Dell and EMC Merger: Why, and What It Means

 

Dell’s $67 billion acquisition of EMC is the biggest technology deal ever. This will prove to be an added advantage to Dell sales force, known for their ability to “sell ice to Eskimos”. EMC can see this as an opportunity to tap mid-market customers. As a private entity, the combined result will face a freedom from market pressures that their competitors can only dream of.

The way I see this deal is, that Dell wanted a sharper set of enterprise capabilities which EMC brought to the table. Dell also gets control of VMware which is a big asset in enterprise datacenters. If all goes well and they manage it properly, Dell will become a far more credible player alongside Cisco, and HP in the enterprise space. If you look at this acquisition from another angle this looks to be a consolidation play which also makes total sense considering the overall market inactivity within the classic client-server datacenter environments.

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As far as technological disruption is concerned, this acquisition may not sound as disruptive to the tech market as, say, Oracle’s purchase of Sun Microsystems, or Hewlett-Packard’s acquisition of Digital Equipment Corp., was. Dell customers are already buying EMC products. While the two firms overlap in some storage product lines, Dell is already a major reseller of EMC products.

This deal has made Dell as one of the world’s largest IT vendors, just behind IBM and Microsoft, but Dell still have little to offer in the fastest growing area of cloud services. However IBM, Oracle, and HP, either have or are geared up in building next-gen cloud solutions with varying degrees of success. I am not sure if Dell has considered that while buying EMC.

All in all, this merger has created new headwinds for startups and companies building incremental improvements on Storage Arrays or Hyper Converged Infrastructure players, as the combined Dell/EMC will have a stronger set of products for present generation needs. If Dell/EMC can execute well it would also create new headwinds for direct competitors like HP and Cisco.

On the other hand, this merger has created new tailwinds for companies building next-generation technologies. This has triggered an alarm bell for enterprises to re-evaluate their current IT strategies and think if it is time to start making more substantial changes. The eventual product line consolidations has also put forward the sense to move to a next generation architecture vs switching to another current generation platform.

Egon Durban, a managing partner at Silver Lake, has been quoted as saying that he believes that this merger will make the ultimate platform company. And as long as the investors seem happy, this deal has every chance of going through. I wish best of luck to both the organizations for a successful and prosperous journey ahead

To know more email: marketing@calsoftinc.com

Anupam Bhide | Calsoft Inc.

About Calsoft

Calsoft is a leading software product engineering services company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. www.calsoftinc.com

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Anupam Bhide

Anupam Bhide

Dr. Anupam Bhide founded Calsoft Inc. in 1998 with a vision to provide the best and innovative solutions to product engineering companies. With more than 22 years of experience in IT Industry, he is widely respected for integrity, innovation and dynamism.
Anupam Bhide

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