabilities driving financial results Total Revenue • Continued Services revenue $7.7B +8% $8.3B growth -3% − Support & Deployment … higher +16% $2.0B +4% $2.1B attach of premium services -3% − Infrastructure, Cloud, & Security … $2.0B +2% new business wins & SecureWorks +9%
Slide 42: Dell Services: $1.8B in new signings (Q1'13 TTM)
Dell Services: $1.8B in new signings (Q1’13 TTM) Demonstrates our ability to expand our capabilities … … to new customers, … new regions, … & new verticals 23% Other 48% 40% Regions 52% Federal Existing Other + 60% 77% Verticals New Health North Care America Call center services & Operational Proces
Slide 43: The Cloud - a natural evolution for Dell
The Cloud - a natural evolution for Dell A secure enterprise-class cloud portfolio focused on business outcomes 5 Key Attributes of Our Cloud Framework Data Center Hardware • Lead in delivering the next generation of IT & Infrastructure Integration of Mobile • Establish leadership position in the hy
Slide 44: Dell Services - Cloud services, designed to scale
Dell Services - Cloud services, designed to scale Vision Be a leader in Cloud services by helping customers realize value throughout their cloud adoption journey Customer Premise Dell Premise (non-Dell Premise) Public Multi- Key Components Tenant Cloud Online Portal & Automation Private Cloud Hosted
Slide 45: Dell Services - key piece of 'grow fast' strategy
Dell Services - key piece of ‘grow fast’ strategy Investment priorities to enable FY16 revenue goal End-User Device Management Global Expansion via Scalable 6% CAGR Enhance Support & Mid-Market Design Deployment Capabilities $8.3B $10.5B+ FY12 Revenue FY16 Revenue Goal FY12 FY16 Enhance Security Dat
Slide 46: Enterprise Solutions
Enterprise Solutions Brad Anderson President, Enterprise Solutions
Slide 47: Committed to our strategy
Committed to our strategy Delivering end-to-end solutions with scalable, mid-market design point Servers, Networking and Storage Scalable, mid-market design point IT Solutions End-to-end Services & Cloud End-User Computing Software 2012 Dell Financial Analyst Meeting
Slide 48: Customer goals fuel our solution point of view
Customer goals fuel our solution point of view • End-to-end solutions, designed better together • Free to innovate – no legacy • Simplify, automate and embed expertise • Designed to scale • Practical innovation • Works with what you already have, open 2012 Dell Financial Analyst Meeting
Slide 49: Building our end-to-end capabilities (FY10)
Building our end-to-end capabilities Investing in differentiated technologies with a scalable design focus the portfolio in FY10 Consulting Hyper scale Manage Implementation Industry standard servers iSCSI Campus 3rd party branch security Element offerings Support Direct attach management Servers St
Slide 50: Building our end-to-end capabilities (FY11)
Building our end-to-end capabilities Investing in differentiated technologies with a scalable design focus the portfolio in FY11 Consulting Scale-out Cloud/ cluster Hyper scale Manage Deduplication Workload Wireless management File Implementation Industry System standard management servers iSCSI Cam
Slide 51: Building our end-to-end capabilities (FY12)
Building our end-to-end capabilities Investing in differentiated technologies with a scalable design focus the portfolio in FY12 Memory Virtualization Consulting Scale-out Core Cloud/ FC/ network cluster Hyper scale Converged Manage Managed Deduplication Workload management security Wireless service
Slide 52: Building our end-to-end capabilities (FY13)
Building our end-to-end capabilities Investing in differentiated technologies with a scalable design focus the portfolio in FY13 Memory Virtualization Application Modernization Network Consulting Data Scale-out Protection Security Core Cloud/ FC/ network cluster Hyper scale Converged Manage Managed
Slide 53: Server solutions
Server solutions Delivering the highest performing, most innovative servers Server Demand Growth* Growth Drivers $38.9B • Execute next generation transition (12G) Blade • Extend capabilities in converged infrastructure, $34.4B $9.6B Opportunity enterprise workloads, and cloud Blade +7% Density Opt •
Slide 54: Storage solutions
Storage solutions Driving innovation while reducing customer cost and complexity Storage Demand Growth* Growth Drivers $31.1B • Integrate acquired technologies across $25.1B storage platform High-end • Accelerate capabilities in file based storage $16.3B Dell Storage Mid-range +9% Portfolio • Optimi
Slide 55: Networking solutions
Networking solutions Open and optimized for the virtualization and cloud computing era Dell Networking Portfolio Growth Drivers Force10 • Disrupt traditional networking architectures Datacenter Ethernet - $17.6B Addressable Segment* • Transform from networking to managing workload delivery throughou
Slide 56: The end-to-end equation: data center convergence
The end-to-end equation Driving to a $15B goal for our Enterprise Solutions business + + + First quarter First 40GbE First enterprise-class Integrated height blade blade switch blade array management = Data center convergence 2012 Dell Financial Analyst Meeting
Slide 57: Q&A
Q&A
Slide 58: The power to do more
The power to do more 2011 Dell Financial Analyst Meeting
Slide 59: 2012 Dell Analyst Meeting
2012 Dell Analyst Meeting June 13, 2012
Slide 60: The New Dell
The New Dell Steve Felice President, Chief Commercial Officer
Slide 61: Committed to our strategy
Committed to our strategy Delivering end-to-end solutions with scalable, mid-market design point Servers, Networking and Storage Scalable, mid-market design point IT Solutions End-to-end Services & Cloud End-User Computing Software 2012 Dell Financial Analyst Meeting
Slide 62: Addressing recent challenges
Addressing recent challenges Refining execution to drive productivity Root Cause Action • Invested in specialized sales • Increasing coverage on strategic resources over past year accounts Coverage • Sales resources not optimally • Optimizing coverage across aligned with opportunity in all geographi
Slide 63: Evolving business model
Evolving business model Adjusting organizational structure to better meet our customers’ needs Regional Customer segment Enhanced customer focus Consumer Consumer SMB Public LE Public SMB LE Services 2012 Dell Financial Analyst Meeting
Slide 64: Emerging markets success
Emerging markets success Continued opportunity to grow Enterprise Solutions & Services Dell Inc. FY12, $62.1B 28 Dell China FY12, $5.2B Dell Brazil FY12, $1.8B Dell India 1984 FY12, $1.6B Dell Inc., $6M Chart not to scale 2012 Dell Financial Analyst Meeting
Slide 65: Emerging market growth driven by continued investment
Emerging market growth driven by continued investment Dell’s history in China and India China India Investments • Opened Xiamen factory (1998) • Customer Service & R&D Centers (2001) • Xiamen Customer Service Center (2000) • India manufacturing set up (2007) • Shanghai Design Center (2002) • Consume
Slide 66: The New Dell
The New Dell Kim Hibler Cheryl Cook VP & GM, SMB North America and VP, Global Enterprise Public and Large Enterprise Canada Solutions
Slide 67: Scalable design focus resonates with customers
Scalable design focus resonates with customers • “Trusted advisor” - long-term relationship Customer Focused • Healthy multi-channel go-to-market model enables customers to buy how they want to buy • Scales with usage Scalable End to End • Turnkey services & solutions drive rapid adoption Solutions
Slide 68: Enterprise solutions & services success in SMB
Enterprise solutions & services success in SMB Focus on customer and differentiated solutions enabling growth Enterprise Solutions & Services Examples of SMB solution SMB revenue success +18% Y/Y Growth • Focus on ease of doing business… “Pre-Flight” remote installation program delivering perfect sa
Slide 69: Enterprise sales momentum
Enterprise sales momentum Broad initiatives across strategic sales force • Selling from position of strength • First to market with next generation servers Servers • Bundle servers in broader, easy to manage solutions Converging of Compute, such as vStart 3-2-1 (3 servers, 2 switches, and 1 storage
Slide 70: TGEN: precision treatments for pediatric cancer
TGEN: precision treatments for pediatric cancer Neuroblastoma: 5 days for personalized treatment Patient / Physician Analytical tool for Integration of Complete molecular mapping patient data diagnosis, Tumor sample characterization of scientific & clinical against database for treatment, ongoing th
Slide 71: Q&A
Q&A
Slide 72: The power to do more
The power to do more 2011 Dell Financial Analyst Meeting
Slide 73: Committed to our strategy
Committed to our strategy Delivering end-to-end solutions with scalable, mid-market design point Servers, Networking and Storage Scalable, mid-market design point IT Solutions End-to-end Services & Cloud End-User Computing Software 2012 Dell Financial Analyst Meeting
Slide 74: 2012 Dell Analyst Meeting
2012 Dell Analyst Meeting June 13, 2012