It’s been a few weeks now since Mr Dell, Silver Lake and MSD Partners announced they want to take over EMC and with that become the world’s largest privately held IT company. For me I relived the whole HP / Compaq merger and at that time Compaq was my favorite company. My whole world collapsed. What was going to happen to the world I lived in? It was going to disappear! But luckily it did not. The best pieces of Compaq at the time, their servers, were simply rebranded and sold as HP Proliants and the Alpha CPU “suddenly” appeared as the Itanium from Intel. And everybody was happy. Well, sort of. At least the server department kept on delivering what they were famous for.
And now this happened
I never realized Michael Dell was even in a position to actually raise that kind of money. But with help from Silver Lake and MSD Partners he succeeded to raise sixty five Billion US Dollars! Just imagine! Oh, wouldn’t I like to get my hands on a small portion of that!! But that’s a whole other story. Forget the money, forget the stock exchange market: what will this mean for both companies and the people working there? As some of you know, I’m involved with both the EMC education department as well as the customer facing piece of EMC Support and I want to share my thoughts on the future of my current “Compaq” equivalent, aka “EMC”.
What are Dell and EMC good at?
What specialties do both companies have? What are they good at? How about the customers of either one of them? And what about any overlap?
EMC is best known for their flagship, the Symmetrix. Nowadays it’s called the VMAX3, running the Hypermax operating system (5977): a true enterprise storage array that has all the features, bells and whistles some of the other vendors can also offer, but the innovation EMC has shown in this area, has made them occupy a solid place in Gartner’s upper right quadrant. Some startups have proven to have had very good ideas also, but just imagine that an aircraft carrier like EMC suddenly has to perform an Olympic slalom race: it’s not easy to adapt to the fast changing market. But with their huge market share, I’m sure EMC will stay on top for many years to come. And with other high-end products like XtremIO, VNX, Avamar, Data Domain, DSSD, you name it, they should be very capable coping with the fast changing technology the startups throw at them.
For me Dell is known for their Laptops and servers. 15 To 20 years ago I was a huge Compaq fan with them being in the upper right quadrant when they set the standard other companies had to live by. There was no other vendor that could even come close. Well, Dell in those days was IMHO the cheaper variant for when you’d want an industry standard server for your environment. But times changed and a lot of scale out technologies are now about using commodity hardware. Well, isn’t that what Dell servers are about? Does Dell pose a threat to existing EMC storage technology? I don’t think so. EMC equipment in my opinion is the market leader in the small to midrange market.
To keep it simple I think Dell will primarily focus on servers and EMC on storage and backup as far as back-end products are concerned. And also EMC needs servers for their scale out products like Isilon, the control stations in the VNX Unified and VMAX and nodes for the Avamar systems. It’s going to be a nice marriage with hopefully more efficient use of resources and therefore either higher profits or lower prices and a better position in the high-end market.
Jobs
And what about redundant jobs? So far I’ve heard lots of promises and predictions, but the really redundant jobs that aren’t specifically Dell or EMC could merge and therefore leading to the loss of jobs. In the end you can think of the two giants as two separate companies merging with hardly any overlap, except perhaps in transport, paper work, account management. The non technical jobs are the ones we need to watch out for as these aren’t product specific and subject to changes.
Education
In my opinion the education departments will stay unchanged as each of them focusses on very brand specific products and although Dell might get rid of their entry-level storage products, it’s only a small portion and I think the people involved in those areas can be “reused” in other product lines’ education product lines.
VCE
Now there’s an interesting branch: what about the vBlock? Originally vBlock racks consisted of EMC storage, Cisco servers and LAN and SAN switches again from Cisco and virtualisation from VMware. But now there’s Dell. It’s totally logical if VCE would at least offer a choice of also deploying a vBlock with Dell servers. Now that’s interesting, because VCE would have to be called VDE or VCDE, since there’s still Cisco hardware inside. In order to keep the vBlock alive I think there will be a choice of Cisco UCS and Dell PowerEdge blade servers.
RSA and VMware
Yes indeed, will the future of these two be a separate one from Dell and EMC or will they keep on existing as a semi separate branch? Will Dell use VMware stock to pay for their new dept or can it afford to keep VMware and RSA and use them as extra milk cows?
It’s going to be an interesting year and EMC World in the first week of May will (hopefully) reveal any new plans for the future. My guess is that Las Vegas will be very crowded in 5 months from now!
It’s not Dell that bought EMC but Michael Dell, Silver Lake and MSD Partners. It does give other insights to the story.
And it’s XtremIO. Probably a typo 🙂
Hey Roy, yeah… I released this post a bit too quick. I edited the post as soon as you sent me that reply. Even though everybody mentions simply “Dell” as the new owner, it’s of course a whole clan of companies, investors and people that worked together on this merger. But I don’t like to mention them all all the time, so I simply abbreviated to “Dell”, just like anyone else.