Q&A: Paul Prince, chief technology officer at Dell

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Despite hard times in the economy, Dell has continued to release new products, throw money into research and development and make a number of high-profile acquisitions.

But how has the company really coped over the past few years of economic turmoil and are the company’s customers ready to invest again in its portfolio?

We get some one on one time with the firm’s chief technology officer, Paul Prince, to find out.

We seem to be creeping out of the recession right now but how has it affected Dell and are you starting to see the light at the end of the tunnel?

I think first of all it affected everyone – Dell, other IT providers and our customers – in a sense that we all had to just go back and, not just sharpen our pencils on our budgets, but really re-examine how we do things.

So that played out in a couple of areas for Dell, both signs of the coin if you will, because we are both a big consumer of IT through our dell.com and online sales and how we run our business, and a provider of IT.

We have spent a lot of time and energy over the last two and a half to three years I would say – we were really kind of headed this way before the recession hit but the recession doubled down or tripled down our efforts – focusing on how IT was applying technology intelligently to get more efficient.

If you look at the history of Dell, we have been running at about $1 billion per year expense on IT so we have a very large IT budget. As we started benchmarking ourselves, we realised that the vast majority of this, some years even in excess of 90 per cent of that money, was being spent in what you might call keeping the lights on. We had so much legacy in terms of equipment and applications and business processes that it was really a tangled web if you will.

So we have spent the last few years working our way out of that mess and we have used virtualisation as a key technology and lever point… so we are able to free up a significant portion of our IT budget, get it away from just keeping the lights on and free up those dollars to actually use in business innovation.

Our IT team loves to tell what we call the Dell on Dell story, which is using Dell IT infrastructure and becoming more efficient at it. We have literally saved tens of millions, I think on operating costs… it is north of $50 million in the last couple of years.

We have saved a lot of money because we have been more aggressive on virtualisation technologies and consolidation. We have reduced both CAPEX and interestingly enough OPEX. With virtualisation, as we have got smarter at it, has proved to be a way to reduce OPEX expenses [as well].

That is to say, most people think of virtualisation as a way to buy fewer servers, which is absolutely true, but if you look at the virtualisation technologies and how [they've] evolved, and the solutions that Dell has around virtualisation, it becomes much easier to manage the resources and deploy the resources and therefore you can reduce your OPEX expenses.

So we have taken a lot of that money we have saved and we are ploughing it back into some strategic investments in the business. That is a good thing for Dell. Then we have also been trying to be pretty aggressive about taking that story on the road to our customers, and helping our customers to make the same journey.

That is the way it has affected us. I think it is a substantial way, but it is very positive for our company and our customers.

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