Dell Technologies World 2026 | Doug Schmitt & Scott Bils, Dell Technologies

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More from Dell Technologies World 2026

Doug Schmitt

CIO & President

Dell Technologies

Scott Bils

VP, Professional Services

Dell Technologies

play_circle_outline Dell as Customer Zero: CIO Uses Internal AI and Product‑Service‑IT Synergy to Speed Customer Value

play_circle_outline AI Reshaping Priorities and the Services Role Across Use Cases, Data, Infrastructure, Operations, and Security

play_circle_outline Dell AI Factory: Governance, Data Lineage, and Partner Ecosystems Driving Customer Outcomes

play_circle_outline Customer example: Sandisk vision AIoT achieved lights-out manufacturing, lower defects and costs

play_circle_outline Skills gap and operational scaling require expanded managed services and agent management solutions

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Doug Schmitt & Scott Bils, Dell Technologies

Doug Schmitt

CIO & President Dell Technologies

Scott Bils

VP, Professional Services Dell Technologies

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Gemma Allen

>> Welcome to day three here in Las Vegas. It's Dell Technology World 2026. I'm Gemma Allen at theCUBE and I am joined by my co-host, David Vellante. Day three with the conversation is really only getting started. Joining us now are two folks who are going to talk about what's really happening with customers in the field. Doug Schmidt, Dell CIO and president of Dell Technology Services, and Scott Bils, vice president of Professional Services. Welcome, folks.

Dave Vellante

>> Great to see you guys.

Scott Bils

>> Thank you for having us.

Doug Schmitt

>> Yeah, it's great to be back. Thanks for having us.

Gemma Allen

>> So Doug, let's start with you. I think most folks are trying to get away from one big job. You have two. I mean, it must be a busy, busy day in your life, Doug, but one thing that's clear from these few titles is you really have a unique vantage point right now, right, at what is a very interesting time in enterprise and industry. Talk to us a little bit about what you're seeing, the marriage between product, services, tech. How is it playing out in the field?

Doug Schmitt

>> Well, yeah, first, there's a lot of synergy between being CIO and then services. And that synergy really is as Dell, we're customer zero. We get to see and implement all of this great technology we've been talking about the last couple of days. And as we do that, moving very quickly, working with both our solutions and product groups, what we're able to do is learn very quickly, and our services team obviously helps us with that. So in the services role, we get to see and help with that implementation, take that learning, and help our customers get to their time to value much faster. So to me, it's very synergistic.

Gemma Allen

>> And for you, Scott, I mean, there's a lot happening here this week. We've heard some great news from Dell. A lot's changing very fast. Talk to us about what you're seeing in your organization. What are the top priorities from this week? How do they apply to real life conversations with customers?

Scott Bils

>> Yeah. I think what we're finding with our customers is that AI is changing everything as they think about their technology environment. So it's obviously about use cases. They have to think differently about data, transforming how they use data to support use cases. They need to think differently about infrastructure, about architecture, about their data centers, about their operations day too, how they opt, not just stand up AI factory, but then how do they operate and manage that over time. And then finally security as well, rethinking security in the context of AI. And that's where from a Dell standpoint, we bring obviously kind of the broad end to end portfolio from a hardware standpoint, kind of server, storage, AI, networking PC. And then on the services side, support, deploy, consult, manage. So really bring together everything across that full stack from a hardware services solution standpoint as customers rethink their environments for AI.

Dave Vellante

>> I mean, Dell is a product company. And we've always just been following the arc of Dell through the EMC acquisition and all the work that you guys have done. Services has never been more important and more strategic and obviously supporting the product, but it's more than just helping install the gear. And I would observe, and I'd love your thoughts on this, you have so much street cred because you're doing it internally, you call it customer zero and it just so happens that your leader said, "We are going hard after AI." And so you're-

Scott Bils

>> There's no doubt about that....

Dave Vellante

>> instrumental in that. So you have a lot of credibility with customers, but I would love to hear your thought on how services has become more strategic, both inside Dell but also at your customers. And you now have a more important seat at the table with the customers. I'd like your thoughts on that.

Doug Schmitt

>> Well, yeah, we've talked about this a little bit before. If you really look at this, this is obviously a huge technology transformation, great opportunity. And that is coupled with really translating into a business model change for companies as well. It's technical transformation, driving business transformation. And so when you get to that end, what services really is able to do, because we just talked a little bit about this, we're integrated with those great products and solutions, meaning the day they're being developed, we're working with Arthur and Rob, we're seeing those not only as customer zero, but how we implement those internally and learning. So by the time that we have that solution in the hands of our customers or ready for review, put in the hands of our customers, we're able to help them not only with the journey of their technology transformation, but we're able to talk about what we've learned as we've implemented internally from a business model perspective as well. And that's the case with services. We're always looking for ways and opportunities to leverage the technology, to take steps out that don't matter to our customers, leveraging the agentic flows of what we can put in and leverage so we can really spend more time in front of the customer. This is really about freeing up capacity in services because we all love being in front of the customers, helping them every day with their transformational journey.

Gemma Allen

>> I think...

Dave Vellante

>> Please go ahead.

Gemma Allen

>> I think really great services organizations like Dell, they're trusted partners, right? And Dell is a company that's been on a journey with many companies for a long time. You've ridden other waves before. This isn't your first rodeo when it comes to the evolution of tech, but it's certainly a challenging one, right? There's a lot of pressure in the market right now. Folks are feeling that stress, I think, from multiple levels of organizations. What are you seeing and hearing around those kind of stresses on the ground? Like what are the true bottlenecks do you both believe for this future of agentic?

Scott Bils

>> Yeah, I think a lot of the pressure is figuring out where it's going to deliver the most value, where it's going to deliver the outcomes that are really transformational for organizations. And a lot of the work we do upfront with customers is helping them to determine what are those use cases, what are the outcomes that they're looking to drive, and how do you need to rethink things like processes, workflow? How do you need to drive that transformation to really get at the value? I think agentic, really at the end of the day where the real value is going to lie is in kind of end-to-end process and workflow transformation, particularly for multi-agent type deployments and environments. I think it's not necessarily kind of the stresses or the pressures, but I think that's where a lot of the focus is on organization, is really thinking through how do we kind of think about things in a fundamentally new way. It's not about using agentic to automate what you have today. It's about fundamentally rethinking white sheet, new way of thinking of process workflow and how you can drive that with agentic.

Gemma Allen

>> And just so I can ask you as well, Doug, there was a time when folks would invest in an IT spend for a project or a rollout, right? There was an expectation that it would be sticky, that it would last 10 years, that you would sweat this investment over time. In this era, there's a lot of discoverability still happening, right? Folks are still trying to understand what does the future look like five years from now. How are you at Dell seeing those conversations and thinking about that, this kind of, I guess, more ambiguous era of tech in the field?

Doug Schmitt

>> Yeah. Well, I think clearly you have to have some flexibility during any of these types of technology transformation. And what I mean by that is right now if you look at it, even as customer zero in IT, we have the infrastructure where we're leveraging our great solutions from Dell. But inside of there, I think John Rose has talked a lot about this as well, I know he has, and that is we kind of think in terms of a two-year time horizon on some of those frontier models or some of the capabilities around AI. And the reason is we want to make sure that we can move very quickly as we put that into the infrastructure into the solution to change. There's just so much we want to make sure that we're on the cutting edge of that and we're able to move very quickly. So the infrastructure we can still leverage, it still has that capability, but in terms of some of the specific AI, probably about two years. And then we know we need to probably stay up on the top of that.

Dave Vellante

>> When we went from on premise perpetual license software models to SaaS, everything changed, the business model, the pricing model, the technology model certainly changed running on cloud. And the operating model to a certain extent changed, but really within IT. From your standpoint at that time, okay, ISVs were building in the cloud. You guys were trying to recreate substantially the cloud operating model on prem. Okay, great. Affected the IT department. Now everything's changing again. And we had a great discussion recently with all the analysts in the round table that you hosted, Doug. Now the operating model, Jeff Clark talked about this, is changing. Certainly the business model and the pricing model's changed. We talked about outcome based pricing and for sure the technology model with agentic is changing.

Scott Bils

>> Yes.

Dave Vellante

>> So, big, big waves. How are you seeing that those changes occur within your own organization and how is that translating to customers in the field? What are you seeing?

Doug Schmitt

>> Yeah. So I think inside that model, look, one of the things clearly, and you've heard this the last couple of days, is token economics, right, is a driver in this. And when you think of token economics, we think of clearly that's a piece of it, but it's about the return on investment you're getting for your outcomes that the tokens are driving. So you have to figure out what your cost is and then your ROI on that with that token economics. And there's really three things you could think about under there to help build for that economic or that flexibility actually back to you. Clearly the infrastructure. You could think about whether or not we heard some great on prem solutions that we now have that we talked about with Gemini and OpenAI that's coming. That's one way to think about it. Do you want a hybrid model? So what's your infrastructure? How are you thinking? We help our customers with that. The second thing is the data. It's the fuel. It's everything that's driving on there. It's DIP that differentiates what your outcomes are. And so where do you want your data to reside? Do you want it to be on prem? Close to where you need the decisions made, which is by the way, I would say the great products, the GB10 and the GB300. So where's your data going to reside? And then the third one is really around how are you thinking about the governance of your data and your agentic side of where you want. So when we go to our customers, we need to see what they're trying to achieve, what their outcome is, listen to them very closely, and then leverage agents where the data is and what their governance is and help them come up with a solution. We've done that, like I said, ourselves, so we're able to kind of walk them through and help them with that. And beyond that, which I think is where you're touching, we talk about the experiences we have. I can tell you in some of the first agentic cases we got that we were looking at in services, they were pretty close to really just an RPA. We were looking and asking people, "Okay, where do we want to use agentic?" They came back with what they were doing today and how they automate it. That's not necessarily the correct way to do it. AI gives us a new way to think about things. We could actually reinvent the way we're doing, white sheet it, get it to AI native, not just make it a super RPA. You can give experiences like that to the customers as they learn as well. And by the way, we learn as much from them as they do from us.

Dave Vellante

>> Yeah. Automating the existing processes, I call it paving the cow path, that doesn't change the operating model. You don't get a lot of operating leverage out of that.

Doug Schmitt

>> That's right.

Dave Vellante

>> Scott, I want to ask you, I didn't get a chance to ask in the round table about governance and the governance model. There's a concern about AI trust. I'm going to deploy in these agents. I see a lot of organizations trying to govern the agents. I think you have a very data-centric philosophy. What's your best practice recommendation in terms of how organizations should think about governance, compliance, where the data can reside? Maybe security comes into that. How should companies think about evolving the governance in this new world?

Scott Bils

>> Yeah, I think it's evolving the governance model on multiple dimensions or thinking about it a new way in the context of AI. I think you mentioned some of the important dimensions around this. It's a compliance, it's a data sovereignty, it's a security. It's also data providence, data lineage, who owns the data, how are you going to govern data? And at the end of the day, use cases as well. So we have a governance model within Dell around use cases and governing that also and prioritizing that. But I think it's a kind of multi-layer approach to thinking about governance and those factors within AI.

Dave Vellante

>> So what is Dell's services role? I mean, obviously this consulting, how do you partner with your partners? I mean, you're not an identity security company, but that's obviously a key piece of it. So where do you sort of connect to the partner ecosystem?

Doug Schmitt

>> Well, that's the Dell AI factory, right? It's clearly the great solutions infrastructure with services, and then obviously the partners as well. And as you can look around here and see, they are absolutely an integral piece of the AI factory in helping us deliver that. Our job as a service organization working with Dell and our customers is to get the customer the best solution, and that requires partnerships and delivering with them. And what first and always comes first is what the customer outcome is and then partnering to deliver that.

Dave Vellante

>> What's new here. I talked about sort of the cloud model and what you guys were doing, largely it was a refresh cycle driving the demand for on prem during the cloud era. Now you've got a modernization going on, a big part of which is to support AI, but you've also got this business model transformation, which is I feel like it's a new vector of growth. It's not just the normal cycle of, "Oh, refresh, we're going to get better TCO. Faster, better, cheaper." It's also supporting new business models, tokenomics." Jeff Clark talked about tokens are going to be a line item on the P&L. I mean, I don't know what percent of your revenue you spend on IT. Most organizations on average is probably four or 5%. I can see that going through the roof. So what do you think about that premise that going forward, it's not just a normal refresh cycle, there's actually a vector of grow the business and transform the business where companies are going to invest and need to invest?

Doug Schmitt

>> Well, yeah, clearly it's a huge investment cycle right now to leverage the great technology and solutions that are out there. And there is that piece of it, but maybe just we could step back just quickly. There's also, because of this technology, a great opportunity to do two things, and we're seeing this again as customer zero. One is inside our infrastructure and the way we run IT, we've been able to streamline and get rid of technical debt, things that we didn't see or know that were there before, streamline our operations for IT, which frees up resources to do those investments. So clearly there's the investment side, but the opportunity with that investment is you can get great streamlined, get rid of technical debt. That's one side of this. And the other piece of it on the token economics is, look, as we relook at the process, as I just talked about how we learned not to do advanced RPA, agentic is allowing us to rethink the processes, deliver the value the customers want, take out value or things that they don't value out of the process, deliver that in a much more automated fashion, and it allows us to free up resource to get in front of and help with the actual deployments, much more face time in front of our customers with the installations. So I think you have to be doing both at the same time.

Dave Vellante

>> You obviously have the customer zero example. Are there any other examples, either specific or generic that you can share where you've had some success? And I'm thinking leading edge kind of best practice that you might be able to share.

Doug Schmitt

>> Well, clearly I would say on the technology side we've talked about things we're leading with on the great products that we just have been announcing. One of them is the on prem version for Gemini that we're leveraging, other products that we're losing with the XE. That's a technology side, but I think you may be leaning into on the other side that we've learned. Look, it is a hands-on game in terms of management of these processes. It takes a great deal of leadership to be in front of what you need to change delivering the outcomes. One of the things I tell people is now when we're doing and working with our teams, me and myself and my entire leadership, obviously, we spend a lot of time on prompts. What are we looking for? How are we writing it? What do we really want as a business outcome so that we can actually help the teams? We aren't assigning this to somebody. We're actually helping deliver that. So there's clearly the strategic role of all the leadership, and then we're learning as quickly as well.

Scott Bils

>> Yeah. And one of the better examples I think is the work we've done with Sandisk around some fundamental transformation. So what we did there with the AI factory is help them enable what you call vision AIOps, which is a combination of computer vision, IoT, and then AI. Sorry, it was vision AIoT.

Doug Schmitt

>> Right.

Scott Bils

>> So what we did was help kind of deploy the computer vision solution, the applications on top of that, to help them manage, automate their manufacturing lines for one of their factories in Malaysia. What it all meant at the end of the day is they were able to go to 95% lights out with the facility. They ended up driving 45% reduction in overall energy costs, 45% reduction in CO2 emissions, helping them hit sustainability goals, and then 32% reduction in operating costs. And then they took defects down from 800 per million down to 100 per million.

Dave Vellante

>> Oh, wow.

Scott Bils

>> So pretty dramatic impact from kind of physical AI and kind of vision AIoT were able to .

Gemma Allen

>> So-

Dave Vellante

>> That's a great example. I also want to put just one finer point on, it's not just about the complex AI factories that you're supporting. You have a full suite of products from PC all the way up. And so you've got a client lifecycle management. You're managing fleets of these devices as well, PCs and laptops, correct?

Doug Schmitt

>> Correct. Absolutely. So the entire install base and we can help our customers with all the cart services around that, or we can help manage the entire platform for them as well.

Gemma Allen

>> So folks, it's certainly a very exciting time. And to end on the point of helping customers, I think we're also a moment for customers that perhaps never needed the help more, right? What's ahead? What does the next year look like for this combined synergy and what are the priorities? How are you focusing in? What can we expect to talk about in 2027?

Scott Bils

>> Kind of priorities for us are continuing to expand our services' portfolio across everything to help accelerate customer outcomes. I think what we're seeing is increasing challenges as customers mature as they operationalize their use cases is how are they going to kind of support it and operate it and manage that at scale. So you talked about some of the stresses earlier on what we're seeing with customers. One of is around the skills gap and skills shortages, particularly on the operation side. So as we continue and evolve the consult portfolio, we'll also be evolving our managed services as well to support AI factory and customers that are moving to scale with agentic and AI.

Doug Schmitt

>> Yeah. And that's a great summary, Scott. But I would also say, look, clearly it's the year of agent management, agents and agent management, and helping both our customers and delivering those internally as well. I'm excited about what it's going to deliver. I see what it's going to deliver in terms of services we're seeing it live. We're seeing it with our supply chain. We're also seeing it with our development. And then externally, what it's going to do for healthcare, for education/ all of these great opportunities I think that are out there in the industry. So it's going to be an exciting time for sure.

Gemma Allen

>> We're certainly excited to watch. Scott, Doug, thank you so much for coming on theCUBE.

Dave Vellante

>> Thanks guys. Good to see you again.

Scott Bils

>> Thank you.

Doug Schmitt

>> Thank you for having us.

Gemma Allen

>> I'm Gemma Allen here with Dave Vellante. It's day three at Dell Technology. We're at 2026. We're live in Las Vegas. We've got some great conversations with some great leaders coming up. Stay tuned.

Doug Schmitt & Scott Bils, Dell Technologies

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Gemma Allen

>> Welcome to day three here in Las Vegas. It's Dell Technology World 2026. I'm Gemma Allen at theCUBE and I am joined by my co-host, David Vellante. Day three with the conversation is really only getting started. Joining us now are two folks who are going to talk about what's really happening with customers in the field. Doug Schmidt, Dell CIO and president of Dell Technology Services, and Scott Bils, vice president of Professional Services. Welcome, folks.

Dave Vellante

>> Great to see you guys.

Scott Bils

>> Thank you for having us.

Doug Schmitt

>> Yeah, it's great to be back. Thanks for having us.

Gemma Allen

>> So Doug, let's start with you. I think most folks are trying to get away from one big job. You have two. I mean, it must be a busy, busy day in your life, Doug, but one thing that's clear from these few titles is you really have a unique vantage point right now, right, at what is a very interesting time in enterprise and industry. Talk to us a little bit about what you're seeing, the marriage between product, services, tech. How is it playing out in the field?

Doug Schmitt

>> Well, yeah, first, there's a lot of synergy between being CIO and then services. And that synergy really is as Dell, we're customer zero. We get to see and implement all of this great technology we've been talking about the last couple of days. And as we do that, moving very quickly, working with both our solutions and product groups, what we're able to do is learn very quickly, and our services team obviously helps us with that. So in the services role, we get to see and help with that implementation, take that learning, and help our customers get to their time to value much faster. So to me, it's very synergistic.

Gemma Allen

>> And for you, Scott, I mean, there's a lot happening here this week. We've heard some great news from Dell. A lot's changing very fast. Talk to us about what you're seeing in your organization. What are the top priorities from this week? How do they apply to real life conversations with customers?

Scott Bils

>> Yeah. I think what we're finding with our customers is that AI is changing everything as they think about their technology environment. So it's obviously about use cases. They have to think differently about data, transforming how they use data to support use cases. They need to think differently about infrastructure, about architecture, about their data centers, about their operations day too, how they opt, not just stand up AI factory, but then how do they operate and manage that over time. And then finally security as well, rethinking security in the context of AI. And that's where from a Dell standpoint, we bring obviously kind of the broad end to end portfolio from a hardware standpoint, kind of server, storage, AI, networking PC. And then on the services side, support, deploy, consult, manage. So really bring together everything across that full stack from a hardware services solution standpoint as customers rethink their environments for AI.

Dave Vellante

>> I mean, Dell is a product company. And we've always just been following the arc of Dell through the EMC acquisition and all the work that you guys have done. Services has never been more important and more strategic and obviously supporting the product, but it's more than just helping install the gear. And I would observe, and I'd love your thoughts on this, you have so much street cred because you're doing it internally, you call it customer zero and it just so happens that your leader said, "We are going hard after AI." And so you're-

Scott Bils

>> There's no doubt about that....

Dave Vellante

>> instrumental in that. So you have a lot of credibility with customers, but I would love to hear your thought on how services has become more strategic, both inside Dell but also at your customers. And you now have a more important seat at the table with the customers. I'd like your thoughts on that.

Doug Schmitt

>> Well, yeah, we've talked about this a little bit before. If you really look at this, this is obviously a huge technology transformation, great opportunity. And that is coupled with really translating into a business model change for companies as well. It's technical transformation, driving business transformation. And so when you get to that end, what services really is able to do, because we just talked a little bit about this, we're integrated with those great products and solutions, meaning the day they're being developed, we're working with Arthur and Rob, we're seeing those not only as customer zero, but how we implement those internally and learning. So by the time that we have that solution in the hands of our customers or ready for review, put in the hands of our customers, we're able to help them not only with the journey of their technology transformation, but we're able to talk about what we've learned as we've implemented internally from a business model perspective as well. And that's the case with services. We're always looking for ways and opportunities to leverage the technology, to take steps out that don't matter to our customers, leveraging the agentic flows of what we can put in and leverage so we can really spend more time in front of the customer. This is really about freeing up capacity in services because we all love being in front of the customers, helping them every day with their transformational journey.

Gemma Allen

>> I think...

Dave Vellante

>> Please go ahead.

Gemma Allen

>> I think really great services organizations like Dell, they're trusted partners, right? And Dell is a company that's been on a journey with many companies for a long time. You've ridden other waves before. This isn't your first rodeo when it comes to the evolution of tech, but it's certainly a challenging one, right? There's a lot of pressure in the market right now. Folks are feeling that stress, I think, from multiple levels of organizations. What are you seeing and hearing around those kind of stresses on the ground? Like what are the true bottlenecks do you both believe for this future of agentic?

Scott Bils

>> Yeah, I think a lot of the pressure is figuring out where it's going to deliver the most value, where it's going to deliver the outcomes that are really transformational for organizations. And a lot of the work we do upfront with customers is helping them to determine what are those use cases, what are the outcomes that they're looking to drive, and how do you need to rethink things like processes, workflow? How do you need to drive that transformation to really get at the value? I think agentic, really at the end of the day where the real value is going to lie is in kind of end-to-end process and workflow transformation, particularly for multi-agent type deployments and environments. I think it's not necessarily kind of the stresses or the pressures, but I think that's where a lot of the focus is on organization, is really thinking through how do we kind of think about things in a fundamentally new way. It's not about using agentic to automate what you have today. It's about fundamentally rethinking white sheet, new way of thinking of process workflow and how you can drive that with agentic.

Gemma Allen

>> And just so I can ask you as well, Doug, there was a time when folks would invest in an IT spend for a project or a rollout, right? There was an expectation that it would be sticky, that it would last 10 years, that you would sweat this investment over time. In this era, there's a lot of discoverability still happening, right? Folks are still trying to understand what does the future look like five years from now. How are you at Dell seeing those conversations and thinking about that, this kind of, I guess, more ambiguous era of tech in the field?

Doug Schmitt

>> Yeah. Well, I think clearly you have to have some flexibility during any of these types of technology transformation. And what I mean by that is right now if you look at it, even as customer zero in IT, we have the infrastructure where we're leveraging our great solutions from Dell. But inside of there, I think John Rose has talked a lot about this as well, I know he has, and that is we kind of think in terms of a two-year time horizon on some of those frontier models or some of the capabilities around AI. And the reason is we want to make sure that we can move very quickly as we put that into the infrastructure into the solution to change. There's just so much we want to make sure that we're on the cutting edge of that and we're able to move very quickly. So the infrastructure we can still leverage, it still has that capability, but in terms of some of the specific AI, probably about two years. And then we know we need to probably stay up on the top of that.

Dave Vellante

>> When we went from on premise perpetual license software models to SaaS, everything changed, the business model, the pricing model, the technology model certainly changed running on cloud. And the operating model to a certain extent changed, but really within IT. From your standpoint at that time, okay, ISVs were building in the cloud. You guys were trying to recreate substantially the cloud operating model on prem. Okay, great. Affected the IT department. Now everything's changing again. And we had a great discussion recently with all the analysts in the round table that you hosted, Doug. Now the operating model, Jeff Clark talked about this, is changing. Certainly the business model and the pricing model's changed. We talked about outcome based pricing and for sure the technology model with agentic is changing.

Scott Bils

>> Yes.

Dave Vellante

>> So, big, big waves. How are you seeing that those changes occur within your own organization and how is that translating to customers in the field? What are you seeing?

Doug Schmitt

>> Yeah. So I think inside that model, look, one of the things clearly, and you've heard this the last couple of days, is token economics, right, is a driver in this. And when you think of token economics, we think of clearly that's a piece of it, but it's about the return on investment you're getting for your outcomes that the tokens are driving. So you have to figure out what your cost is and then your ROI on that with that token economics. And there's really three things you could think about under there to help build for that economic or that flexibility actually back to you. Clearly the infrastructure. You could think about whether or not we heard some great on prem solutions that we now have that we talked about with Gemini and OpenAI that's coming. That's one way to think about it. Do you want a hybrid model? So what's your infrastructure? How are you thinking? We help our customers with that. The second thing is the data. It's the fuel. It's everything that's driving on there. It's DIP that differentiates what your outcomes are. And so where do you want your data to reside? Do you want it to be on prem? Close to where you need the decisions made, which is by the way, I would say the great products, the GB10 and the GB300. So where's your data going to reside? And then the third one is really around how are you thinking about the governance of your data and your agentic side of where you want. So when we go to our customers, we need to see what they're trying to achieve, what their outcome is, listen to them very closely, and then leverage agents where the data is and what their governance is and help them come up with a solution. We've done that, like I said, ourselves, so we're able to kind of walk them through and help them with that. And beyond that, which I think is where you're touching, we talk about the experiences we have. I can tell you in some of the first agentic cases we got that we were looking at in services, they were pretty close to really just an RPA. We were looking and asking people, "Okay, where do we want to use agentic?" They came back with what they were doing today and how they automate it. That's not necessarily the correct way to do it. AI gives us a new way to think about things. We could actually reinvent the way we're doing, white sheet it, get it to AI native, not just make it a super RPA. You can give experiences like that to the customers as they learn as well. And by the way, we learn as much from them as they do from us.

Dave Vellante

>> Yeah. Automating the existing processes, I call it paving the cow path, that doesn't change the operating model. You don't get a lot of operating leverage out of that.

Doug Schmitt

>> That's right.

Dave Vellante

>> Scott, I want to ask you, I didn't get a chance to ask in the round table about governance and the governance model. There's a concern about AI trust. I'm going to deploy in these agents. I see a lot of organizations trying to govern the agents. I think you have a very data-centric philosophy. What's your best practice recommendation in terms of how organizations should think about governance, compliance, where the data can reside? Maybe security comes into that. How should companies think about evolving the governance in this new world?

Scott Bils

>> Yeah, I think it's evolving the governance model on multiple dimensions or thinking about it a new way in the context of AI. I think you mentioned some of the important dimensions around this. It's a compliance, it's a data sovereignty, it's a security. It's also data providence, data lineage, who owns the data, how are you going to govern data? And at the end of the day, use cases as well. So we have a governance model within Dell around use cases and governing that also and prioritizing that. But I think it's a kind of multi-layer approach to thinking about governance and those factors within AI.

Dave Vellante

>> So what is Dell's services role? I mean, obviously this consulting, how do you partner with your partners? I mean, you're not an identity security company, but that's obviously a key piece of it. So where do you sort of connect to the partner ecosystem?

Doug Schmitt

>> Well, that's the Dell AI factory, right? It's clearly the great solutions infrastructure with services, and then obviously the partners as well. And as you can look around here and see, they are absolutely an integral piece of the AI factory in helping us deliver that. Our job as a service organization working with Dell and our customers is to get the customer the best solution, and that requires partnerships and delivering with them. And what first and always comes first is what the customer outcome is and then partnering to deliver that.

Dave Vellante

>> What's new here. I talked about sort of the cloud model and what you guys were doing, largely it was a refresh cycle driving the demand for on prem during the cloud era. Now you've got a modernization going on, a big part of which is to support AI, but you've also got this business model transformation, which is I feel like it's a new vector of growth. It's not just the normal cycle of, "Oh, refresh, we're going to get better TCO. Faster, better, cheaper." It's also supporting new business models, tokenomics." Jeff Clark talked about tokens are going to be a line item on the P&L. I mean, I don't know what percent of your revenue you spend on IT. Most organizations on average is probably four or 5%. I can see that going through the roof. So what do you think about that premise that going forward, it's not just a normal refresh cycle, there's actually a vector of grow the business and transform the business where companies are going to invest and need to invest?

Doug Schmitt

>> Well, yeah, clearly it's a huge investment cycle right now to leverage the great technology and solutions that are out there. And there is that piece of it, but maybe just we could step back just quickly. There's also, because of this technology, a great opportunity to do two things, and we're seeing this again as customer zero. One is inside our infrastructure and the way we run IT, we've been able to streamline and get rid of technical debt, things that we didn't see or know that were there before, streamline our operations for IT, which frees up resources to do those investments. So clearly there's the investment side, but the opportunity with that investment is you can get great streamlined, get rid of technical debt. That's one side of this. And the other piece of it on the token economics is, look, as we relook at the process, as I just talked about how we learned not to do advanced RPA, agentic is allowing us to rethink the processes, deliver the value the customers want, take out value or things that they don't value out of the process, deliver that in a much more automated fashion, and it allows us to free up resource to get in front of and help with the actual deployments, much more face time in front of our customers with the installations. So I think you have to be doing both at the same time.

Dave Vellante

>> You obviously have the customer zero example. Are there any other examples, either specific or generic that you can share where you've had some success? And I'm thinking leading edge kind of best practice that you might be able to share.

Doug Schmitt

>> Well, clearly I would say on the technology side we've talked about things we're leading with on the great products that we just have been announcing. One of them is the on prem version for Gemini that we're leveraging, other products that we're losing with the XE. That's a technology side, but I think you may be leaning into on the other side that we've learned. Look, it is a hands-on game in terms of management of these processes. It takes a great deal of leadership to be in front of what you need to change delivering the outcomes. One of the things I tell people is now when we're doing and working with our teams, me and myself and my entire leadership, obviously, we spend a lot of time on prompts. What are we looking for? How are we writing it? What do we really want as a business outcome so that we can actually help the teams? We aren't assigning this to somebody. We're actually helping deliver that. So there's clearly the strategic role of all the leadership, and then we're learning as quickly as well.

Scott Bils

>> Yeah. And one of the better examples I think is the work we've done with Sandisk around some fundamental transformation. So what we did there with the AI factory is help them enable what you call vision AIOps, which is a combination of computer vision, IoT, and then AI. Sorry, it was vision AIoT.

Doug Schmitt

>> Right.

Scott Bils

>> So what we did was help kind of deploy the computer vision solution, the applications on top of that, to help them manage, automate their manufacturing lines for one of their factories in Malaysia. What it all meant at the end of the day is they were able to go to 95% lights out with the facility. They ended up driving 45% reduction in overall energy costs, 45% reduction in CO2 emissions, helping them hit sustainability goals, and then 32% reduction in operating costs. And then they took defects down from 800 per million down to 100 per million.

Dave Vellante

>> Oh, wow.

Scott Bils

>> So pretty dramatic impact from kind of physical AI and kind of vision AIoT were able to .

Gemma Allen

>> So-

Dave Vellante

>> That's a great example. I also want to put just one finer point on, it's not just about the complex AI factories that you're supporting. You have a full suite of products from PC all the way up. And so you've got a client lifecycle management. You're managing fleets of these devices as well, PCs and laptops, correct?

Doug Schmitt

>> Correct. Absolutely. So the entire install base and we can help our customers with all the cart services around that, or we can help manage the entire platform for them as well.

Gemma Allen

>> So folks, it's certainly a very exciting time. And to end on the point of helping customers, I think we're also a moment for customers that perhaps never needed the help more, right? What's ahead? What does the next year look like for this combined synergy and what are the priorities? How are you focusing in? What can we expect to talk about in 2027?

Scott Bils

>> Kind of priorities for us are continuing to expand our services' portfolio across everything to help accelerate customer outcomes. I think what we're seeing is increasing challenges as customers mature as they operationalize their use cases is how are they going to kind of support it and operate it and manage that at scale. So you talked about some of the stresses earlier on what we're seeing with customers. One of is around the skills gap and skills shortages, particularly on the operation side. So as we continue and evolve the consult portfolio, we'll also be evolving our managed services as well to support AI factory and customers that are moving to scale with agentic and AI.

Doug Schmitt

>> Yeah. And that's a great summary, Scott. But I would also say, look, clearly it's the year of agent management, agents and agent management, and helping both our customers and delivering those internally as well. I'm excited about what it's going to deliver. I see what it's going to deliver in terms of services we're seeing it live. We're seeing it with our supply chain. We're also seeing it with our development. And then externally, what it's going to do for healthcare, for education/ all of these great opportunities I think that are out there in the industry. So it's going to be an exciting time for sure.

Gemma Allen

>> We're certainly excited to watch. Scott, Doug, thank you so much for coming on theCUBE.

Dave Vellante

>> Thanks guys. Good to see you again.

Scott Bils

>> Thank you.

Doug Schmitt

>> Thank you for having us.

Gemma Allen

>> I'm Gemma Allen here with Dave Vellante. It's day three at Dell Technology. We're at 2026. We're live in Las Vegas. We've got some great conversations with some great leaders coming up. Stay tuned.