Once a company is approaching $100 billion in revenue, creating substantial growth gets a lot harder.
That’s the challenge that faces John Roese and his colleagues at Dell Technologies, the technology and services provider based in Round Rock, Texas. You can’t just keep looking for ways to keep expanding the market for today’s core products, Roese says: “You need to find some new areas to play in.” To do that, Roese oversees ongoing assessments of emerging technologies like virtual reality, quantum computing, and blockchain to identify where Dell should be placing bets.
Roese serves as the Global CTO of Dell, and previously he was CTO of EMC, the data storage company that merged with Dell in 2015. He has also worked in R&D at Huawei, and as CTO at Nortel and Broadcom. He spoke with InnoLead as part of our interviews for the research report “Delivering Value Through Emerging Tech and Innovation.”
Innovation needs to drive growth. The purpose of innovation is to find new ways to grow our business — not to just show cool technology. But the byproduct is developing cool technology. You just need to know its place. It’s not to distract corporate strategy.
My span of control. My span of control is quite small — it’s hundreds of advanced technologists and strategists. But my sphere of influence is the entire company. I have to influence partners, the ecosystem, governments. That’s a really useful [way to look at it]: What’s your span of control and what’s your sphere of influence? Most CTO jobs are influence jobs. At a company like Dell, somebody has to be on the hook to tell you what the technology ecosystem is telling you, and how to exploit new technology for your advantage.
My job is to make sure Dell Technologies doesn’t drive off a cliff because we missed a technological inflection.
Scale versus velocity. The idea around [doing] early innovation around white space opportunities, or incubating things through a ventures organization — most large companies do that really terribly. The larger the company is, the more likely they are to be biased toward a scale operating model, versus a velocity operating model. Amazon is desperately trying to hold onto the velocity model while they’re scaling.
We’ve developed a structure which essentially is two strategies running in parallel.
One is to consolidate and aggregate our core business; we are the largest provider of computers and storage and clients like the XPS 15 laptop. How do we get more scale? If we have 50 percent of the market for high-end storage, how do we get the other 50 percent? That can be pricing, better service, better go-to-market. If you have a product that is better than the alternative, then people want to buy you.
The automotive industry is turning itself on its head. It’s becoming a digital, software, and computing industry. That has got our interest.
The second innovation vector is, how do we grow and expand the business? To grow a $94 billion company, you need to find some new areas to play in. We used the technology radar [process] to identify 12 areas, including things like distributed ledgers, AR, and VR. The best addressable markets for us, for a company of our size and capability, is in markets that are adjacent to us, and are moving toward us — are colliding with our existing markets.
As an example, the automotive industry is turning itself on its head. It’s becoming a digital, software, and computing industry. That has got our interest. We’re looking at it deeply. We are already working with automobile manufacturers on their IT needs. But is that industry moving toward us in a way that we might play a bigger role?
The technology radar process. The technology radar, for us, isn’t a thing. It’s a process. I have a whole team whose job in life is to develop technology that puts me out of business. We’re looking for domains and areas where there’s a disruption happening. Back in the early days, we tracked distributed ledgers and blockchain. That has to be on our radar; whether or not you care about blockchain, you as a company should be looking at all technologies that are potentially intersecting with your world. We concluded that [blockchain] was just a workload running on our infrastructure, but not a big bet Dell should make. We looked at AR and VR, and concluded, “Interesting technology, but not a material enough market for Dell.” It’s not what we do, and not big enough to be interesting. What we now call the Strat 6 technologies came out of that process, and they include areas like AI and machine learning, the multi-cloud world, data management, and security.
I have a whole team whose job in life is to develop technology that puts me out of business. We’re looking for domains and areas where there’s a disruption happening.
How we chase opportunities. [To pursue opportunities related to those technologies,] we might do extended incubations; we’re ramping that capability up. We may need to place more of those bets. We might create a separate group in business unit, but empower them to operate independently. The key is, what’s your forcing function to do innovation? It’s very clear in my mind that it’s growth. Growing a $100 billion company is not trivial. You need to find billions of dollars of [new total addressable market] every year. Our entire tech strategy is trying to figure out where those are going to be, so we can prepare for it, and be in the right place at the right time.
Quantum computing as an example. If we’re a supertanker, we don’t…want to be chasing [flashy emerging technologies] all over the place. But I have a large research organization that has a charter to explore. We have been building quantum simulators, and doing quantum key management. None of those things are mainstream, but we’re doing it to understand when those things will become mainstream. I don’t want our salespeople running around trying to sell quantum systems right now, but want to understand it. Twice a year, I would send a note to our senior leaders about quantum: “Here’s what we’ve learned.” [Recently,] the note essentially said, “There’s nothing we need to do right now — no new products, no revenue. It will be noisy. But if people want to talk about our opinion of quantum, send ’em to me.”
Getting to consensus. How do we get to consensus? We include about 500 people in our technical leadership community — our best and brightest. They give us as much input as they can. That process will winnow down [the areas of interest.] Then, the process comes up to me, [and co-Chief Operating Officers] Jeff Clarke and Chuck Whitten, and the business unit leaders, to have a discussion about which of these we think make sense.
Is this a technology that is adjacent [to one of our existing markets], and is it moving toward us? All the things we pursue fit that pattern.