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Brian: Good morning on Tuesday, April10th, 2012 from San Francisco. You’re listening to Brian and Gabe live. This is Brian Madden, thank you for joining. Gabe, I hear you’re there in Omaha, how are you today?
Gabe: Not bad, not bad at all.
Brian: Sitting here –
Gabe: We have a lot of people here today.
Brian: We do. So in the rainy city of San Francisco with me is Jack. Good morning. We also have a few folks joining up remotely via Skype. So first is Jeff McNaught from Wyse, and Jeff, thank you for taking the time to call in today.
Jeff: Hey, my pleasure, sorry we couldn’t be with you last week.
Brian: Yeah, it was a very last minute thing but thank you for your – are you in San Jose right now?
Jeff: I am, I’m at world headquarters.
Brian: World headquarters for the time being.
Gabe: It sounds so important.
Brian: Wait, whose world headquarters?
Jeff: Wyse’s headquarters. We’re still an independent company.
Brian: All right, and we’ll get to that in a second, I just want to mention we also have on the line Eric Westover from DinamiQs, did I say that right?
Brian: In Netherlands. And so we’ve got a lot of things to talk about today. So we’ll talk about On Live, Microsoft new licensing stuff, MDM, At Vie, Jack’s new consumerization show, I’ll maybe share thoughts about my Blackberry Playbook, I’ve been using it now. But first, I want to make use of your time, Jeff McKnott, and just talk about the news that happened last week which was that Dell was going to be buying Wyse. So first of all, that’s still happening, right?
Jeff: Yeah, last I checked. It seems to be, yeah, the talk of the town.
Brian: And so how do you Guys feel around there, I wrote that it was a brilliant idea a long time – brilliant’s not the right word. I thought it was sort of a good move long time coming. Is that the sense that sort of the folks at Wyse feel right now?
Jeff: Yeah, we’re really excited about it. I mean when you look at the way our world worked is that industry analysts would routinely tell us that when we made it to the short list we won three out of four times verse the competitors we face today. And the one time we couldn’t get into the short list was because we didn’t have an end to end solution, right, and that’s all solved now.
Brian: And end solution being?
Jeff: Servers, storage, software, optimization and clients.
Brian: And then so I guess this deal, it’s a definitive deal but does a regulatory approval have to happen or just customer closing things, when does this actually become a deal that was announced until this is a done deal?
Jeff: Yeah, it’s subject to the customer closing requirements and so we expect it’s going to close sometime in mid May.
Brian: Oh, so that’s pretty soon.
Jeff: Yeah, yeah.
Brian: And so a lot of people have, I’m sure there’s not sort of too much stuff you’re able to talk about now because you’re not closed yet and it’s a public computer, Dell is a public company anyway, so let’s ask you the fun questions like, all those big no PC cars that are driving around, do you think you’ll peel the color forms off those cars and now –
Gabe: It’ll say Dell PCs.
Jeff: Yeah, I was telling my Dell brethren who, by the way, are amazing people. Everybody that I’ve worked with from Dell so far in the last crazy couple of months have been spectacular. But they did have one request and that’s take those damn no PC logos off everything. And so it took me two years to put no PC all over everything we do and about 24 hours to take it off.
Brian: Oh, is that off now?
Jeff: Yeah, I mean our monuments are clear, our cars are clear, everything is clear. And we have a new logo that we will be introducing maybe as early as Synergy that we’re working with Dell folks on so we’re really excited about that.
Brian: Is the Wyse brand going to continue to exist?
Jeff: You know, I think both Dell and Wyse realize that the Wyse brand brings a unique value to the equation so there is no – I haven’t seen anybody say it needs to be immediately X’d out and replaced so I’m hoping that we’ll be able to take all those really positive things that we’ve done as Wyse and attribute them to now the joint solution that we’ll deliver. And it’s going to be great for customers and they’re going to be continuing to look for us so we’re going to find ways to make us easier to find.
Brian: And that’s cool too, and hopefully you don’t fall into the Dell naming schemes and like the Wyse, whatever pocket cloud becomes, pocket cloud 145C3-US only whatever.
Jeff: Well Dell has a history though, they bought Case and they still call it Case and so Wyse probably has a good chance or being around as a name for awhile. There are super smart people, they didn’t buy us just to lay us all off and grab our patents because there’s so much more to the brand and the company and what we’ve done. And new things like YZMM and Stratus, these new cloud based technologies that we’re developing, these are super valuable things that people don’t even know all the things that they’re going to be able to do for our customers, but Dell gets it. So I think you’re going to see the Wyse brand in some shape or form hanging around for as long as it makes sense to.
Brian: And that’s the thing, because I know Dell – I know obviously all hardware companies are not trying to be more towards software and services the whole package and that kind of thing but I know Wyse has been working, I assume Wyse’s plan was to – you’re planning out your future as if you would be an independent company and I think Wyse also in the past few years has started with more software side of things. I know that you had software for accessing sessions for IOS, you have software to convert PCs into thin clients, you bought MD company, and there’s maybe more stuff in there. I don’t know that there’s – there’s a lot of stuff in Wyse stack, right?
Jeff: Yeah, if you look at our employee count, we’ve got about 500 employees now which is up pretty substantially from what it was just a few years ago. And about 250 of those people are sales people, 150 are engineers and 95% of those are software engineers so when you look across our platform now we’ve got a full stack of virtualization software, management software, well we call it cloud software which includes things like thin OS and zero and the technologies inside Zenith and all that. As well a growing security portfolio so we’re dramatically building out the products lines like Wyse VDA, Wyse TCX, virtual desktop accelerator, Wyse device manager and we’re cloud buying nearly everything and so Stratus and Wyse ZMM are just the first sort of peaks under the tent of new software that you’re going to see of us.
Brian: And I guess Dell has a lot of other products that might sort of compliment that too, so they can pull those together. Because Wyse had a lot of sort of point solutions that you mentioned TCX and VDA and those kinds of things. So if Dell can actually pull that together with sort of the exiting stuff I think they’ll announce more acquisitions since even last week, that could actually be something like pretty legit.
Jeff: Well I think so, and if you look at Wyse, our strategy, because think of who we go up against, right, we’re the David in the David and Goliath analogy. And how do you get a company out the size of HP? And if you look at the IDC numbers that exactly what we did. Worldwide we’ve now beat them, and it had to be by delivering tangible differentiation. It wasn’t good enough to take standard reference design hardware and put standard design hardware on it. We had to go the extra mile and develop things like the OS and these ultra secure technology and our Zenith product which we’re so, so proud of with our Citrix and our P20 for BM Wear. The thing is that the Dell folks get this and they are very excited about working with us to take this tangible differentiation strategy and driving it all the way back through the networking technology, the server technology and the source technology so that customers are going to get this benefit from Dell that’s going to be not only the sum of all parts but it’s going to be greater than all the parts.
And there’s going to be things that we’re going to build into thin client that we’re going to take advantage of what we get from Dell so that this end to end solution that Dell’s going to provide is not just end to end like everybody else, it’s going to be truly best of breed end to end and that’s what exciting me because you know I’m a geek. It’s got to geek out and it’s got to be better than anybody else for me to get excited about.
Brian: What is Michael Dell now buys Teradici we talked last week about Cisco buying Teradici to make up for potentially losing partnership with Wyse for Cisco listing clients but if Dell buys Teradici, put some hardware chips into these decides and also to the back end stories and everything, so all that stuff, now you’ve got something.
Jeff: I think that’s interesting. I don’t have any information that I wouldn’t share here but here’s what I do know, we’re doing something really interesting with Teradici that we’re going to uncover the covers on that, I think, it’s going to change the dynamic of that space. So stay tuned on that one and as soon as –
Brian: Is that like Synergy thing?
Jeff: It’s not a Synergy thing.
Gabe: It’s a thing.
Jeff: But it’s a VMworld thing.
Brian: That dumb VMworld. I mean, I love VMworld but how about making a biform thing.
Jeff: You know, if it was done in time Brian, I’d be right there waving the flag.
Brian: Well said. So one of the things last week, and I know you serve a product and market sort of guys but what is – I mean Wyse sold through the channel rights and Dell, I’m not on the channel side, does Dell – like their whole thing was their direct, right, does Dell sell through the channel or will Wyse continue to work with the channel, like how does that happen?
Jeff: That’s one of the areas I learned a whole lot here in the last couple of months is that it blew me away to find out that Dell has 100,000 channel partners, happy, happy channel partners selling the Dell product and us little Wyse, we’ve got 3,000 rabid dog in the channel doing out thing. So we’re going to combine the channel, all the Wyse channel partners are going to be given the opportunity to join the Dell program but Dell is actually a great channel company and I didn’t know it and a lot of people have asked me that question but I’ve been surprised and I think the channel, the feedback we got from the channel is, they’re delighted because now they’ve got more to sell.
Brian: And most people probably go that route for the same reason that, most people buy their own Dell computers direct and HP operates the same way but when it comes down to buying stuff for enterprises you’re still calling up the partners to, or your channel reps and getting your product that way, so that makes sense.
Jeff: You have to do it that way because there’s just so much complexity to come of these solutions. If you’re a small business you cannot expect the one or two people you may have an IT to be able to do it, so a channel partner’s critical to that.
Brian: We used to have, when I had a real job, we used to have direct Dell contacts that we would call for stuff and I would assume that larger clients, larger Wyse clients, have the same thing, right, where they can just go direct to Wyse?
Jeff: The software and peripheral operating through Dell, Dell is, if you didn’t notice, Dell is one of our largest reseller partners for the past three or four years. They sold more Wyse branded thin clients than any other of our partners and so this is sort of a natural combination as well but prior to that, Wyse was a big Dell shop, right, we bought all our servers and storage and products directly from Dell as a medium business and it worked great for us.
Brian: Now, Jeff, you mentioned that Dell has 100,000 happy, happy partners. And then you also mentioned that all the employees at Dell you met were super awesome, so all 100,000 Dell employees are also super awesome which statistically speaking is very amazing, so congratulations to Dell for having 100,000 awesome employees. So there’s a lot of really good things going on, you’ve obviously very excited. But what do you Guys have to look out for? Some mergers are huge successes and some big mergers are giant catastrophes so how, what do you Guys need to look out for to not fuck this up?
Jeff: Well I think that first off, we’re in the planning stages right now so I’m working for closely with my very awesome sell counterparts in communications, in global, online and in marketing, those are the three areas that I run, and we’re building out the plans right now for what happens on day one which is the day you give the day the closing occurs as well as what we do for the next 30, 60, 90 days after that. So that’s what we’re doing today is we’re really planning for the future and we’re building it together. The nice thing is this isn’t that kind of acquisition where one steel company busy another steel company and tries to figure out who they can lay off to maximize profits. Dell gets the fact that what we offer in the market is going to be reposting them immediately to the leader in desktop virtualization and they want to make the most of that.
The Dell folks have already said they’re going to pour additional resources into us at Wyse including my department in terms of head count and dollars and all those things that we need to do to double and double our revenue and that’s exactly where we’re going. So there are certainly some pitfalls, right, we’ve got to make sure we keep our key partners, Citrix, VM Wear and Microsoft Virtualization very happy, we want to make sure our customers like Cisco are really happy and we’re going to preserve all of that to the best of our ability.
Brian: I think we’re having some Skype issues. Let me ask you the final thing, you talk about employees and it’s not like they bought you to lay people off. Tarken, I – that dude, so Tarken is Dell’s CEO for those who see him speak, he’s a nut in an awesome way. He is, if I were CEO of a company, he is exactly who I would want to be. So I don’t know what his deal is in time frames and all that kind of stuff but from my standpoint the longer you hang onto that Guise the better. So put my vote in for him sticking around. ‘Cause if we could be at Dell and do what he does for Dell, for Wyse, that would be fun to watch, I’ll just leave it at that.
Jeff: Yeah, on clarification you said he was Dell’s CEO.
Brian: Oh, sorry.
Jeff: I think he might be a little disappointed with that. He’s Wyse’s CEO and he never reports to, or will report to Jeff Clark, right, the president of end user computing and I’ll continue to report to Tarken, so this thing is organized for success, trust me.
Brian: Awesome. So, hey, I know that we’ve already taken as much of your time as we told you we would. I don’t know if you have any other final thoughts but otherWyse we’ll let you go and get to it, and is Wyse going to be at the Microsoft Management summit next week, I don’t know if that’s something that in your wheelhouse?
Jeff: I think, yeah, we are. I personally will not be there, but we Wyse will be there. And I’ve got to tell you, Synergy is going to be a huge freakin’ blow out, it’s our last major show as an independent company. I’ve got some product introductions that are going to change everything, and I couldn’t be more excited.
Brian: All right, and so what I’m reading between the lines is you’re going to give hints of those products’ awesomeness at BriForum in London two weeks before Synergy, right?
Gabe: It’s the other way around, they’re going to hint at it at Synergy two weeks before BriForum in London.
Brian: Yeah, and then –
Brian: Oh, that’s right, it’s Synergy’s first, whoops. Yeah, hey, well Jeff McNaught, thank you so much for taking the time to join us today as I said, I’ll say again, congrats on this acquisition, I think this is a good move for both companies and I wish you the best of luck.
Jeff: Hey, thanks Brian, thanks Gabe, you Guys have been amazing t your support for Wyse and we think you guys are top notch so we’ll be continuing to work together, we’ll just have a slightly different colored logo over our heads, so –
Gabe: All right. Do not let them change your official cupcakes provider.
Brian: Okay, circle jerking complete, moving on.