Dell Technologies FY 4Q17 Earnings Call Notes

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Tom Sweet

It’s a rising component cost environment

It’s Tom. So look, it’s obviously I think the people that you’ve talked to and what they are saying publicly is relatively consistent in the context of there is a rising component cost environment right now. On the Client side we see it in memory, we see it in glass and LCD panels. On the server side and storage side, we are seeing it in SSD drives and memory. So it’s all about balance, right.

David Goulden

Cloud isn’t a place it’s an operating model

So everything gets cloud washed, Steve, these days and I think I am aware of the particular report which you are talking about. So first of all, cloud is not a place, it’s an operating model and the operating model can be applied on-prem or off-prem. It’s really providing IT as a service. And I think that everybody is going to implement some form of hybrid cloud. So it’s also a combination of both. When you look at the kind of IT infrastructure marketplace, as we do that have service storage network, combined marketplace about $110 billion this year, we see strong double-digit growth in that infrastructure being sold into private cloud and into public clouds, but the biggest piece is still a non-cloud environment often virtualized.

Customers still making tactical decisions

“what we’re seeing is in the marketplace customers are still making tactical decisions. There’s a lot of work going on to look at IT transformation and future architectures. So the customers who haven’t made those decisions yet in terms of what their IT transformation strategy is are still doing it very much by what they need and the more approach, different from how they were buying a couple of years ago. The customers who are moving forward with transformation are making longer term decisions, but that’s still a smaller piece of the marketplace.”

All flash is not deflationary

“So you’ve got a number of factors. I would comment that the move to all-flash is actually not deflationary for the storage marketplace because what happens is that all-flash is actually more expensive but then with data services, [indiscernible], compression, et cetera, you get the same dollar to gigabyte effectively as you do with the hybrid system. So that’s one of the things that people talk about that we don’t see being a factor.”