In this engaging discussion, Dell Technology Services' Chief Information Officer and President at Dell Technologies, Doug Schmitt, explores the evolution of artificial intelligence in enterprise data centers. Recorded at the New York Stock Exchange as part of the ongoing series with NYSE Wired, the session examines the transformation of AI from experimental stages to large-scale implementation.
Schmitt offers insights into Dell's journey in AI development. As the primary user of its own technologies, Dell has made considerable progress in utilizing AI for platform development and services. Schmitt explains how Dell's internal experiences are being applied to enhance customer services. The conversation, hosted by Dave Vellante of SiliconANGLE Media Inc., provides a comprehensive overview of Dell's AI initiatives.
Key insights focus on the essential nature of a robust data infrastructure for accelerating AI adoption, the critical role of a data strategy in conjunction with an infrastructure strategy, and the importance of managing data within a hybrid cloud environment. Schmitt underscores Dell’s strategic approach, highlighting the integration of AI into core business functions and the importance of balancing on-premises infrastructure with cloud solutions.
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play_circle_outlineImportance of being "customer zero" for leveraging AI solutions and insights.
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play_circle_outlineTransforming Data Organization and AI Implementation: Dell Technologies' Journey to Targeted, Impactful Initiatives Before Major Investments
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play_circle_outlineAI factories are being built to enhance both Dell's internal operations and customer solutions.
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play_circle_outlineMoving from traditional linear service models to circular continuous improvement in AI.
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play_circle_outlineTransforming Business: The Widespread Impact and ROI of AI Adoption Across Diverse Industries
In this theCUBE + NYSE Wired: AI Factories – Data Centers of the Future segment, Doug Schmitt, chief information officer of Dell Technologies and president of Dell Technologies Services, joins theCUBE’s Dave Vellante to unpack how enterprise AI is moving from lab work to lived reality. Schmitt explains how Dell has operated as “customer zero,” compressing more than 800 early experiments into a handful of scalable AI platforms spanning software development, sales enablement and service delivery. Along the way, he makes the case that data readiness matters but ...Read more
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What role does being "customer zero" play in the development and implementation of AI services and platforms?add
What is the validity of the AI initiatives undertaken by Dell and their implications for other customers?add
What are the key developments and support strategies in the full-scale adoption of AI across various industries?add
What should customers do to effectively prepare for success with AI?add
What is the current status and progress of the initiative being discussed?add
>> Hi, everybody. Welcome back to the New York Stock Exchange. My name is Dave Vellante and you're watching AI Factories: The Data Centers Of The Future. And we have been here with NYSE Wired and theCUBE now. This is our ongoing series. And what's happening is enterprise AI is really moving from experimental stage, really, to implementation and scale. And there are some leaders that are actually learning a lot about AI. One of them is Dell Technologies. Doug Schmitt is here. He's the CIO and president of Dell Technology Services. Doug, good to see you again.
Doug Schmitt
>> Good to see you as well.
Dave Vellante
>> Thanks for coming in. Yeah, a lot going on. You're here in New York, talking to customers. I just wrote a piece last night and I was talking to John Rose about this, about some of the learnings that Dell has internally around AI. You guys were early on, making big investments. Companies like JPMC, certainly other financial institutions. You're seeing guys like Walmart really leaning in, Eli Lilly. And of course, Dell. You are responsible both for the internal activities, the technology activities, as well as running the services business. What's that like? How's that going? What are you guys learning that you can take to your customers?
Doug Schmitt
>> Well, yeah, first of all, again, as always, thanks for having me, Dave. I think the last time we talked was Dell Technology World, and we talked about AI, but think about how much has changed since then. But the one thing that hasn't changed since just this last spring was us being customer zero. And that's what, really, what you're asking is the internal, the IT side of it, the CIO with the services. And it's really about taking our experiences on platform development with AI, how we're getting the results, the ROI for it. And then, leveraging that with and for our customers as well on the services side. And taking what we learned with our customers and bringing that back internally as well. It's a two-way street for learning, this customer zero.
Dave Vellante
>> How important is it and was it for you to get on that AI learning curve? When we talk to a lot of customers and saying, "Well, we really need to get our data in order before we spend a lot of money on AI." And what we found in talking to leaders, and I wonder if you've found this, is actually AI can help you get your data in order. If you get your data infrastructure in order, and then it allows you to actually move faster. I was talking to a customer the day who said, "A lot of our data is still messy, but AI helps us get to the data that we really need and we're moving much faster." What's your experience in that regard? And first of all, is that valid and what do you think it means for other customers?
Doug Schmitt
>> Well, yeah, I think there's a couple pieces to that question. As you look at it, first of all, Dell helping our customers, listening to our customers, Michael and Jeff were on this journey very early on in terms of the AI road and what the capabilities were. And so, if you look back a couple, three years ago, we started experimenting and working on that very, very quickly. And where we ended up with is we started off a lot of experimentation. We had way too many projects though that we were experimenting with. We had somewhere, and we've talked about this before, around over 800. And what we started to do then is say, "Hey, look, how do we get that down to a manageable few that really had scale across the company?" Think AI platforms. And when we stood back and looked at those 800, we said, "Look, there's three or four that will really have impact across the company," various groups inside of their... Every group, actually. And those were really around, think about the development programs for all of our software, our program engineers. So, we have all of the AI set up for that. Then, we had the sales side. How do we help them with that? That's our in Dell sales chat, so we have that built. And then, you have things like in the services side, which are our Next Best Action. So, these are platforms that scale across the entire company. We moved very quickly on it. Getting the data order and clean is absolutely important, there's no doubt about that, but you can't let that stand in the way. You got to jump in. Speed matters, start to work with the data, clean the data up. And we actually learned that assigning the data, so for the install base, our customer install base, services owned, making sure that's accurate. Customer data, that's obviously owned by the sales team. Making sure there was clean ownership of the data is the first place to start, leveraging that data and then moving very, very quickly on your AI platforms or your AI use cases.
Dave Vellante
>> Dell actually had maybe an unfair advantage because I know several years ago you embarked on a data mesh initiative and clean... You probably, unlike many companies, had a better data story. So what's, from your vantage point, driving acceleration today? Where are we in that?
Doug Schmitt
>> Well, I think there's a couple of things. You mentioned this at your opening. We've moved from the use case and the experiment and the testing into full scale adoption of AI across all of the industries that we're seeing. By the way, not just commercial industries, whether that be government, nonprofits, you name it's moved from now, "Hey, how are we going to test this to how are we actually leveraging results?" And so we've been helping our customers with that journey and we really do that in two different ways. One is we can help them with their AI journey from the use case, cleaning up, as you said, the data, finding the right infrastructure architecture, helping them with their large language models or their models that they may need all the way to running that. So, we can do that. We can also help them a la carte, by the way. So, it's not like you have to just choose one thing. We can help our customers scale their AI use cases across the company. And the second thing is we have our full lifecycle services that help them through their entire journey. Look, it's easy to implement the AI somewhat to get the value and the ROI. This is about services helping to provide the return on investment as quickly as possible for the outcome. And then, what we're also seeing across the board with our customers is speed. Speed matters and moving quickly for this rollout across for the value.
Dave Vellante
>> And that's what we've seen. I think about Next Best Action.
Doug Schmitt
>> Yes.
Dave Vellante
>> And I think you're now at least headed toward phase three. And I remember the first phase, it was a heavy lift, at least from my standpoint, but the outcome was pretty impressive and you could see the potential. And then, it seems like project one, okay, we got to get our muscle memory down. And then, you take the learnings from project one, phase one, bring that to phase two or project two. And like you say, once you get down that learning curve, it creates a flywheel effect.
Doug Schmitt
>> That is correct.
Dave Vellante
>> Have you seen that? And are you seeing that in your customer base in terms of where... You see the MIT study, "Oh, nobody's getting ROI." But when you actually talk to the leaders, they're getting amazing ROI. They can't go fast enough because they're getting so much value out of it. Is that what you're seeing?
Doug Schmitt
>> Well, I think absolutely. I talked about those platforms. Next Best Action, as you and I know, is about helping our customers. We started with the mission statement of how do we make it easier to help our customers resolve, solve service issues, or just information and data. So, again, the mission statement is about first and foremost, our customers and how do we make it easy for them. In that end, we took all of the structured data and unstructured data for our phase one, making sure that data and information was clean, using AI then to determine with the issue that you may be having, how we apply all of that data to resolve your issue quickly and efficiently. And we were able to then make sure that our engineers, our service engineers have that information and that data quickly pop up to help you. But more importantly, if you want to do that online, that same information is there so that you can do that real time. But we've done that in conjunction with our product groups, Arthur and Rob, so our CSG and ISG teams, and putting that further and further into the products themselves. So, look, this is about preventing the issue forever occurring. To your point about this speed up of AI, realizing the first value is obviously and still is about helping our customers, and then using that AI to push it further upstream, so we don't even have the issues.
Dave Vellante
>> I want to ask you how Dell services is evolving and in terms of how it helps customers. So, you think about the traditional PDIM model, planning, design, implementation, management. Largely linear. I would say it's very low risk if you know what you're doing and you bring a services partner in, but largely linear and incremental. It feels like we're in a new era where you're on this flywheel and the potential is enormous. We've heard Michael Dell talk about this.
Doug Schmitt
>> Yes.
Dave Vellante
>> Have you changed your thinking and your model in terms of how you're helping customers in terms of the way in which you approach it, linear versus non-linear? And I don't know if that's the right way to think about it, but I'd love your opinion on that. And what do customers have to do to prepare to succeed in AI?
Doug Schmitt
>> Well, so I think, look, in terms of that, there's obviously a lot of moving pieces and all of our customers are different and are different parts of the journey. But look, as we stand back and help our customers, it's really about understanding what their mission and what they're trying to accomplish is. And to your point, the services life cycle that we talk about, which is the traditional, let's go in and do a consulting. We look at how we are then going to architect and implement what you purchase, then deployment and then the management and the support of that technology solution. What you get to after that, to your point, is that's becoming circular. Then, there's the getting the results, helping our customer determine how to improve those results, constantly leveraging AI for that circle for improvement and improving the strategy as they go forward. I think that is what you're hitting on and that is what we're seeing. So, it's not just the initial ROI you're getting, you're getting repeat ROI and improved ROI as that continues to speed up and go along and we can help and do help our customers with that. I'll give you an example. We have a Guthrie Clinic and they help patients, obviously. What they've seen with us helping them is an 80-minute reduction in wait time for their patients. They saw a half-a-day reduction in people staying in ICU. These are real tangible results for their customers and we, as patients, right? And so they look at that, they're taking that data and they're just almost doubling down on it, and we're helping them with that as well. So, how do they constantly improve it? So, you're going to see that happen on a large scale and constantly across all these industries.
Dave Vellante
>> Yeah. I mean, if you can cut the time in half in which a patient's in an ICU, you open up greater capacity. Of course, med-tech, healthcare, AI and healthcare is amazing.
Doug Schmitt
>> That's right. Oh, I think it's .
Dave Vellante
>> So, you're going to be able to expand the capacity without necessarily adding more labor, I mean, to a point in ways-
Doug Schmitt
>> I think it's a better experience. I mean, I don't know about yourself. I want to get help, but I don't really want to be in a hospital too long.
Dave Vellante
>> We've all been sitting there going, "When do we get out of here?"
Doug Schmitt
>> Yeah. They're improving the experience for their patients and their customers, and that's what it's about.
Dave Vellante
>> What are some of the stumbling blocks that you see that customers should avoid that you're helping them avoid?
Doug Schmitt
>> Well, yeah, so there's a couple on that one as well. One is, look, you remember the old RPA days?
Dave Vellante
>> Yeah, of course.
Doug Schmitt
>> I think that sometimes the concern or the danger could be looking at your processes today and just automating those, right? That was RPA back in the day. I don't know, I lose track of time five, six years ago when we started that. What it's about now with AI is re-imagining. You don't have to just look at the processes you're doing is what are we trying to do in terms of a transformation, providing better service, better capabilities, whatever it is that you're helping deliver, and then re-imagining it with AI. And so, it's not just about automating today's processes, it's about re-imagining, modernizing where you head. And I think that's one of the pitfalls you could have if you don't stand back and look at it and have it. Now, what we tell customers is, "Look, think big. Implement in a small way, and then move fast," right? And that could be it. The other one is, "Look, this is a huge transformation in terms of what your team members are going through. There's a cultural, a process aspect to this. You have to help your team members with and through this culturally." For a lot of us, AI is going to help us do more of what we love. I love being in front of customers, helping them achieve their outcomes. AI is helping me do that, right? And we have to explain to people, "You're going to be able to do more..."
Let's just talk about what you were talking about, healthcare. You're going to be able to, if you're a nurse, be in front of your patients more. If you're doctor, helping your patients more. So, look, there's a technology piece to this, having and knowing how to leverage AI to transform. And then, the second one is this cultural piece with your team members and your constituents. How do you bring them along and make sure that you reimagine it?
Dave Vellante
>> Yeah. It's interesting you mentioned RPA. The problem I always have with RPA is exactly what you described. It's like, how do you avoid paving the cow path, I call it? And the answer was, there's actually value in doing that. And okay, and that's why it took off for a while. And then, it hit a wall and people said, "Oh, it's just not really transformational." And that's where we are today. Dell is kind of a unicorn in that you actually are building AI factories internally, and not only that, but you're supplying customers to build AI factories. Part of the initiative in the AI factories: Data Center Of The Future was we noticed that most customers have data in the cloud, but many said to us, "We're not going to put all our data in the cloud. We got certain systems and we need to develop a strategy that is hybrid," and that's what we're seeing play out. How do you see it playing out in customers? I mean, the world is hybrid, we know this. What are your top customers doing in terms of creating that balance between what they do in the cloud, managing costs, and actually building infrastructure on-prem? I know there's a lot of activity going on in what I'll call the neoclouds and managed service providers, so that's very clear. What about customers, whether it's in colos or in their own premises, what are you seeing there?
Doug Schmitt
>> Well, yeah, look, like you said, it's a hybrid world and we know it's a hybrid world. That's where it's going to be and is. But let's also go back to what you're saying, which is data is the fuel for AI and that's what we were talking about, how clean it is, how it works, but it is the fuel for AI. I also think you have to realize that it's also the IP. It's the thing that makes, in a lot of cases, industries, companies unique. And so, you want to make sure you're watching that and it's yours. How do you leverage that data for how you build a better outcome, a better mousetrap, a better strategy for what you're doing? And so as you go through and you think about it, you have to have, to your point, I think is a data strategy. Just like you have an infrastructure strategy, what's your data strategy? I think making sure that you're sophisticated or your confidential data is protected is important. I think making sure you can scale it. We talk about tokens, we talk about AI, we talk about the model, the unstructured data, but how are you going to use agentic and AI? How are you going to be charged for it? How is it going to pass through? And how do you scale that data and then deliver the outcomes?
Dave Vellante
>> And I wanted to ask you about agentic. I mean, we're well beyond RAG-based chatbots, which were kind of nice.
Doug Schmitt
>> Yeah, that's right.
Dave Vellante
>> They were not really that hard to spin up, but the impact was modest, but okay. But now, and Jensen talks about this all the time when we start to do reasoning and you have agents. So, what are you doing internally with agentic and how are you seeing customers adopt agents?
Doug Schmitt
>> Well, we're leveraging agents. As you said, we talked about the evolution of Next Best Action or in product development or in the sales side, we're using agents in all of those areas to help us deliver, again, that outcome. And it's really about then taking that process of the unstructured data, plus your process and putting it in, so that you are able to reason and get an outcome. So, we're leveraging it across all those. We're seeing our customers do the same thing. So, agentic is absolutely real and we're seeing the results from it. Look, one of the things that we're working on with our customers and internally is you have to have an orchestration layer for that and you have to have a control tower. If you think about all of the different agents coming from various aspects, whether it be from your internal-built agents, agents you had maybe purchased or whether you're in SaaS. So, we're working through that. And then, obviously, security is always a big one for agentic, but all those things are being worked and real and we're seeing great progress across the board.
Dave Vellante
>> Of course, we like to use baseball analogies and we talked about early innings. Maybe it's still early in the cycle, but the uniforms are getting dirty, all plates getting dug in. We're starting to get toward those middle innings, at least it feels that way. Do you agree with that? And Erik Brynjolfsson, the economist who's now at Stanford, was at MIT. I don't know. Maybe that's a step-up, maybe not. It depends if you're East Coast or West Coast, but he calls it a J curve. We're used to S curves. He's calling it a J curve in terms of the productivity J curve. Do you feel like we're entering the middle innings and we're going to start to see massive increases in productivity? We still got a ways to go? What's your perspective?
Doug Schmitt
>> Well, look, I don't know what inning we're in, per se, but look, we're past the beginning for sure. And it is real, it's catching fire and there are absolutely results. And what's more is we're seeing it expand. As you said at the beginning, it started with large companies, some of the large hyper companies, but now it's everywhere. It's expanded both vertically and horizontally across markets and we're seeing it across the board. And so, it is absolutely delivering the results. I've seen that internally with services and Dell Technologies, and we're seeing it with the customers we help through AI Factory, and substantial results. And so, we are well past the beginning and we're into absolutely the scaling and the execution and delivering substantial results.
Dave Vellante
>> Doug Schmitt, on the front lines, inside of Dell and with your customers, I can't thank you enough for coming into NYSE Wired.
Doug Schmitt
>> Thank You as always, Dave. Appreciate it.
Dave Vellante
>> And thank you for watching. Keep it right there. We got more action from the New York Stock Exchange. The bell's about to ring. This is Dave Vellante for John Furrier, theCUBE plus NYSE Wired. AI Factories: Data Centers Of The Future. Be right back right after this short break.
Dave Vellante