NEWS ANALYSIS: Dell, following the $67 billion acquisition of EMC, may continue the user-design-it approach it once had for PCs and transfer it to data centers.
SAN FRANCISCO -- Dell is going into 2016 fortified with new SKUs (stock keeping units), services and solutions like no other calendar-year edition of the company since it opened for business in 1984. Executives at the Round Rock, Texas-based company are almost giddy at the prospects of what they'll soon be able to sell.
Dell will soon become the world's largest and most complete standalone, end-to-end IT products and services company. A few others, such as Oracle, Cisco Systems, and HP are in the ballpark, but none of those venerable companies have the overall set of offerings Dell eventually will have.
Whereas the longtime PC and server maker has in the last decade already branched out to storage, networking, cloud services and other data center components, when it closes its $67 billion acquisition of the EMC empire next year, it will be more than just King of the Round Rock in a few other markets.
Boosting its rank in most IT markets
Those would include data storage (with the combination of EMC and its own Dell Storage, which includes Compellent and EqualLogic); virtualization (VMware); security (RSA Security), and cloud infrastructure (Pivotal). Dell Software, the focus of much of the company's future, is cranking up to coordinate all this new IP that will soon flow into company data stores.
Dell is already safely established within the world's top three providers of PCs and servers. In networking, only Cisco Systems and Hewlett-Packard have hardware/software market leads on Dell/EMC.
"We're not bidding for EMC, but I shed more than a couple of tears" after hearing about Dell making the deal, Oracle co-founder and Chairman Larry Ellison said Oct. 29 during a financial analysts' meeting. "If we bought EMC, we could make a lot of money.
"I think it's brilliant. My friend Jim Davidson (of Silver Laker Partners, the equity firm that put the deal together) and my friend Michael Dell have done a spectacular job in engineering that EMC deal…They're all going to make billions of dollars. Michael's going to make billions of dollars personally. It's a fabulous, fabulous deal."
Execs must remain quiet for now
Dell execs met with a handful of tech journalists at the Palace Hotel here last week at an informal end-of-the-year meetup. Naturally, they weren't able to comment on the record about the acquisition--an extremely complicated piece of legal work, to say the least, which will take months to iron out. But it didn't take much to ascertain from their big smiles and optimistic outlooks that they all see the extensive Boston-based EMC empire moving into the Dell corral as a huge plus for their departments.
The deal—the largest ever in tech industry—was the focus of much of the discussion at Dell World 2015 last month. Michael Dell and others have said that buying EMC will help them accelerate Dell's strategy to become a complete enterprise IT solutions and services provider, bolstering its capabilities in such areas as storage, virtualization and the cloud, giving it greater scale and giving it greater traction in major enterprises.
However, some analysts have questioned whether such a massive company can be nimble enough to compete in a rapidly changing market, and integrating such large product portfolios and workforces as well as different corporate cultures will be challenging. This may or may not be true; time will have to tell. Officials with both companies expect the deal to close in the middle of 2016.
At the San Francisco meetup, Dell execs from the global solutions, research labs, server solutions, storage and next-gen infrastructure groups generally extolled the virtues of the addition of all that new IP because it gives them all a lot more latitude in putting together packages for customers.
Overlap can’t be helped
"Sure there's going to be a certain amount of overlap," one of them told eWEEK
. "You have to expect that in such a huge deal. But on balance, there really isn't all that much. Our customers just have so many more choices now than they did a few months ago."
In fact, it's almost going to be like IT managers, CTOs and CIOs will be able to order data center equipment and assemble it all the way Michael Dell used to let his PC customers design their own laptops and desktops.
Same idea, only enterprise customers will soon be picking out cloud infrastructures, NAND flash storage, high-end networking and storage instead of keyboards, monitor sizes and mice.
Each year we at eWEEK
say the next year looks like it will be a newsy one, and this holds especially true for Dell -- which, despite its relatively advanced age (31 in 2015), may parallel the "Most Interesting Man in the World" in the Dos Equis television commercial.
Dell may be on the way to becoming the "Most Interesting IT Company in the World" by this time next year.
eWEEK reporting by Senior Editor Jeff Burt is included in this story.