What Does the Dell Purchase of EMC Mean For Your Business?

dell-emc-partners-merger.jpgAnnounced last October, Dell’s purchase of EMC is set to not only be the biggest technology acquisition of 2016, but also of all time. The deal is rumored to be worth an astonishing $67 billion, which is even more remarkable when you consider Dell is only valued at around $25 billion.

If the deal goes through as expected, Dell-EMC will be one of the biggest tech companies in the world, and one of the last end to end companies (desktop-to-data center).

Since there is a lot of media fanfare over this deal and even more FUD being tossed around, I want to take this opportunity to share my thoughts on how this deal will impact our clients and you.

Chaos Theory, or “The World Will End When Dell Buys EMC!”

Contrary to popular belief, the world will not end when Dell buys EMC.

Personally, I’m predicting a small tremor, but still nothing colossal. How can I believe that the integration of these companies will be easy? The easy answer is I don’t. I also know that Dell and EMC have sold together before, and that Dell continues to be a reseller of EMC technologies.

If you don’t believe me, look how fast Dell was able to start selling the VMAX product line (starting Feb.1). Dell has a huge OEM list that is leveraged every day, and it provides a conduit for them to resell third-party products as part of their core solutions. Adding EMC as a partner in this way will provide the product availability without having to solve the integration overnight. This gives them time to get it right. This has been the “modus operandi” for previous acquisitions by Dell – albeit not as large.

The (More Likely) Unification Theory

If Dell follows their normal post-acquisition process, not much is going to happen during the first year. I expect to see some staff realignments, expense cutting moves and joint marketing, but overall I think a lot of time will be spend analyzing the products, their markets and the customers.

You can expect initial changes following the deal will be primarily cosmetic, as many of the existing systems switch over to Dell-EMC – or whichever brand identity the new company decides to use. There may also be minor amendments made to licensing agreements, but the new company will avoid any major disruptions.

Over the next few years, we should see products merge, greater emphasis on software-defined and converged systems, as well as things that, quite frankly, we aren’t even contemplating at this point. The truth is that the IT industry is facing at least three major revolutions (simultaneously), and this much money isn’t spent on what you can do today – but what you can create for tomorrow.

For current customers of one of these companies, you will have more options and opportunities to innovate. Dell adds servers, networking, storage and software into the EMC portfolio, and EMC adds software and storage options into the Dell portfolio.

For customers that use both vendors, over time you can expect a single team working to innovate your organization with an impressive array of solutions at their disposal.

The Dell-EMC Deal Is Great for Innovation

Vinod Khosla, a venture capitalist and co-founder of Sun Microsystems, disagrees with the popular notion that this deal is good for innovation. Instead, Khosla believes that huge firms can’t possibly compete with small, agile startups. There is, however, strong reason to doubt this.

Technology is starting to look like every other industry, dominated by a few big players with plenty of resources to invest in research and development. Dell-EMC puts both organizations in a position where they can pool their resources and continue drive change in fields such as enterprise storage. We should expect to see more, not less, innovation when this acquisition completes.

The Future of VMware Is Uncertain

VMware is a subsidiary of EMC but is traded separately, and the plan was to continue in this way. However, already some details of that agreement have changed, mainly due to issues with cloud software vendor Virtustream. The exact relationship between Dell-EMC and VMware remains to be seen, and may yet prove to be one of the pivotal elements of this acquisition.

Final Thought

There are few people in the world who could have conceived of this scale of merger, much less execute it. The technology world is shifting, and those companies who can be less tied to the quarterly reporting of a public company and more focused on innovation will be more likely to weather the storm. Michael Dell has demonstrated the skills, the people and the resources needed to integrate these two market-leaders into a single titan.

Michael Tanenhaus

Michael Tanenhaus

As CEO of Mavenspire, Michael provides the vision for the company, translating its 5- and 10- year goals into short-term action plans and shepherding those plans along the way to success.

Prior to founding Mavenspire, Michael worked as a technical consultant for the entirety of his career, developing hands-on experience working for companies and clients within a wide variety of industries and sectors. From the start, Michael’s goal had been to use technology to innovate the processes of all organizations he worked with.

Michael, entrepreneurial by nature (He started his first company at the age of 13!), strives constantly for perfection and client success. He and Mavenspire add great value to their clients and partners by seeking long-term relationships rather than transactions, striving to see them successful in both the short- and long-term.

When not at Mavenspire, Michael might be found playing video games with his son, or working out in a HIIT weight workout.

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