Dell Technologies Inc. · NYSE:DELL

Dell Technologies — Investor Day (April 2008)

76 slides from Dell Technologies's investor day presentation, Apr 3, 2008

Slide 2: Dell Equity Analyst Meeting – Lynn A. Tyson
DELL EQUITY ANALYST MEETING Lynn A. Tyson Vice President, Investor Relations April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 3: April 3, 2008 Agenda
APRIL 3, 2008 AGENDA 7:00 – 7:45 BREAKFAST 7:45 – 7:50 WELCOME Lynn A. Tyson, Vice President, Investor Relations VALUE CREATION 7:50 – 8:10 Initiatives, Operations and Cost Michael Dell, Chairman and CEO 8:10 – 8:25 Financial Overview Don Carty, Vice Chairman and CFO 8:25 – 8:40 Q&A Michael Dell and
Slide 4: Safe Harbor
SAFE HARBOR All statements made during these presentations that relate to future results and events are forward-looking statements that are based on our current expectations. Actual results could differ materially from those projected in the forward-looking statements because of a number of risks an
Slide 6: Assets and Challenges
ASSETS CHALLENGES • Long List of #1s • Declining Share • $60B+ Global Customer Base • Wrong Cost Structure • Direct Customer • Eroded Profitability Relationships • Too Many “Priorities” • Strong Balance Sheet & Cash Flow • Incomplete Product Coverage • World-renowned Brand & Choice of Enterprises WW
Slide 7: We Have Begun the Journey to Address These Challenges
WE HAVE BEGUN THE JOURNEY TO ADDRESS THESE CHALLENGES Challenges Our progress on the journey Long-term goal • Declining share Sustained growth Reduced 5.5K HC*, Re-established premium supply chain plan growth premium • Wrong cost $3B in cost structure GM improved; opportunity plan on OPEX • Eroded S
Slide 8: Growing Revenue and Units (Y/Y)
GROWING REVENUE AND UNITS (Y/Y) Q4 Q3 Q4 FY’07 FY’08 FY’08 Revenue - 5% 9% 10% Units - 11% 9% 19% 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 9: Actions to Enhance Competitiveness – $3B Annual Savings
ACTIONS TO ENHANCE COMPETITIVENESS – $3B ANNUAL SAVINGS Reduce COGS Decrease OPEX • Optimize global • Reduce compensation manufacturing network and benefit costs • Redesign supply chain • Decrease headcount • Cut development time • Improve productivity • Design for customer • Tighten discretionary r
Slide 10: Regional and Channel Hardware Revenue Opportunity
REGIONAL AND CHANNEL HARDWARE REVENUE OPPORTUNITY Significant Opportunity Large Channel Outside North America* Revenue Opportunity* $317B $44B $317B $44B 100% 100% Latin Am VAR/SI/ 21% Reseller 75% APJ 75% 73% 50% 50% Retail EMEA 54% 25% 25% Direct North Am. 24% 0% 0% Opportunity* Dell FY08 Opportun
Slide 11: Opportunity Grows with Addition of Services Revenue
OPPORTUNITY GROWS WITH ADDITION OF SERVICES REVENUE* Large Incremental Services Opportunity Every $1 HW spend equates to an additional $2 of global infrastructure spend $1.2T $61B 100% Addressable 75% Services 50% Storage 25% Servers Notebook Desktop 0% Opportunity Dell 2011 5% Share FY‘08 * IDC 200
Slide 12: Clear Priorities
CLEAR PRIORITIES CORE KEY INITIATIVES World-Class World-Class Competitiveness Consumer Low Cost and Expenses Enterprise CHANNEL Any -to-Any Any-to-Any Supply Chain Notebooks Services and Small and Medium Enterprise Solutions Sales Emerging Countries Effectiveness 2008 Dell Equity Analyst Meeting •©
Slide 13: Industry vs Dell
INDUSTRY VS DELL* Dell business mix weighted to lower risk and slower growing Corporate and Public segment CY07 FY08 CY08 Industry* Dell Industry* Y/Y Growth Y/Y Growth Y/Y Growth 268M 40M 15% 5% 13% 100% Corporate 80 8% 10% 9% WW PC Units (M) 60 SMB 40 15% 9% 15% 20 Consumer 19% -12% 14 0 Industry
Slide 14: Large Commercial and Public: Expand Strong Core Business
LARGE COMMERCIAL AND PUBLIC: EXPAND STRONG CORE BUSINESS Commercial Hardware Share* 50% Situation: 41% • #1 share World-wide; North Am. 40% 36% and EMEA with 41% and 36% 30% share 23% • Broad and respected products 19% 20% 15% 14% • Advantaged business model 10% 8% • Strong brand 0% Actions: North W
Slide 15: Small and Medium Enterprises: Target and Reach More Global Customers
SMALL AND MEDIUM ENTERPRISES: TARGET AND REACH MORE GLOBAL CUSTOMERS Situation: Vostro Products • #1 North Am. 28% share and only 10% ROW • Massive channel opportunity • Strong brand Actions: • Adding small business products • Growing services platform • Simplifying IT • Expanding global channels 20
Slide 16: Consumer: Improve Profitability and Grow
CONSUMER: IMPROVE PROFITABILITY AND GROW Situation: • Profit challenged • Improved products and services • Grew U.S. units 25% Y/Y in Q4 More than 10,000 • North Am. CY07 share 19%; ROW only 4% retail stores globally Actions: • Optimizing supply chain and reducing operating expenses • Building out c
Slide 17: Long-Term Goals
LONG-TERM GOALS • Sustained growth premium • $3 billion annualized cost opportunity • Sustained EPS growth • Leading performance on 5 core initiatives • Best-in-class products for all segments • Retail / partner channel at scale 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 20: Cash Flow Generation
CASH FLOW GENERATION • Drive to a balance of liquidity, profitability and growth • Grow faster than the industry • Improved profitability yields improved cash flow generation Net Income 6 Cash Flow Ops 5 4 $B 3 2 1 0 FY04 FY05 FY06 FY07 FY08 Cash Balance ($B) $11.9 $14.1 $11.8 $12.4 $9.5 2008 Dell E
Slide 21: Capital Allocation
CAPITAL ALLOCATION • Return cash to investors through share repurchase - $4B in Q4 and at least $1B in Q1 • Retain flexibility for targeted acquisitions that support five priorities (spent $2.2B on acquisitions in FY’08) • Capex to remain stable in FY’09 with shift over time from manufacturing to ot
Slide 22: Dell Financial Services Strategic Assessment
DELL FINANCIAL SERVICES STRATEGIC ASSESSMENT • DFS is a very strong asset and contributor to Dell, especially in the consumer space, which we believe can be optimized further • Goals: – Expand product offerings for customers – Accelerate investments in DFS – More efficient way to fund DFS • Assessme
Slide 23: $3B Total Cost Opportunity – Over Three Years FY09-FY11
$3B TOTAL COST OPPORTUNITY – OVER THREE YEARS FY09-FY11 • Improve productivity • Decrease headcount OPEX • Tighten discretionary • Reduce spend compensation & benefits costs • Cut development • Design for customer Products & time requirements Procurement • Optimize global • Deliver regional & manufa
Slide 24: Headcount Progress
HEADCOUNT PROGRESS • Headcount reduction of at least 8,800, excluding acquisitions • 5,500 heads out last nine months of FY’08 • Increase mix of frontline • Making investments in financial systems to reduce people dependent processes and improve controls 100 88.9 91.1 89.1 88.2 Dell Employees (in 00
Slide 25: Commitment to Cost Reduction
COMMITMENT TO COST REDUCTION • Invested in organizational talent to fill gaps • Expect to achieve historical opex/revenue scaling levels • Marked OPEX improvements will be backend loaded in FY’09 40% Future/ Conceptual 30% 20% 10% 0% -10% Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 R
Slide 26: Operational Framework
OPERATIONAL FRAMEWORK LONG TERM GOALS • Sustained growth premium & EPS/CFO growth • $3B annualized cost opportunity by fiscal 2011 • Leading performance on 5 core initiatives • Best-in-class products for all segments • Retail / partner channel at scale EMERGING COUNTRIES NOTEBOOKS ENTERPRISE SME CON
Slide 28: Introduction to Growth Initiatives
INTRODUCTION TO GROWTH INITIATIVES Mark Jarvis Chief Marketing Officer April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 30: Emerging Countries – Big Opportunity, Growing Bigger
EMERGING COUNTRIES – BIG OPPORTUNITY, GROWING BIGGER By 2012, BRIC+10 will constitute 38% of the world’s PC shipments, up from 11% in 1996, and 22% in 2004 Actual Forecast 500 400 Brazil Units (Millions) Russia 300 India 200 China Next 10 EC 100 Other* 0 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 31: Q4 CY07 BRIC+10 Share – Commercial
Q4 CY07 BRIC+10 SHARE – COMMERCIAL $12B Revenue 6.9M 1.8M 1.5M 1.1M 3.1M Q4 CY07 YoY ∆ 100% % of Total PC/Server Units 80 Other Other Other 54.56% (4.36%) 60 Other Other Lenovo Lenovo 17.92% 0.47% 40 Lenovo Acer Acer 4.91% 1.36% Lenovo HP HP 12.56% 1.29% 20 HP Acer HP HP Dell Dell Dell Dell 10.06% 1
Slide 32: Significant Footprint in Emerging Countries – Gaining Momentum
SIGNIFICANT FOOTPRINT IN EMERGING COUNTRIES – GAINING MOMENTUM Greater China:* #3 to #2 in India: #4 to #3 in Commercial in Q4 with Commercial in Q4 with 10.9% share 12.0% share • PRC moved from #2 to #1 in • Grew annual units >40% Y/Y for 5 Enterprise/Server straight years dating back to 2003 • >50
Slide 33: Commercial Customer Needs
COMMERCIAL CUSTOMER NEEDS EMERGING DELL ADVANTAGE DEVELOPED Help with Massive, Speed of Direct Optimize IT Rapid Deployment Standards-Based, Investments Scalable Solutions Great Value to Acquire Flexibility in Reduce Total Cost Reliable Technology Configurations of Ownership Leading IT that’s Simpli
Slide 34: Emerging Countries Strategy
EMERGING COUNTRIES STRATEGY • Direct Model Go to Market • Channel Coverage • Branding • Products Offerings • Services • Enterprise Solutions • Customer Experience Enablers • Channel Management • Logistics 2008 Dell Equity Analyst Meeting © 2008 Dell Inc. All rights reserved.
Slide 35: Emerging Countries Q&A
EMERGING COUNTRIES Q&A Steve Felice SVP & President, Asia-Pacific/Japan Paul Bell SVP & President, Americas Dave Marmonti SVP & President, EMEA April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 37: Small and Medium Enterprises
SMALL AND MEDIUM ENTERPRISES Dave Marmonti President, Europe, Middle East and Africa April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 38: Small and Medium Enterprises: Did You Know?
SMALL AND MEDIUM ENTERPRISES DID YOU KNOW? Last 5 Years Next 5 Years • ~482 million new • ~508 million new SME’s created SMEs created • $481 billion spent • $517 billion projected on IT spend on IT • Only 15% of SMEs have a full-time IT staff 2008 Dell Equity Analyst Meeting © 2008 Dell Inc. All rig
Slide 39: Commercial Market – Small and Medium Enterprises
COMMERCIAL MARKET - SMALL AND MEDIUM ENTERPRISES 85% white space opportunity, or $79B which doubles when you consider services •Worldwide Commercial SME Hardware spend (IDC 2006) •85% •Other •Dell •15% pe ic a P pe n ca rica ro er •A r o a r i E u m Eu J ap /Af me n A st • st A t er or th E a . a E
Slide 40: Small and Medium Enterprises
SMALL AND MEDIUM ENTERPRISES Public Corporate SME Corporate SME Decentralized Developed Emerging SME Countries Countries SoHo Micro Lack resources and budget Limited resources and budget Minimal internal systems Few internal systems Rudimentary infrastructure Simple infrastructure Online, retail and
Slide 41: Simplifying IT for SME
SIMPLIFYING IT FOR SME Sub- Segmentation ITaaS Increase Revenue Deepen Our Penetration And Customer Optimize Marcom Relationship Spend SME Designed Products & Services Provide Quality Products at a CRM Great Value Flexible Global Channel Strategy Create Highly Personalized Capture The Experience Cha
Slide 42: What Differentiates Us
WHAT DIFFERENTIATES US y Trusted brand y Access to enterprise-quality IT infrastructure y State-of-the-art remote technologies y Fast, efficient response time y Regional, national, and global y Reduced complexity, costs y Ability to bundle with hardware “Dell is so easy to do business with. They kno
Slide 43: Small and Medium Enterprises Q&A
SMALL AND MEDIUM ENTERPRISES Q&A Dave Marmonti President, Europe, Middle East and Africa Mark Jarvis Chief Marketing Officer Steve Schuckenbrock President, Global Services and CIO April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 45: Global Consumer: A Business in Transition
GLOBAL CONSUMER A BUSINESS IN TRANSITION Progress More to do Share Re-established growth; Expand growth gained 1.8 pts WW and premium 6.9 pts in U.S. Cost Structure Reconfigured sales, Reduce fixed & variable cost marketing and services both in COGS and OpEx Profitability Aggressive OpEx Deliver imp
Slide 46: 6 Brands Through Multiple Channels
Our strategy is to drive our 6 brands through multiple channels more effectively than anyone else 2008 Dell Equity Analyst Meeting © 2008 Dell Inc. All rights reserved.
Slide 47: 6 Brands
6 brands XPS Premium performance Dell S&P Alienware Software and Peripherals Gaming Dimension Inspiron Great value Youthful and expressive Zing Entertainment 2008 Dell Equity Analyst Meeting © 2008 Dell Inc. All rights reserved.
Slide 54: Global Consumer Q&A
GLOBAL CONSUMER Q&A Ron Garriques President, Global Consumer Group Tony Weiss VP, Global Consumer S&P and Retail Michael Tatelman VP, Global Consumer Sales and Marketing Ray Roman VP, Global Consumer Customer Care April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 56: Notebooks Represent Huge Opportunity
NOTEBOOKS REPRESENT HUGE OPPORTUNITY $137B 2008 WW Market Explosive Growth In 2007: 1 Billion Brazil Grew 4.5x the Market Notebooks To Be Sold China Grew 2x Over Next 5 Years And India Grew 2.4x More Notebooks Sold than Desktops By 2009 7x Notebooks to Outpace Desktop Growth in 2008 2008 Dell Equity
Slide 57: Four Imperatives to Grow the Business
FOUR IMPERATIVES TO GROW THE BUSINESS Expand customer set Open new channels Launch game changing products Reduce our costs while designing and delivering the right products for each and every customer 2008 Dell Equity Analyst Meeting © 2008 Dell Inc. All rights reserved.
Slide 58: Significant Investment in Notebook Business
SIGNIFICANT INVESTMENT IN NOTEBOOK BUSINESS # of Products Category Coverage # of Notebook Platforms Developed Comm Consumer 3x increase 95% coverage FY07 FY08 FY07 FY09 Budget Spent Cycle time Development Cycle Time (wks) Notebook Development Spend 44% 35% Consumer increase reduction Comm Consumer C
Slide 59: Expand Addressable Market
EXPAND ADDRESSABLE MARKET • 2008 NB industry is 136M units in total growing at a 19% CAGR (2007-2011) • Commercial segment is 18% of the industry and Dell is the #1 provider with 28% share WW • Large growth opportunities in consumer, SME and EC Consumer SME Emerging Countries 100 106 80 80 78 73 19%
Slide 60: Consumer
CONSUMER • ~50% of NB units growing at a 19% CAGR (2007-2011) • Dell has room to grow from our 9% WW share in 2007 What Has Changed? • Dedicated consumer business with unique product offering for consumers in developed and emerging countries • Global retail expansion • Aggressively shifting to new f
Slide 61: SME
SME • ~33% of NB units growing at a 20% CAGR (2007-2011) • Dell has room to grow from our 14% WW share in 2007 What Has Changed? • Dedicated brand and product line • Integrated product line with service acquisition/offerings • Unique solutions designed specifically for SMEs • Delivering the right fe
Slide 62: Emerging Countries
EMERGING COUNTRIES • ~30% of NB units growing at a 26% CAGR (2007-2011) • Dell has room to grow from our 9% WW share in 2007 What Has Changed? • Geographic-specific product and service offerings • Dedicated design center • Optimized design and cost engineering for fastest growing price bands • Fast
Slide 63: Dell Differentiation: Why Dell Wins in Notebooks
DELL DIFFERENTIATION WHY DELL WINS IN NOTEBOOKS Simplifying I/T Innovation and differentiated features Expanding segment coverage with more targeted platforms Build on our direct customer understanding to uniquely address customer needs Cost competitive across all price bands and more outlets 2008 D
Slide 64: Notebooks Q&A
NOTEBOOKS Q&A Jeff Clarke SVP, Business Product Group Steve Felice SVP & President, Asia-Pacific/Japan Alex Gruzen SVP, Consumer Product Group April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.
Slide 67: Enormous Enterprise Opportunity: Total Solutions Based Approach
ENORMOUS ENTERPRISE OPPORTUNITY TOTAL SOLUTIONS BASED APPROACH CY2007 $290B $12.6B $15B Break Fix Svcs 9.1% Dell’s share $43B Infrastructure Svcs 1.2% only 4.4% $97B Other Svcs 0.0% $25.2B $87B Software 2.9% total opportunity even if Dell just $18B Storage 11.2% doubles its share $30B Servers 21.7%
Slide 68: The Tipping Point
THE TIPPING POINT 60% 4x Companies Expect Systems Mgmt Costs Major Facilities Upgrade Outpace Server Cost 67% 40% View Virtualization 10x As Mission Critical 52% Will Spend More On Blades iSCSI San Growth Over Next 3 Years Companies Will Place Higher Value on Green Products 2008 Dell Equity Analyst
Slide 69: Enterprise Strategy
ENTERPRISE STRATEGY Leader w/ Build Solutions Solutions Disruptive Enterprise Engagements Delivery Credibility Solutions Industry Leading Platforms Convergence to Ethernet Virtualization Green IT Cloud Computing Create Deliver Capture Value Value Value 2008 Dell Equity Analyst Meeting © 2008 Dell In
Slide 71: Convergence to Ethernet
CONVERGENCE TO ETHERNET Leader with Solutions Engagements Solutions Delivery Disruptive Solutions • #1 WW iSCSI • End-to-end IP SAN solutions provider solutions (Gartner) • Extension of DELL EQUALLOGIC PS5000 SERIES • iSCSI provides storage business superior capabilities into storage VARs for virtua
Slide 72: Virtualization
VIRTUALIZATION Leader with Solutions Engagements Solutions Delivery Disruptive Solutions EMBEDDED HYPERVISOR Dell + VMware and others • Online advisory, • Professional services sizing and geared towards both architecture tools technical and operational readiness • Extensive field training in solutio
Slide 73: Cloud Computing
CLOUD COMPUTING Leader with Solutions Engagements Solutions Delivery Disruptive Solutions • Cloud optimized servers & storage co-developed with • cut power • DCS now powers: customers consumption 30% • 3 of global top 4 • Joint data center IT with optimized search engines equipment optimization; ser
Slide 74: Enterprise Q&A
ENTERPRISE Q&A Brad Anderson SVP, Business Product Group Mark Jarvis Chief Marketing Officer Paul Bell SVP & President, Americas Steve Schuckenbrock SVP & President, Global Services & CIO April 3, 2008 2008 Dell Equity Analyst Meeting •© 2008 Dell Inc. All rights reserved.

Dell — Investor Day (April 2008) on 6ix

Dell Technologies — Investor Day (April 2008)

Slide 1: Dell Equity Analyst Meeting

Slide 2: Dell Equity Analyst Meeting – Lynn A. Tyson

Slide 3: April 3, 2008 Agenda

Slide 4: Safe Harbor

Slide 5: Initiatives, Operations and Cost

Slide 6: Assets and Challenges

Slide 7: We Have Begun the Journey to Address These Challenges

Slide 8: Growing Revenue and Units (Y/Y)

Slide 9: Actions to Enhance Competitiveness – $3B Annual Savings

Slide 10: Regional and Channel Hardware Revenue Opportunity

Slide 11: Opportunity Grows with Addition of Services Revenue

Slide 12: Clear Priorities

Slide 13: Industry vs Dell

Slide 14: Large Commercial and Public: Expand Strong Core Business

Slide 15: Small and Medium Enterprises: Target and Reach More Global Customers

Slide 16: Consumer: Improve Profitability and Grow

Slide 17: Long-Term Goals

Slide 18: Initiatives, Operations and Cost

Slide 19: Financial Overview

Slide 20: Cash Flow Generation

Slide 21: Capital Allocation

Slide 22: Dell Financial Services Strategic Assessment

Slide 23: $3B Total Cost Opportunity – Over Three Years FY09-FY11

Slide 24: Headcount Progress

Slide 25: Commitment to Cost Reduction

Slide 26: Operational Framework

Slide 27: Q&A

Slide 28: Introduction to Growth Initiatives

Slide 29: Emerging Countries

Slide 30: Emerging Countries – Big Opportunity, Growing Bigger

Slide 31: Q4 CY07 BRIC+10 Share – Commercial

Slide 32: Significant Footprint in Emerging Countries – Gaining Momentum

Slide 33: Commercial Customer Needs

Slide 34: Emerging Countries Strategy

Slide 35: Emerging Countries Q&A

Slide 36: Break

Slide 37: Small and Medium Enterprises

Slide 38: Small and Medium Enterprises: Did You Know?

Slide 39: Commercial Market – Small and Medium Enterprises

Slide 40: Small and Medium Enterprises

Slide 41: Simplifying IT for SME

Slide 42: What Differentiates Us

Slide 43: Small and Medium Enterprises Q&A

Slide 44: Global Consumer

Slide 45: Global Consumer: A Business in Transition

Slide 46: 6 Brands Through Multiple Channels

Slide 47: 6 Brands

Slide 48: Multiple Channels

Slide 49: More Effectively Than Anyone Else

Slide 50: Build Brand Lust

Slide 51: Focus on BRIC, Grow Faster Than the Industry

Slide 52: Build Annuity Streams

Slide 53: Dell Differentiation: Unrivaled Customer Intimacy

Slide 54: Global Consumer Q&A

Slide 55: Notebooks

Slide 56: Notebooks Represent Huge Opportunity

Slide 57: Four Imperatives to Grow the Business

Slide 58: Significant Investment in Notebook Business

Slide 59: Expand Addressable Market

Slide 60: Consumer

Slide 61: SME

Slide 62: Emerging Countries

Slide 63: Dell Differentiation: Why Dell Wins in Notebooks

Slide 64: Notebooks Q&A

Slide 65: Lunch

Slide 66: Enterprise

Slide 67: Enormous Enterprise Opportunity: Total Solutions Based Approach

Slide 68: The Tipping Point

Slide 69: Enterprise Strategy

Slide 70: Building Enterprise Credibility

Slide 71: Convergence to Ethernet

Slide 72: Virtualization

Slide 73: Cloud Computing

Slide 74: Enterprise Q&A

Slide 75: Executive Leadership Team Q&A

Slide 76: Dell Equity Analyst Meeting