Dell Technologies Inc. has an ambitious plan moving into 2020. The key question: Can it execute the plan successfully in the face of competitive pressure from large tech giants and signs of a slowdown in several critical markets?

Top executives from Dell met with financial analysts last week and outlined the company’s strategic approach. Key takeaways from the gathering were that the company intends to pay down its debt from the EMC acquisition, reduce interest expenses and streamline its storage portfolio from more than 80 products to 20 by May of next year, Dave Vellante, co-host of theCUBE, said in a breaking video analysis at SiliconANGLE Media’s mobile livestreaming studio in Boston.

“The strategy is to capitalize on vendor consolidation and leverage value across the portfolio,” Vellante said. “Dell believes that information technology is getting more complex. They want to capitalize on that by simplifying IT.” (See the full discussion with transcript here.)

Focus on VMware integration

With its prominent position as a virtualization, storage and server provider, Dell intends to leverage the strength of VMware Inc.’s enterprise influence to lift its diverse business. That was made clear to analysts last week by Jeff Clarke, Dell’s vice chairman of products and operations.

“There’s a big focus in Jeff Clarke’s organization on VMware integration,” Vellante said. “This makes a lot of sense. Frankly, the ecosystem has no choice; it must serve VMware customers.”

Aside from streamlining its portfolio, Dell has also been fine-tuning its data protection storage capabilities. Recent announcements, such as the introduction of its next-generation Data Domain protection storage appliances, highlight the company’s renewed storage focus.

“They’re gaining back share; they’ve refocused on the storage business,” Vellante said. “They’ve gained back about 375 basis points in the last 18 months.”

Signs of spending slowdown

Dell’s future progress will have to weather indications of a slowdown in spending for both servers and storage. Recent survey data from Enterprise Technology Research for the period from October 2018 to July of this year shows that servers, as a percentage of overall information technology spending, are on a downward slope, according to Vellante.

The same is true for storage, with Dell EMC occupying a position in the middle of the pack relative to the competition.

“Storage is still working through the all-flash injection,” Vellante said. “There’s been somewhat of a lull in the overall storage market. It’s not a great market right now at the macro level.”

ETR will be issuing updated survey results in October, and the research firm provided Vellante with a hint at what the most recent data may show as enterprise IT organizations move from experimenting with new technologies to putting them into production.

“New adoptions are reverting to pre-2018 levels, and the replacements are rising,” Vellante said. “They’re making their bets. They’re saying, ‘Let’s put this heavily into production in 2019 and now we’re going to start replacing.’”

Dell executives told analysts that they believe the company is well positioned to capitalize on the trend of consolidating providers and grow faster than the market. Success will depend on how effectively it can execute the strategy outlined last week.

“Dell’s got a lot of valuation levers,” Vellante noted. “They can expand their total addressable market into cloud with partnerships like they’re doing with AWS and others. This is ‘show me,’ prove it, execute, and then I think that Dell will get rewarded.”

Here’s the complete video analysis, one of many CUBE Conversations from SiliconANGLE and theCUBE:

Photo: Dell