Dell M&A Strategy Globally

Dell M&A Strategy Globally Dell Case Studies Sponsor: Silvia Jelenikova In cooperation with:

About the Presenters Michal Kulich Jana Kapralikova Education: Masters in IT, Masaryk University, CZ, 2004 Work experience Dell: Project Manager / Consultant 4 years - Strategic Projects - Sales Reporting - Process mapping Work experience prior to Dell: ERP Senior Consultant/Project Manager - 6 years University Lector 1,5 Year Education: Masters in Finance, EUBA, 1993 ACCA, CIA certified Work experience Dell: EMEA Business Control Manager for Account Payable, Payroll, Travel & Entertainment 2 years EMEA Technical Accounting Sr. Advisor 2 years Work experience prior to Dell: External Audit Manager in PwC 7 years Internal Audit Manager in NCR 5 years 2

What will you learn: What is M and what is A? Why are we doing M&A? How are we doing M&A? 3

Agenda 1 M&A Overview 2 Dell M&A Strategy 3 Dell acquisitions people perspective 4 Dell acquisitions history 2009-present 5 Key takeaways 4

General overview Mergers & Acquisitions ACQUISITION - when one company takes over another and established itself as the new owner. From a legal point of view, the target company ceases to exist MERGER - when two firms, often of about the same size, agree to go forward as a single new company M&A types: Horizontal: Two firms are merged across similar products or services. Horizontal mergers are often used as a way for a company to increase its market share by merging with a competing company Vertical: Two firms are merged along the value-chain, such as a manufacturer merging with a supplier. Vertical mergers are often used as a way to gain a competitive advantage within the marketplace Conglomerate: Two firms from different industries. Usually used as a way to smooth out wide fluctuations in earnings and provide more consistency in long-term growth. Typically, companies in mature industries with poor prospects for growth will seek to diversify their businesses. 5

General overview - Synergies Synergy value can take one of the following forms: Higher Revenues (gain market share) Acquiring new technology (gain access to new markets) Acquiring Intellectual Capital Reducing Expenses When M&A could fail?: 1. Overestimated purchasing price 2. Overly Optimistic synergies 3. Underestimated integration costs 4. Poor strategic fit 5. Cultural and Social Differences 6. Incomplete and Inadequate Due Diligence 7. Poorly Managed Integration 6

M&A lifecycle The process of combining two or more organizations into a single organization involves several organizational systems, such as people, resources and tasks. The process of combining these systems is known as 'integration'. 7

Agenda 1 M&A Overview 2 Dell M&A Strategy 3 Dell acquisitions people perspective 4 Dell acquisitions history 2009-present 5 Key takeaways 8

Retention and Development Acquisition CUSTOMERS Corporate Merger & Acquisition Strategy Strategic Strategic (Control Points) Synergistic adjacencies Large Platform Transforms products AND customers Limited synergies with core business Augments large platforms OR creates critical mass with other strategic acquisitions Large Platform Our core business Synergistic adjacencies Transforms products AND customers Limited synergies with core business Critical mass for future transformation Synergistic Adjacencies Current PRODUCTS New Extends core products OR customers Lots of synergies with core business 9

Who should we acquire? 10

What is a good fit for Dell? Industry-leading companies that help fulfill the vision of the efficient enterprise The competition Closed & proprietary No choice Vertically integrated Price premium Compromised Open & industry standard Choice Dell Virtually integrated Capable & affordable Uncompromised Open always wins Innovative + Open + Capable + Affordable 11

Target prioritization All Companies in Priority Solution Areas Exclusion criteria Relevance Competitors Hardware-centric Synergy Legacy technology Lower-priority solution areas Execution Estimated acquisition price is outside range IP not available (e.g., subsidiary of conglomerate or parent company) Lack of Dell cultural fit Attractive Targets 12

Agenda 1 M&A Overview 2 Dell M&A Strategy 3 Dell acquisitions people perspective 4 Dell acquisitions history 2009-present 5 Key takeaways 13

Technology has always been about enabling human potential. 8000+ People acquired during 2011-2014 - Michael Dell 40.000 People acquired in 2009 14

DELL Worldwide US 44k EMEA 16k APJ 40k 100k people worldwide 15

Number of Employees (In thousands) 16

Agenda 1 M&A Overview 2 Dell M&A Strategy 3 Dell acquisitions people perspective 4 Dell acquisitions history 2009-present 5 Key takeaways 17

Announced 11 acquisitions by the end of 2011, balanced across our growth domains Company acquired Date closed Enterprise HW Services Software Nov 2009 Feb 2010 Feb 2010 Jul 2010 Jul 2010 Nov 2010 Dec 2010 Feb 2011 Feb 2011 June 2011 -CAN Oct 2012 -EMEA August 2011 Clustered NAS storage Storage compression and de-duplication Automated data lifecycle management Network operating system Full scope of service offerings SaaS application integration Cloud-based medical records management Managed security services Financing solutions Systems management appliance Managing virtual infrastructure 18

We announced these transactions in 2012-2014 Company acquired Date closed Enterprise Services Software Feb 2012 Backup May 2012 End Point Security May 2012 Thin Client & supporting Data center Infrastructure May 2012 May 2012 Re-Host: Re-platform, Upgrade, Consolidate (application and/or data) Re-Engineer: Extend and enhance, Package replacement, Re-engineer Sep 2012 System Management Nov 2012 Converged Infrastructure Dec 2012 May 2013 Encryption & security management Cloud Management 19 March 2014 Information Management Solutions

Dell + Compellent Efficient Data Center Open Capable Affordable Dell s point of view Control operating costs Data management intelligence must be built in Assess data growth with flat budgets How Compellent addresses these needs Adds most advanced automated tiered storage in the industry Easy management: Single admin. can manage more storage Enhanced performance and outstanding capacity management Smarter storage: Matches performance to right data type Faster and more accurate DR: 6 click restore More efficient use of power, cooling & floorspace Dynamically migrates data at the block level to optimal storage tier based on frequency of access True virtualization of Fiber Channel storage Scalability: from 6 disk drives to 1,008 disk drives in a single footprint Technology independence & simple upgrades Provides FC capabilities alongside EqualLogic and other iscsi offerings 20

Dell + DFS DFS timeline: 1997 2007 2011 2012 DFS founded as a joint venture with CIT Wholly owned subsidiary of Dell Operations in US Mission Acquired CIT in Canada Operations in Canada In process of acquiring assets of CIT in Europe Operation in EMEA through bank in Ireland EU -> WHY IRELAND? Ability to passport into EEA member States Offer full suite of financial products, Ability to diversify the funding base over time Access to a deep local talent pool Tax considerations Positive experience of environment in Ireland Products Establishing direct financing capability for purchasers of DELL products and services Operating lease Finance lease Term loans 21

Do you remember.....at least one Dell acquisition for every area? 1 Storage Software Services...can you order regions by number of employees? 2 EMEA APJ AMER 22

Agenda 1 M&A Overview 2 Dell M&A Strategy 3 Dell acquisitions people perspective 4 Dell acquisitions history 2009-present 5 Key takeaways 23

Key Takeaways M&A is formal process to DELL transformation into end-to-end solutions provider Target companies are carefully selected to fit into our strategy, culture and to deliver expected synergies M&A is cross-functional highly disciplined effort between Corporate Development, Integration Management Office, Business owner and functional work-streams Integration MUST preserve value drivers of the acquisition 24