What Key Industry People Are Saying About Dell-EMC Merger
Here is what a selection of respected industry people told eWEEK about their takes on the deal. --Steve Herrod, General Partner of venture capital firm General Catalyst and former CTO of VMware: "(The deal brings) fairly complimentary product offerings with some interesting synergies: Nicera with Dell Networking products; EMC Storage+Equalogic and Compellent; VCE with Dell's network and storage offerings; RSA with SecureWorks," Herrod said. "On industry changes: Biggest enterprise companies are going for a Goldilocks approach to finding the right mix of heft and autonomy. We're seeing this with HP and Symantec splitting up and with Dell bringing in more units, many of which will be fairly autonomous. This is similar to Google's move to create the Alphabet holding company. Lots of pieces, many of which may be sold or go public on their own – VMware, but also Pivotal, SecureWorks, and RSA.--Rob Enderle, Principal at The Enderle Group: "If this goes through, HP is totally hosed and so screwed. Dell would appear as a far more complete vendor than HP and, with HP's crippling layoffs, its customers will quickly be looking for enterprise-class alternatives. With EMC, Dell could aggressively go after that business, hitting HP before the firm can stabilize and protect its client base. "EMC has a number of critical needs that Dell addresses, and Dell has a number of strategic goals that EMC can massively accelerate. However, if the deal goes through, the real loser in all of this is likely HP because just as customers are looking for alternatives, Dell should naturally emerge as the ideal alternative for them," Enderle said. --Andres Rodriguez, CEO of cloud storage provider Nasuni: "There are clearly a lot of synergies with this deal, but both EMC and Dell are, at heart, traditional IT infrastructure companies. It won't help EMC with its greatest long-term weakness: the lack of a strong cloud storage product. With file data growth at about 40 percent annually, enterprise IT can't just keep buying and installing more boxes," Rodriguez said. "There's also going to be a lot of concern over how this deal affects the channel. EMC depends on partners to sell its mid-range gear. Will those partners be so eager to sell EMC knowing now that they would be bringing Dell into their accounts? Many of the largest VARs and resellers see Dell as their biggest competitor, after all. "Nevertheless, this deal will make Dell-EMC the unquestioned leader for data center infrastructure, as it has been traditionally architected. However, the enterprise data center is changing fast, and this combination does not at all address both companies' weakness vis-à-vis the cloud. Addressing their cloud strategy has to be their No. 1 concern once the merger is complete," Rodriguez said. --Craig Stice, Computer and Server Electronics Analyst for IHS, Inc.: "IHS believes that together as one entity, Dell with EMC will have one of the most complete and unified portfolios, which should provide them additional reach into larger business opportunities they may have not had access to as individual companies. Allowing them to better compete against the likes of IBM, HP, and Cisco in the growing trend of unified IT solutions. "On paper, IHS sees the deal appears to be the best path for both companies. Financial success, of course, is still a question mark." --Jacob Cherian, VP of Product Management and Product Strategy at Reduxio Systems, spent 14 years at Dell: "This merger ... is not going to be easy. Dell has failed to invest to build a strong offering for the flash space and build solutions for the burgeoning unstructured storage space. A merger with EMC is going to give them products in this space, but at the same time there is significant overlap in the product lines (and) Compellent, EqualLogic, Nutanix, FluidFS all could see the end of the road. This is not going to be good for either company, customers. “It is going to be clash of cultures; Dell has excelled at simplicity of the product line, with very little in R&D and marketing leveraging from partners. EMC brings a very complex product line with multiple overlapping products and strong marketing and R&D. Customers will pay for the ensuing confusion as product lines and cultures clash," Cherian said. --Charles King, Principal at Pund-IT: "For Dell, the purchase constitutes both a milestone in the company’s remarkable journey since founder Michael Dell returned as CEO in 2007, and an ignition point for its next phase. For EMC, the deal stands as the best chance to preserve and grow the unique organization that has evolved under the leadership of CEO Joe Tucci, and will also allow the company to leave behind the second guessing and obsession with quarterly earnings that is increasingly common in the financial industry and among institutional shareholders," King said. "The $67B size of the Dell/EMC deal mirrors some of the complexities the two companies face, but the fact that they have worked together closely in the past and share many mutual partners should help to mitigate some challenges."
"Prognosis: Massive integrations take a lot of work and can be very distracting. You should assume HP and IBM go to town on the customer base hoping to exploit this. As we juggle all of these offerings, the real threat is from Amazon, and I've not yet seen big enough thinking and moves from this converged vendor to make a dent in their offerings," Herrod said.