Dell Technologies Finally Closes Massive Deal for EMC

By Jeffrey Burt  |  Posted 2016-09-07 Print this article Print
Dell EMC

The new Dell will include the PC business—which will retain the Dell name—Dell EMC Infrastructure Group and Dell EMC Services. In addition, there will be other businesses—Boomi and SecureWorks from Dell and Pivotal, RSA and VMware from EMC. The company's headquarters will remain in Round Rock, Texas, but the IT infrastructure business will be based in EMC's hometown of Hopkinton, Mass.

Throughout the past 11 months, competitors like IBM and HPE have courted Dell and EMC customers, noting the potential disruption that will be caused by the integration of the two large companies and offering a safe haven for organizations that are worried about the deal.

Lenovo officials in a statement said the Dell and EMC deal "creates significant business opportunities for Lenovo" because data center customers "will face tough choices, not only about how to transform their data centers to capture the benefits of cloud computing and next-generation IT, but also about how to transition their current infrastructure with the integration of two complex product portfolios. We believe these customers will be open to new options."

Charles King, principal analyst with Pund-IT, wrote in a research note that Dell is well-equipped to manage the integration challenges, and noted that the company has done well by ensuring that EMC executives—such as Howard Elias, Rohit Ghai, Jeremy Burton and Bill Scannel—are part of the new company. King compared it to HP's $25 billion acquisition of Compaq more than a decade ago, when "following the deal's closure scores of Compaq executives and managers were let go or forced out, and its product lines (outside of PCs) were decimated. By 2005, when CEO Carly Fiorina was finally ousted by HP's board, Compaq had been largely subsumed and forgotten."

He also said there is less product overlap between Dell and EMC than there was with HP and Compaq.

King also pushed back at competitors' claims that customers and partners will be hurt by the complex integration of the two large companies, calling it "shallowly predictable fear, uncertainty and doubt (FUD) mischief that competitors attempt to stir up amidst customers unnerved by changing circumstances."

He took particularly aim at HPE CEO Meg Whitman, calling her criticism of the deal "especially ironic" given her continued downsizing of "what was once one of the IT industry's most stellar systems firms by stripping or spinning out various products, services and business units. HPE's attempt at FUD is doubly ironic since Whitman's broader strategy appears aimed at winnowing her company down to a size that would be attractive to private investors."

Customers should be less concerned about Dell's ability to integrate EMC into the business and ask themselves "whether they will be better served by a vendor that is working to strengthen and extend its innovative portfolios of solutions and services or by those that are selling off themselves a piece at a time," King wrote.


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