Good afternoon, and welcome to the Fiscal Year 2019 Fourth Quarter Earnings Conference Call for Dell Technologies Inc. I'd like to inform all participants this call is being recorded at the request of Dell Technologies. This broadcast is the copyrighted property of Dell Technologies Inc. Any rebroadcast of this information, in whole or part, without the prior written permission of Dell Technologies is prohibited. As a reminder, the company is also simulcasting this call at investors.delltechnologies.com. A replay of this webcast will be available at the same location for one year. Following prepared remarks, we will conduct the question-and-answer session. [Operator Instructions] I'd like to turn the call over to Karen Litzler-Hollier, Director of Investor Relations. Mrs. Litzler-Hollier, you may begin.

Thanks, Erica, and thanks everyone for joining us. With me today are our CFO, Tom Sweet; our Vice Chairman, Products and Operations, Jeff Clarke; and our Treasurer, Tyler Johnson. We posted our press release and our web deck on our website. I encourage you to review these documents for additional perspective. Our fiscal 2019 10-K will be filed on Friday March 29. Before I turn it over to Tom, I would like to highlight a few items. During this call, we will reference non-GAAP financial measures, including non-GAAP revenues, gross margins, operating expenses, operating income, net income, EBITDA, adjusted EBITDA and free cash flow metrics. A reconciliation of these measures to their most directly comparable GAAP measures can be found in our web deck and press release. Our fiscal year 2019 and Q4 non-GAAP results exclude the impact of the certain adjustments such as purchase accounting, amortization of intangibles, transaction related expenses as well as fair value equity adjustments and discrete tax items. The majority of these adjustments are noncash in nature. Please refer to the supplemental slides beginning on Slide 23 for more details. Our non-GAAP net income now excludes, among other items, fair value on mark-to-market adjustments on equity investments as well as discrete tax items. We reevaluated the presentation of non-GAAP net income and made these changes to enhance the comparability of current operating performance to past operating performance. Non-GAAP net income for prior periods has been recast to reflect this change. Given the Class V transaction, our Q4 and fiscal year 2019 non-GAAP EPS numbers are not meaningful. We have included an adjusted non-GAAP EPS which reflects non-GAAP EPS as if the Class V transaction have happened at the beginning of the year. The view is most comparable to equity analyst models for Q4. See Slide 37 in the web deck for more detail. We will provide annual non-GAAP guidance for fiscal year 2020 later on this call. A reconciliation of these measures to their most directly comparable GAAP measures can be found on Slide 33 in the web deck. Please also note that all growth percentages refer to year-over-year change, unless otherwise specified. Finally, I'd like to remind you that all statements made during this call that relate to future results and events are forward-looking statements based on current expectations. Actual results and events could differ materially from those projected due to a number of risks and uncertainties, which are discussed in our Cautionary Statement section in our web deck. We assume no obligation to update our forward-looking statements. Now I'll turn it over to Tom.

Thanks, Karen. We were in the midst of a technology led investment cycle driven by digital transformation and vast amounts of data created daily. Our focus is enabling customers to digitally transform and drive their businesses forward. We have a unique portfolio in terms of breadth and capability. And our customers increasingly see us as a key partner to meet their needs from the edge to the core to the cloud, which is showing up in our results. An example of this is VxRail combining Dell EMC compute and storage with VMware software in an industry leading HCI solution with an approximate $2 billion annual run rate as of Q4. Recently we also created a unique endpoint security solution for commercial PCs through a partnership between Dell and SecureWorks. We intend to continue driving broader collaboration across our family of businesses to create new solutions to meet our customers’ growing needs. I am pleased with our strong fiscal 2019 top line velocity in financial performance. Our FY 2019 revenue was $91.3 billion, up $11 billion, or 14%. We drove strong top-line velocity with all three of our business units delivering double-digit revenue growth for the full year. Jeff will talk about our fiscal year business unit results in greater detail. We delivered operating cash flow of $7 billion and adjusted EBITDA of $10.3 billion, or 11.3% of revenue while investing back in the business, including sales coverage to support storage and buyer base expansion. Since the close of the EMC transaction, we have paid down $14.6 billion of gross debt, which excludes DFS-related and subsidiary debt, while we did add $5 billion in debt to close the Class V transaction. I want to emphasize that we are still focused on delivering and getting back to investment grade ratings. Shifting to…

Thanks Tom. In the fourth quarter, we generated cash flow from operations of $2.4 billion. As a reminder, Q4 is a seasonally high cash flow generation quarter while Q1 is typically lower due to factors such as revenue, seasonality and timing of corporate bonus payouts. During Q4 inclusive of transaction related fees, we used approximately $500 million to help fund the Class V conversion to the new publicly traded Class C, which impacted both cash performance and ending cash balances. For the full year cash flow from operations with $7 billion and we ended the year with a cash and investments balance of approximately $10.7 billion. Our fiscal year 2019 free cash flow when adjusted for growth and financing receivables is $3.4 billion excluding VMware. We expect that to grow over the coming years as we continue to improve our overall results. As a reminder, we initially find DFS financing receivables with cash on hand, so the growth in DFS impacts our cash flow from operations. This impact is offset in cash flow from financing when we subsequently fund DFS receivables through a third-party. This metric is an indicator of our cash flow performance and along with the balance sheet cash our ability to service debt. Please see Slide 30, in our web deck for the detailed calculations. Although fiscal year 2019 cash flow performance was good. It was lower compared to the prior year, largely due to changes in working capital as well as the transaction fees previously mentioned. As discussed in our Q3 earnings call supply chain dynamics led to a temporary increase in our inventory. Over FY20 we expect to see inventory and the associated working capital impact normalize. Dell financial services continue to have record breaking growth in fiscal year 2019 and is now almost doubled…

Thanks Tyler and good evening everyone. As I reflect on FY19 we have made great progress in a number of areas. We delivered profitable share gains across the entire portfolio. We have stabilized, ISG and have strength in the collaboration amongst our family of businesses including VMware, Pivotal, Boomi, and Secureworks. We've expanded our enterprise and commercial buyer base by more than 100,000 with the investments we have made in our go-to-market engine. As a result, we saw strong FY19 growth across all three business units with ISG CSG and VMware growing 19%, 10% and 14% respectively. Starting with ISG, we are pleased with our performance, which included double digit revenue growth in all four quarters. Storage P&L revenue was up 9% for the fiscal year. We grew our storage business all four quarters. Server and networking. P&L revenue was up 28% for the fiscal year and we have delivered nine consecutive quarters of revenue growth. ISG operating income grew 35% to $4.2 billion or 11.2% of revenue primarily due to operating leverage on profitability improvements in both storage as well as server and networking. We have had strong ISG share performance throughout the year. In storage we have now gained share for three straight quarters and over 300 basis points more than anyone else in the marketplace through the first three quarters of 2018 according to IDC. During Q1 to Q3 timeframe, industry revenue grew $2.5 billion and we have captured $1.3 billion of that growth. We expect to grow share again in calendar Q4 and for the full year when IDC releases storage share results in March. We continue to see strong demand for our industry leading hyperconverged solutions and other software defined offers. Our VxRail offering grew triple digits again this quarter and we've increased our industry…

Thanks, Jeff. We are confident in our business and customer's receptivity to the Dell Technologies set of solutions remains strong. We believe the global macroeconomic environment heading into fiscal year 2020 remains positive, that we will need to navigate potential headwinds such as tariffs, IT spending in China and other macro dynamics. We are expecting commodity costs continue to be deflationary in aggregate to the first half of fiscal year 2020. IDC expects IT spending to grow more than twice GDP over the next few years and our market opportunity is promising. We will continue executing on our strategic focus areas which include growing above the market and driving share gains, generating strong cash flow and delivering the balance sheet, executing in ISG and driving profitability by balancing growth and margins; and being a trusted partner for our customers by listening and addressing their needs with our full range of capabilities. Moving to FY2020, we expect non-GAAP revenue between $93 billion in $96 billion. As a reminder, our guidance factors in an estimated $1 billion reduction due to the new lease accounting standard. We expect non-GAAP operating income between $9 billion and $9.6 billion, factoring in an estimated $250 million reduction due to the new leasing standard and continuing investments in sales and R&D. We expect our non-GAAP tax rate to be 18.5% plus or minus 100 basis points. We expect diluted non-GAAP EPS attributable to Dell Technologies common stock to be between $6.5 and $6.70, this range factors in the following the adjustment to net income for minority ownership interest in VMware, Pivotal and SecureWorks. Lower interest income and increased interest expense associated with the Class B transaction and diluted share count between 750 and 755 million shares. We have provided more detail on our guidance including the non-controlling interest adjustment on Slide 17 of the web deck. I'm optimistic as we head into fiscal 2020 there is more work to do, but we have many things going right from an execution perspective, client and server velocity, VMware performance in revenue synergies. We have made progress in storage this year and deepened the solution development and cross-sell collaboration across our family of businesses. We are well-positioned with one of the strongest portfolios in the industry and we believe there is no better partner than Dell Technologies to help our customers realize their digital future. We continue to run our business in a disciplined way, focused on long-term relative growth, share gain and cash flow. With that, I'll turn it back to Karen to begin Q&A.

Thanks Tom. Let’s get to Q&A. [Operator Instructions] Erica, can you please introduce the first participant?

We’ll take our first question from Katy Huberty with Morgan Stanley.

Thank you, good afternoon. How much of the growth in operating margin expansion in the fourth quarter ties to lower memory cost versus mix and other factors in the business?

Hey, Katy, it’s Tom. Let me start and then, Jeff, you can jump in. Look, I think if you look at – sort of look at our business as we were generally pleased with the progress we made in CSG in terms of operating profit expansion. That was a combination of mix if you think about commercial versus – consumer versus commercial mix, I should say. Also you should think about the fact that commodity cost did go in our favor this quarter. And so that was clearly helpful. And then within the ISG business, clearly Q4 is a strong storage quarter in general, for us, it traditionally has been. It was again this quarter. And obviously we saw server growth continue to be, I think, in an appropriate range for us. So look, if you step back and think about the components of the P&L, yes, I think are generally pleased with the expansion and margin Q-on-Q at an aggregate level from 30.9% in Q3 to 33.5% in Q4. And it's a combination of all of those factors that I just mentioned. Plus I think the pricing environment was relatively benign. Jeff, I don't know if you'd add anything on the component cost framework itself or any other…

No, I think you hit it, Tom. Katy, we are in a deflationary environment. You know our model with low inventories gives exposure to the lower cost components that are reasonably quick rate. That's certainly a benefactor for us. Pricing is relatively benign as Tom mentioned. And I'll just also focus on Q4 storage growing at 7% and our ISG operating income up on a year-over-year basis in Q4 by a little over 20%. That's where the leverage of the P&L came from. That's why it's key for us to continue to grow our storage business.

That’s a great color. Thank you.

You’re welcome.

Thanks Katy.

Our next question is from Toni Sacconaghi with Bernstein.

Yes, thank you. I'm wondering if you can comment at all about how we should think about Q1. I know you're only providing guidance for the full year. But this is really your first go-forward quarter as a public company, I think historically, you're probably down about 6% to 7% sequentially on the top line. And I'm wondering if that's sort of the right normalized base. And whether you can talk about the puts and takes on a sequential basis, particularly things like currency whether you see any change in the demand environment particularly China and whether you see any potential change in competition and pricing over the next 90 days? Thank you.

Okay, Toni. It’s Tom. Let me try and sort of frame how we're thinking about it as we stepped to it. And clearly, all of you I think are familiar with our seasonal pattern, right. And Q1 is traditionally our, if you will, our softest quarter of the year if you look at sequentials, Q4 to Q1, the historical pattern at an aggregate level of roughly a minus 8% revenue and op income that sort of minus 35% and minus 40% sort of range. But I think you need to deconstruct that and think about the fact that from a storage perspective. Storage is traditionally – Q1 is traditionally the weakest storage quarter where sequentially, I think revenue is down something like 20% and operating income on the storage side of the business and think about the legacy EMC business is a good example, a good guide on that being down roughly 50. So look, I mean, sequentially Q1 is our softest quarter. And I expect it to be again this year as we think about the dynamics of the various piece parts of the P&L. The VMware traditionally is roughly down historically like 12% on the revenue sequentially. And roughly 25% from an op inc perspective. I think the other dynamic I want you guys to think about and look, we're not going to give one-specific guidance. But I do think it's important for you to think about it as we've talked a lot about the investments in, that related into the P&L they improve some long-term positioning particularly around sales capacity, sales coverage models and ensuring that we get to the right North Star ratio. And we've talked on past calls about the fact that we've got continual investments coming in through – roughly through the first half…

Thank you. That’s helpful.

Our next question is from Jeff Harlib with Barclays.

Good afternoon. In ISG, can you just talk about how you see the revenue outlook into this coming year, obviously servers was a huge performer on the revenue side this past year, and the storage was solid. I mean, do you see a convergence there? And what are some of the factors as you look at the demand environment and your position in both sub-segments?

Well, maybe I'll start with and Jeff should jump in as the owner of the ISG P&L. And Jeff, it’s Tom obviously. So look I think as we’re thinking about next year, I think let me ground you on what IDC is calling in terms of a market framework, which is server – mainstream Servers, which is the segment as a server market that we're most focused on given that’s where the profitability is, it's roughly – IDC right now is forecasted on a calendar basis, its roughly about 3.4% Servers revenue growth for the year. And they have essentially storage minus one call it flat. Dell had a stronger calendar 2018 from a market perspective. Having said that, so I think if you look at the macro dynamics that we see across the globe, look, I mean, I'm not expecting fiscal 2020 to be as strong as fiscal 2019 from a revenue growth nor have we guided you that way. But I do think it's positive, right? I mean, CPU is still growing. The mark – IT spending is – according to IDC is still roughly 2x GDP. And as you think about some of our major markets around the globe with the U.S. is roughly a 2.5% GDP call for the coming year. China, which is down from 6.6% to 6.2%. So I think the macro environment still healthy for us right now. We're going to have to go execute through some of the navigate probably through some choppy waters at times, but that's the job we have to do. So I think we feel good overall. And then Jeff, maybe you could chat about just the overall specifics of the investments we've made in with storage and servers and how we're thinking about some of the qualitative…

Sure, I'm happy to. I mean, clearly you talked about the market indices and the forecast. In absolute terms, mainstream storage mark added $2 billion of incremental revenue. We have taken share, we're going to continue to consolidate share. We think when you look at this big $85-ish billion opportunity, two-thirds of it being in mainstream servers, our share position a little less than $30 million, there's a fair amount of room for us to consolidate, particularly when you look at high value workloads or blade or modular where we have generally a much lower market share in those ASP rich areas. So we think there's room to grow there. I think that is continued to be – at least, in my mind, continue to be bolstered by the fact that we still see on-prem private cloud early build out. We talked I think on the previous call or throughout our series of roadshows, repatriation of workloads coming back to on-prem, we continue to see that. There's been some recent research by IDC that suggest there will be $120 billion spent on hardware for on-prem private clouds over the next four years and another $100 billion on software and services on top of that. We think that bodes well for the environment on a go-forward basis, as it's clear, we're in a multi-hybrid cloud world. On the storage side, first, I'm really pleased that we have four quarters of growth in business in a row of share gain 300 basis points year to-date, as I mentioned in the prepared comments. I expect the fourth quarter in a row, and again, I've talked about a turnaround. We have plenty of work to do, but clearly we've stabilized the business. The investments that we've made in sales, capacity and coverage are yielding net new buyers, which is good to see. We continue to tune the sales compensation focus on storage, which is very important to us. The portfolio as we enter FY 2020 is in much better shape than it was a year ago. It's highly competitive where we literally have a leadership position in the high-end. And while you've heard me talk about the need to simplify and consolidate the mid range, the products that we have in the mid range today are more competitive than they were a year ago. And clearly unstructured space is a high growth area and we continue to see good performance out of our unstructured storage area. [Indiscernible] way for me to say, I – we expect a built-type plan to take share in both the mainstream server and the storage of marketplaces that we serve today. Does that help?

Terrific. Thanks very much.

You’re welcome.

Our next question is from Rod Hall with Goldman Sachs.

Yes, hi. Thanks for taking my question. I guess I wanted to start off, and I ask Tyler on the interest rate environment. And I know you had commented, Tyler, and thanks for that on your plans to push debt maturities out. I just wonder how you're feeling about that environment. As you look at it right now, do you feel like there's an opportunity to reduce debt interest costs as you refinance? And then the second thing I wanted to do is just clarify the storage share commentary. I know that in storage, you're partly benefiting from people replacing footprint as your product portfolio, has got a little bit better and that mathematically causes share to look better. And then of course, I'm sure you're taking some share from your competitors as well. But I wonder if you could give us some kind of ideas, whether, you know, how much of your share gains are due to – just accelerated replacement activity at your existing accounts and how many are due to share that you're taking from competitors? Thanks.

Hey, Rod. So, I’ll go first. This is Tyler. Yes, look, I think the good news is that interest rates are somewhat stable, right? I mean, we've seen the tenure come down. I think it had traded as high as like a three, two or so. It's down back for free. So, look, I think in the end it obviously depends on what the maturity profile that we pick. But I think we'll be in good shape to push some of these maturities out and probably without having a material impact on our interest expense or the weighted average interest rate.

Hey, Rod. We're just taking one question at this time, but we can follow-up with you as an IR team.

Sure. Thanks.

Our next question is from Wamsi Mohan with Bank of America Merrill Lynch.

Yes, thank you. Tom solved the guidance overall for fiscal 2020. I was wondering if you're seeing any sense of caution from any of your customers across the geos at all. And some of your competitors have noted a stronger second half in infrastructure spending. I'm wondering if you think that there is a case to be made about bio-seasonal second half versus first half or just your view on second half versus first half for Dell. Thank you.

Well, let me start with the guidance and then a couple of just broad comments and then I'll flip it to Jeff maybe to talk a little bit about infrastructure as we think about the year. But, look, I think from our perspective in terms of any caution or slowdown from the customer set, I would tell you today we really haven't seen anything in terms of customers beginning to delay significant activity or to push out investments that they were planning on making. I think what we're – which I think is in part because of the – if you think about the IT spend and the IT capability being sort of central to a business model these days, that many customers are viewing it as essential. I also think that – so that's one thing. So the answer is no. Also remember our direct model, right, and that typically when we see cycles turn, particularly on a downturn, you see it first in the medium and small business. And with our direct model and our interactions with those small businesses and medium businesses, we haven't really seen that. So today, really no evidence of customer behavior changing at this point in time. And so, look, we're optimistic about fiscal year 2020. I think we're realistic that we'll have to navigate and run the business and execute well. But I think the environment is generally still positive for us. And Jeff, I don’t know how, if you could say anything about the infrastructure side as you think about the back…

No, I think you hit all the high points, Tom. What I would add to it is, the discussions are having with customers about digital transformation continue, digital transformation is real, it's on the agenda of most of the companies from large to medium and down even to small business. And that digital transformation is driving the need to modernize and to drive towards this multi-cloud, hybrid world that I mentioned earlier. So the environment continues to be somewhat optimistic there as the digital transformation continues to be and we're in the early innings today.

Is it second half versus first half?

Look, we're not going to parse the year. I would just point out one thing to you which is, as you think about the investment cycle we've been on in terms of sales capacity, I think as we get to the back half of the year, we do expect to see some – the beginning of the realization of the benefit of some of those – of some of that back capacity adds. As I talked to you before about the productivity ramp occurs that there are – but I think we're optimistic about the year.

Our next question is from David Eller with Wells Fargo.

Hi, good evening and thanks for taking the questions. You've got your guidance is, it looks like it's calling for a little bit of margin expansion throughout the year. And so I wondered if you could walk us through some of the puts and takes on, where you expect to see that, maybe on the gross margin and operating expense line and then as we look at the quarterly progression of the year. I know Tony kind of asked us a little bit earlier, but if you could just – as Q1, would you view that as probably your toughest compare of the year or would you view that a different way?

Look let me give you a couple of thoughts. One is I don't parse margin and OpEx in terms of the guidance we gave you. I do think that, we expect operating profit to expand as we, you know, in FY 2020, which is consistent with how we want to run the business. And if you think about the themes that we're driving around continuous storage and server profitability expansion, that I think that should help you in the context of thinking about – thinking about, how we think about profitability expansion over time as well as the contribution of VMware. Then as it relates to…

Just any quarters you call out as your tough compare.

Yes. would call it, I think it was probably the toughest compare, you know, as we think about the year-over-year, that's where we saw the acceleration last year in particular in some of the storage business. So I think that's the one that has been the – probably the toughest ones as we saw it, start of the year, coupled with the OpEx investment that we've made, which we think begin to scale begin to scale on the back half of the year better than in the first half of the year. And that's how I came to think about it.

Great. Thank you for taking the question.

Thank you.

Our next question is from Steve Milunovich with Wolfe Research. Okay, sorry. Our next question is from Jim Suva with Citi Investment Research.

Thanks very much. Looking up the slide number 12, the client solutions group segment. You know, it's quite admirable that you're year-over-year revenues grew 4%, but the question is on operating income down 1%. I see the little note there on the Slide that you talk about, offset by investment in sales coverage. Can you help us understand, are these offset in sales coverage, something that you're going to have ramping up even more as a year progressing? Are we at a run rate now that you're happy. And what do you mean by sales coverage, beause my understanding is, you know Dell does a lot of direct but you've also been using the channel a little bit more in your clients solutions group. Thank you

Jim I'll start. This is Jeff. I'm sure Tom will add in as well, but if you think about our previous references to sales capacity and coverage. We've talked about in the broad sense across the entire business focusing a lot specifically on the storage side, but also just general sales makers to reach more customers direct and to expand our channel reaches well. So the reference is really around, we've invested on a year-over-year basis. And as Tom said in the second half of the year, we expect that sales productivity to begin to drive incremental revenue and operating margin.

I think the other thing Jeff and Jim, you should think about it. I think in my prepared remarks, I commented on that Q4 results, some incremental costs associated with incentive compensation frames, KLs and frameworks because of the strong performance of the business with some of that is just flowing through these business unit coming in as well. So that's the other thing to think about, but I think Jeff hit had hit a well which is a context of grow capacity. We, we go both direct and through the channel roughly 50% of our businesses direct, making sure that we have the right coverage model to expand customer – the net new customers as well as cross sell into other existing laws is key to our long-term success and long-term framework. So that's how we think about the coverage models.

Thanks so much for the detailed, that's quite useful. Thank you.

Our next question is from Paul Coster with JPMorgan.

Yes, thanks for taking my question. The guidance is quite encouraging and it's easy to align on model with it until we get to the EPS line. And I'm just wondering, is there something in other income or can you give us a little bit more specificity around net interest expense for the year so that I can figure out what the delta is here.

Look it's Tom. So Paul, I would think about it like this which is look, I mean obviously we, you know, as you said, as you work your way through the P&L and get the low operating income, there are a number of variables that are hitting. And you start with the fact that remember that we did the Class V transaction in Q4, which two elements to that obviously, right? There was an $11 billion cash dividend out from VMware that came so, interest income is going to be lower for the year and next year. And we – as you know, as part of Class V transaction, we’ve put $5 billion in debt on the balance sheet and so there's an interest carry on there. And then you get into the tax rate, which I tried to give you some frameworks to think about, not sure what you were using in your model for tax rate. And then the non-controlling interest which can be a bit of a complicated calculation, so we tried to lay that out for everybody in terms of baseline set of assumptions on Slide 17 in the web deck. And then – so I'd ask you to take a look at that and see how that aligns to how you were thinking and if you’re more happy to talk, our IR team will call if you'd like to have a more detailed conversation on that. But that's essentially the walk as we think about it.

All right, got it. Thank you.

Our next question is from Shannon Cross with Cross Research.

Thank you very much. Just wanted to check, in February you typically make changes to your sales comp plan. I think this year you were focusing on margin in VMware. But if you could talk a bit about, what you're sort of pushing with your salespeople in terms of comp for 2020 and then also just in terms of cross sale opportunities with VMware, that would be helpful. Thank you.

Sure. Shannon, this is – excuse me Jeff and I'll take a stab and then Tom certainly will pile on as well. As I think I mentioned a little bit earlier, we are taking another tweak if you will of the sales compensation plan. I think we've communicated in the past, there's basically three buckets if you will. There's the CSG side and then within the ISG side, there is storage and the non-storage components and obviously there's VMware and VMware side within my business, we continue to bias the compensation plan on the ISG side towards storage. We continue to make tweaks towards that. We're very pleased with the progress we've made this past year and we'll continue to try to optimize that. So it's the continuation of what we've been talking about for the better part of the last year and a half. We’re pretty excited about what that means on a go-forward basis and I'm not sure I can add much more to that.

No, Jeff. Hey Shannon, it's Tom. Look, the only thing I would add is, look what we've tried not to do with the sales comp plan this year is make broad changes because all that doesn't tend to cause the sales organization to spend a fair amount of time trying to figure out the new comp plan. So what Jeff said, I think it is a nice sort of elaboration of what we're doing, which is small adjustments to make sure that we get the right focus, the right attention and we're focused on those valuable solution selling and lot that make sense to us and that we want to push. And you got to think about that both with our direct selling organization as well as with our channel, right. So we're making refinements to our channel program to incent them to ensure that they're driving the higher value offerings like storage and attaching services where appropriate. So again, it's a continued refinement, Shannon, as we continue to tune the model and I think we'll continue to make progress.

Yes, it prompted a thought Tom, you said solutions and clearly the plan that we built this year drives toward building on the collaboration that we've dealt with VMware. So if you think about Workspace ONE and Dell, we certainly put incentives in our sales force to work on that solution across the different SAP’s. If I think about VxRail, vSAN, software-defined data center, VCF, we clearly put, if you will from sales compensation incentive behind that. I’ve mentioned cloud in my comments as well. As we think about cloud and I think I introduced this concept last time around Pivotal, Boomi, VMware, this operational control plane on top of our leading Dell EMC infrastructure products, you can imagine that we packaged some sales compensation of selling that level of integration across our Dell Technology properties as well. We'll talk more about that at Dell Technology World and I guess it's about eight, nine weeks away. But Tom prompted that, I wanted to make sure I communicated, that solution selling across the SAP and allying higher levels of integration and collaboration is clearly where we put more focus this year than last year.

Thanks, Shannon. Erica, let's take one last question.

We’ll now take our final question from Simon Leopold with Raymond James.

Great. Appreciate that. Wanted to maybe get a little bit of a philosophical perspective, what you see as your options and priorities in terms of generating cash beyond operation. And what I'm really getting at is I understand you've pushed out maturity on the debt, but I want to get a better sense of what's available to you beyond the operating model, whether it's the best thing, certain assets or things like that. Just help us just understand what your options are. Thank you.

Hey, yes, this is Tyler. I mean, look, I think look I'm focused on the business driving profitable growth and growing the topline which is what's going to throw off, the most consistent cash, right? So, nothing really to talk about in terms of something unique like a divestiture or something like that. The reality is we ended the year with strong cash balances, very well positioned to pay down approximate $4.8 billion which I talked about and if you flash forward to the end of the year, what you're going to see is that we will have lower debt balances and our maturity profile is going to look smoother. So a little bit of work to do, but I felt really good where we are.

Thanks very much.

Thanks Simon.

Well, that wraps up our call for today. A replay of this webcast will be available on investors.delltechnologies.com. As a reminder, we will be hosting our Annual Dell Technologies World Event April 29 through May 2, in Las Vegas. And we are planning to hold an IR track with this event this year. We'll be providing more detailed information about this event next week. Thanks everybody for joining us today.

This concludes today's conference call. We appreciate your participation. You may disconnect at this time.