Why the timing is right for Dell to do some serious research, Silicon Valley-style (interview)

Jai Menon was a key researcher and executive at IBM for almost 30 years before he jumped ship in mid-2012 to Dell, where he is now the vice president and head of Dell Research. Now he runs Silicon Valley research for the enterprise-focused Dell, which can afford to invest in original research now that it is a private company and doesn’t have to worry as much about Wall Street’s hunger for cost-cutting.

The question is whether Menon can create a culture of creativity at Dell, which in the past has been a slouch compared to the original research efforts of its rivals such as IBM, Intel, Microsoft, and Hewlett-Packard. Menon says Dell is very focused on the future. We caught up with him for an interview, and here is our edited transcript.

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VentureBeat: You switched over from IBM Research to this new job. Why did you decide to make the move?

Jai Menon: Part of what we’re doing in Dell Research, what makes it different—I had a good time at IBM, of course. But the opportunity to come to Dell was very compelling to me. Dell is very focused on the future. It does not have a path and a legacy—because of the past successes of IBM, I think, you had to deal with that legacy. You had to deal with things like mainframes and other systems. I felt that there was an opportunity here to simply focus on what’s right for the customer, to focus on doing the right thing and not worry so much about legacy businesses and past successes.

Dell was also very interested in pushing into new innovations, which was one of the reasons I was able to come here and begin this new research operation. It was an opportunity for me to become the founding head of this organization. That was another great challenge, being able to do that. It’s not about sustaining an existing research division. It’s about trying to create something new.

The number of kinds of customers that Dell deals with, it’s enormous. Small and medium business customers are the heart of where Dell pushes its portfolio. It can scale up and scale down and scale gracefully, but the heart of Dell’s customers—it was an opportunity to work with a different kind of customer base.

VB: Years ago, both the compliment and criticism leveled at Dell was that it was a PC distributor — a distributor of technologies developed by Microsoft and Intel. It had no R&D. That was many years ago, but I wonder if you could address Dell coming at the idea of innovation from that past history.

Menon: When I first joined Dell, the thing that struck me was that that image of Dell wasn’t accurate at all. Digging underneath the covers, what I found was that in area after area, Dell has been a real innovator in looking at where customers are, where they want to go, and driving leadership with vision over the last three or four years.

I can give a few examples. If you look at where storage was going, Dell saw the need to drive into spaces like iSCSI storage, which drove it to a leadership position in that phase of storage. It was predicting a bit about where the puck was going and making a move there. If you look at Dell’s data center solutions business, it’s likewise making a decision about where the puck is going as far as the needs of big service providers, and then capturing a 50 percent share of that market. The same is true in the networking business. The topologies that Dell networking does, some of the other networking vendors are just coming to that now. Or if you look at virtualized systems, Dell has been a leader in the use of servers and storage in virtualized systems.

In short, I can point out a number of places where Dell has figured out where to go and moved ahead of the game to get there early. That’s a bit of the past. That’s before I came, but those were all compelling examples to me. They said that this image of Dell is not very accurate.

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VB: So now, what is the priority?

Menon: Going forward, we’re trying to take it to the next level. One area we’ll be innovating is even longer range. Think about three or four years, the long term and beyond. Number two is pan-Dell. Current innovation happens within business units at Dell — within the systems group, within software, within services. With research as a central arm for Dell, we can bring that all together. What does security mean in a services context, a server context, a storage context, a software context? We can think about it in a pan-Dell sense.

The third way in which we want to be differentiated is to look for disruptors and drive innovation from a disruptive perspective. It’s not just straight lines to the next PC or the next tablet. What are some of the disruptors that are going to drive our research and innovation agenda? Focusing on technology trends and driving our innovation around those disruptive trends.

So my answer to your question, really, is that there has been innovation already, and we’re now adding to that by delivering longer-range disruptive innovation across all of Dell. We’re forecasting technology trends and having a Dell point of view on those trends. Then we’re driving innovation around them.

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VB: How large a research group is this? What are the roots of it?

Menon: This started about six months ago. Michael [Dell] introduced us at Dell World. We’re hiring new people. Several new people joined in December, even, as we’re standing up the new research organization. We’re identifying problems. We’re hiring people to go after those problems. As we show value, we’ll continue to grow. It’s not as if there’s a fixed limit to our headcount.

In addition, the way we’re structured is that we’re going to very significantly leverage university talent in doing our research. We’ll be complemented by that, and also complemented in that we’re creating some pan-Dell structures by which innovative people all across Dell are becoming a part of some of our projects. It’s hard to count a bit. People in other parts of Dell are contributing some of their time to what we’re doing. A lot of very talented people at Dell are excited by the fact that we’re starting this new research arm and excited to work with us.

VB: I can see different reasons for the timing here. I would think that going private helps with spending more on something like research than the company has done historically. It also seems like we’re at a transition point in the market as we go from PCs to smartphones and tablets, where the dominant Windows architecture is no longer necessarily going to drive a technology monoculture. You need to experiment with different platforms, more with things like what Dell’s Alienware is doing with Steam Machines. It also seems like there’s more plain uncertainty as far as what technology is going to be the next big thing.

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Menon: You hit the nail on the head. The timing is right for all kinds of reasons. Going private says, “Hey, we can start to focus on the long term now.” It enables us to focus on the future. But the other points you make are good ones.

That’s why we’re looking at disruptive trends and creating what we call the Dell technology outlook. This is not, as it might have been in the past, a Microsoft or an Intel outlook, or even a university outlook or some other smart people’s outlook. It’s a Dell outlook, led by Dell Research. It’s our view of trends, and there are many that we’re very interested in getting Dell ahead of the curve on.

Some of these trends are from a consumer perspective. Some are from an enterprise perspective. But these are things that will change the way our customers will work and play. There’s a lot of fascinating directions and research to be done around taking BYOD, for example, to the next level. If I draw two axes and think about security as one axis and productivity as the other–A lot of the focus of BYOD has been about security. As we get that under control, the next step for what we’ll need to do is deliver ease of use and productivity along with security. We don’t want to hinder your ability to do things.

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VB: What are the trends you’re focused on?

Menon: As you move around a campus with your smartphone or your tablet or your laptop, you want to be able to seamlessly move from Sprint to AT&T to somebody else depending on signal strength. You want to automatically switch to wi-fi as it’s available, whether you’re in a university campus or a hospital or wherever. A lot of things will make this seamless as we go forward.

The whole notion of managing data, being able to get at your data whether it’s from your Microsoft phone or your Apple tablet or your Android phone, all of which I happen to have—That’s not very seamless today. We need to move toward data management. It’s about getting at your data, not so much about managing your device.

A number of things in that space are exciting. As you move to the cloud and put more things in the cloud, the issues around security—some really interesting technologies will move security. If I want to use a cloud service provider today to do my taxes for me, there are things like PLF, like perfect forward secrecy, that have multiple keys to protect your data. One of those keys is constantly changing, so even if someone gets the keys, they’re only valid for a short period of time.

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But we still have issues around the service provider. Let’s say I’m doing my taxes. The person doing those taxes still gets to see private information about me — my salary, what I have to send to the IRS. There is technology that will make it possible for me to send encrypted data to the tax provider. I’ll have the provider do all their computation on encrypted data. They’ll send me back encrypted data, and never see anything about me directly. Encryption technologies like homomorphic encryption are areas we want to study, because we think they’ll be very important to our customers going forward.

VB: Security is big?

Menon: We have a lot of interesting research in the security area around context-aware security, the notion that—today it’s a sort of yes/no. Depending on your role in administration, either you can get into a system or you can’t. Tomorrow it’s going to have to be based on not just your role, but also where you’re accessing from, what device you’re using, what operating system is running on that device, the threat level on a given day, and the business context. Did I just sign an agreement between companies A and B? Is that why a bunch of data is moving through me? This sort of context-aware adaptive security is another area we’re interested in pursuing.

We all know that flash memory has made a lot of penetration, both with consumers and in the enterprise. Increasingly, we’re seeing diskless laptops, diskless tablets. Even in the enterprise area, we’re seeing flash change the way that we can support our customers. Next-generation stuff in coming in the next few years that will allow flash—it’s flash-like, but I think of it as next-generation flash. It’s 50 to 100 times faster than today’s flash, almost as fast as memory, and maybe a fifth of the price.

All of a sudden, you can do things with that technology in terms of realtime data analytics. If you’re buying a prescription, the pharmacist has a very short time to find all the contraindications and interactions in the drugs they’re handing to you. Some of this technology is going to enable all kinds of quick analytics that weren’t possible before. How can we take advantage of these new technologies as they become available for Dell? These are the kinds of things that the research group is excited about.

VB: Historically, R&D is often associated with platform owners. In Dell’s case, it hasn’t been a platform owner. Does Dell do a different kind of R&D because of that? Does it chew off less than what some of the larger tech companies are doing for very broad-based R&D?

Menon: Particularly with the new Dell software group, Dell does own platforms. We own platforms in systems management, and as we get into the data analytics space. We have firewall products and that kind of thing. Enterprise-wide, I would say that we do own platforms in that sense.

From a consumer point of view, there’s increasing ability to do interesting research, largely driven by the move from desktop apps to software as a service. If I think about anything that runs on a PC today, for every example of a desktop app, I can give you a corresponding software as a service app. Office is going to Office 365 or Google apps. Email is going to Gmail. Accounting is going to Quickbooks Online. Databases are going to Google apps. Photo editing is going to PICnet or PicMonkey. Adobe has Creative Cloud. Some of the value is shifting as far as the kinds of things that you’re able to do.

To the earlier point about managing data for the consumer on the PC or the laptop and integrating that with managing data on the server, there are real opportunities. But I would also say that our close relationships with Intel and other partners are obviously very helpful to us. We’re not going to be able to do the deep research in terms of the next generation of chips. By selecting partners in these areas and expanding road maps regarding where these technologies are going – what’s happening with CPUs, with memory – we can use that to leverage our research and drive solutions that can take advantage of those new technologies.

VB: How are you going to spread out your research? You have a lot of operations in Texas, but also a presence out here in California as well. Where will you do your work?

Menon: For the organic part of our research, we’re splitting it between Austin and the bay area. We have a huge presence in Austin, and then a pretty big presence in the bay when you think about all the companies we’ve acquired over the last few years, between Force 10 and Wyse and Ocarina and SonicWALL and so on. That bay area vitality is important to us.

From a university perspective, we have a list of schools we’re working with in all kinds of geographies. We’re also spreading out to particular parts of where Dell has presence — China, India, and other locations where we have R&D teams already. We are expanding to people in those locations that have an interest in working with Dell Research.