ChannelLife New Zealand logo
Industry insider news for New Zealand's technology resellers
Story image

Dell + EMC = $80B+ IT product behemoth

Mon 5 Sep 2016
FYI, this story is more than a year old

Dell’s planned purchase of EMC makes it like the General Motors of IT, with requisite broad and deep product coverage and all the challenges of providing complementary service.

Dell’s landmark $67 billion acquisition of EMC would create the world’s largest IT product company, knitting together a broad range of IT assets with expansive reach, from consumers to the largest enterprises. The acquisition runs against recent trends toward exiting product businesses or disaggregation, where HP and Symantec broke up and IBM sold off numerous businesses.

The IT marketplace is shifting. The challenge for Dell-EMC will be whether it converges on the right trends. Where the IT landscape is shifting from on-premises products to cloud/”as a Service”-delivered subscriptions to IT services, vendors have shifted their go-to-market strategies and corresponding ecosystems dramatically. EMC’s federated model, while broad, was hardware-focused and lacked the software-bent and cohesion Dell proposes to bring to the new enterprise.

The business, which will emerge in approximately 18 to 24 months, will be far different from present day Dell or EMC. TBR believes the combined entity will be better able to deliver solutions to large and midsize business customers. Separately, Dell and EMC sought to move from hardware sales to software-led solutions selling. The combination creates a complementary suite of products and compatible sales and market coverage, potentially extracting a greater share of wallet from end customers.

However, TBR believes that it remains to be seen if the companies are truly better together, given the ability to address the “as a Service” transition. Time will tell whether the combination of Dell and EMC leadership, products, sales and go to market will provide new value to end customers, given the tie-up between companies does little to capitalise on the “as a Service” economy.

The shift to “as a Service” has Dell-EMC competitors, including IBM and Microsoft, moving from component/solution sales to subscription-based sales models. Although IBM, for example, continues to sell technology components and on-premises solutions, the company moved to subscription and service models, where its focus is helping customers meet their desired outcomes with capabilities such as Bluemix cloud-based services.

TBR believes VMWare is the wildcard for the Dell-EMC tie-up. VMware, which faces market challenges in open source competitors, will provide key software assets and customer entry points to the new Dell-EMC. VMware’s virtualisation-based, software-defined data center capabilities will form the tip of the spear for Dell-EMC solutions. VMware’s guidance could also lend a hand to a new Dell-EMC subscription service model. Yet, VMware remains independent, therefore works with a range Dell competitors that may also benefit from an independent-minded VMware.

TBR believes the next 24 months will dictate the relative success of the Dell-EMC venture.

Biggest thing to watch

Customers’ reactions: TBR believes customers will take the EMC-Dell tie-up in stride. However, loyalty will be tested in the short to midterm. HP Enterprise, IBM, Lenovo, Cisco, Oracle and others will launch customer take-away campaigns immediately.

Michael Dell: TBR believes Michael Dell’s ability to manage the CEO-level, senior executive team of three major companies will largely dictate the success of the deal. TBR notes he successfully brought in numerous company CEOs at critical points in the company’s history, including John Swainson, formerly of CA; Michael Cannon, formerly of Solectron; and Suresh Vaswani, former CEO of Wipro’s IT business.

The company culture: Balancing and redirecting the energies of two traditionally hardware-focused corporations into a new software-centric entity will impact every facet of both companies. Sales force, channel programs and systems integrators relationships, and their respective combinations, will be among the most visible and important of the outward-facing Dell-EMC changes.

Positives

  • Complementary assets: Dell-EMC’s offerings range $200 consumer tablets to $200 million business process outsourcing contracts.
  • Complementary markets: Dell has historic strengths in consumer, small business and the midmarket. EMC’s historic strength lies in large enterprise. The new entity will have permission to play across all segments.
  • Complementary products: The Dell-EMC infrastructure software stack will deliver against broad customer pain points and needs, including software-defined data center.
  • Commitments: The merger would give Dell-EMC room to move, making it easier for Dell to shift or restructure legacy products and programs.

Negatives

  • Debt: Dell-EMC will take on about $40 billion in debt, making operating profit a main focus for the company. This also reduces its ability to acquire.
  • Size: The sheer size and breadth of the Dell-EMC entity makes for a difficult marriage. The new company will be significantly larger, therefore likely less nimble.
  • Competition: HPE, IBM, Cisco, Oracle and others will line up to take Dell-EMC customers.
  • Time: It will take six to 12 months for Dell to complete the acquisition.

Key callouts, by business

Cloud

This merger brings together two companies that struggled to adjust to the market and customer shift to cloud computing. EMC and Dell have a handful of cloud-related assets, but larger businesses in traditional hardware infrastructure are declining. Dell’s hardware infrastructure business and the acquired Boomi assets are the best-aligned to cloud enablement, while EMC leverages the “federated” assets of Pivotal and VMware as the primary cloud-related offerings. Once this merger is complete, the challenge for Dell-EMC will be to more successfully build out a portfolio of services and software assets that deliver value around their strong hardware portfolios.

Neither vendor will be a direct provider of cloud technology, so both will continue capitalizing on cloud opportunity by enabling their partners and customers to deliver cloud services to end users. That strategy will remain an uphill battle for both companies post-merger, but the combination will assemble a broader set of tools to Dell-EMC to bring to bear against other end-to-end cloud enablers including IBM, HP and Cisco.

Security

Dell’s acquisition of EMC will breathe new life into RSA, the security division of EMC. RSA’s portfolio has been shrinking over the past two years, with decreasing development and sales expended in fundamental areas such as network and endpoint security.

Dell’s and RSA’s security portfolios have little overlap, as each vendor delivered products in a half dozen mostly different IT security segments. RSA will fill many of the remaining gaps in Dell’s security portfolio. Integrating RSA products, from a business and technical perspective, will take time, but Dell has proven its ability to integrate security acquisitions quickly and effectively with successful integrations of SonicWall and Credent, for example.

TBR believes integrating RSA’s Security Analytics will be a top priority for Dell, providing a comprehensive tool for customers to receive more actionable insights from their Dell SonicWall, Dell One and Dell Data Protection deployments. Dell SecureWorks will also serve as an integration hub for the RSA acquisition. TBR believes SecureWorks will deploy RSA Security Analytics in its operations centers to gather big data-driven insights from SecureWorks’ threat intelligence, gaining value from the tool internally while building new use cases for sales opportunities.

Data center

Dell will take EMC Information Infrastructure, the company’s core storage business, private. Privatization will enable the newly combined entity to avoid the scrutiny of Wall Street and provide the long-term investment flexibility that will be needed to integrate and restructure discrete portfolio and personnel assets and go-to-market programs.

EMC will improve Dell’s competitiveness in large enterprise accounts, adding its high-end data management and warehousing expertise to Dell’s compute, networking and storage assets. Dell brings know-how in competing in commoditized hardware markets and a strong presence in the SMB and midsize enterprise sectors that will bolster legacy EMC down-market plays such as its VNX arrays and VSPEX reference architectures.

Software

VMware will operate independently to maximize its flexibility to ally with a range of its customers. TBR believes the closer integration of the two businesses under the new structure will add industry skepticism regarding this openness and flexibility, threatening third-party technology alliances. This will add confusion among channel partners and customers.

TBR believes relationships will be a challenge for the integrated businesses to overcome in two strategic markets: cloud and converged infrastructure.

For its part, Dell has been focused on competing in the cloud market as an integrator and broker of hybrid cloud services. The integration of EMC’s Virtustream managed services capabilities and VMware’s vCloud Air program creates new cloud services opportunities for Dell but threatens to increase co-opetition with Dell service provider partners. From the standpoint of converged infrastructure, the integration of Dell’s modular infrastructure capabilities, including through its FX architecture, and manufacturing prowess with EMC’s workload optimisation and systems integration expertise through its dedicated, VCE-based converged systems unit portends expanded, profitable growth opportunities around converged infrastructure.

Article by Geoff Woollacott, TBR senior strategy consultant & principal analyst.

Related stories
Top stories
Story image
Artificial Intelligence
Siemens expands NVIDIA partnership for industrial metaverse
Siemens is expanding its partnership with NVIDIA to enable the industrial metaverse and increase the use of AI-driven digital twin technology.
Story image
Microsoft
Azure-based technology asBuilt signals better BIM outcomes in NZ
The Microsoft Azure-based asBuilt intelligence hub is helping Kiwi businesses accelerate their building information management potential.
Story image
Cybersecurity
Delinea’s Joseph Carson recognised with OnCon Icon Award
Delinea chief security scientist and advisory CISO Joseph Carson has been recognised as a Top 50 Information Security Professional in the 2022 OnCon Icon Awards.
Story image
Gaming
Sony releases a new gaming gear brand for PC gamers
Sony has unveiled INZONETM, a new gaming gear brand for PC gamers that makes gaming more immersive and offers greater gaming ability.
Story image
Ransomware
Businesses unprepared to defend against ransomware attacks
Ransomware attacks continue to impact organisations worldwide with high costs, but businesses are still largely unprepared.
Story image
Awards
Microsoft names A/NZ Partner of the Year award winners
The awards recognise partners across the globe for their innovative use of Microsoft technologies to help customers succeed.
Story image
Revenue
Datacom announces revenue of $1.45 billion, fall in profit
Growing market pressures and border closures saw Datacom place increased focus on talent development initiatives for both existing and future employees.
Story image
Tech job moves
Tech job moves - Bitdefender, Cohesity, Fortinet & MODIFI
We round up all job appointments from June 27-30, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Digital Transformation
Retailers must invest in new tech to keep up with online shopping demand
There's a higher demand for more purchasing opportunities at our fingertips, as well as greater expectations when it comes to the online customer experience."
Story image
Salesforce
Data crucial to capture shoppers' wallets post-COVID
First-party data strategies key to driving personalisation, customer satisfaction, and long-lasting relationships according to a new report.
Story image
Identity and Access Management
Ping Identity named a Leader in Access Management
Ping Identity has been named a leader in the 2022 KuppingerCole Leadership Compass report for Access Management. 
Story image
Aspire
NEC expands Open RAN ecosystem with Aspire Tech acquisition
With its agreement to acquire Aspire Technology, NEC Corporation has further increased its capacity to deliver End-to-End Open RAN ecosystems.
Story image
Citrix
The best ways to attract young talent during labour shortages
New research from Citrix reveals hybrid working and ventures into the metaverse are top of mind for Gen Z workers.
Story image
Artificial Intelligence
Vectra AI named as AWS security competency partner
Threat detection and response company Vectra AI has announced that it has become an Amazon Web Services Security Competency Partner.
Story image
Internet of Things
ManageEngine wins big in IDC MarketScape assessment
ManageEngine's Endpoint Central service has been recognised as a leader by IDC MarketScape in several categories including Internet of Things device deployments and UEM software for SMEs.
Story image
Cybersecurity
FIDO Alliance releases guidelines for optimising UX with FIDO Security Keys
The new guidelines aim to accelerate multi-factor authentication deployment and adoption with FIDO security keys.
Story image
Web Development
Whitecliffe fosters careers for the future of tech
Do you want a career in Information Technology, Networking, Web Development, Software Development, or are you looking to upskill?
Story image
Review
Hands-on review – CleanMyMac X utility for macOS
We get hands-on with a useful utility that macOS users never thought they needed but probably do.
Story image
Hybrid workforce
Why hybrid working is here to stay and how to ace it
Citrix's new report reveals hybrid workers are more productive and engaged at work than their office and completely remote counterparts.
Story image
Mergers and Acquisitions
SAS acquires Kamakura to propel risk technology innovation
Underscoring SAS growth in the domain-specific solutions space, the acquisition will enable SAS to greatly enhance the breadth of its risk solutions portfolio. 
Story image
Ransomware
Secureworks reveals new information on BRONZE STARLIGHT threat group
New research from Secureworks has uncovered new information on the Chinese threat group BRONZE STARLIGHT and how they are using targeted ransomware to initiate complicated attacks.
Story image
HP Inc
Firmware attacks significant threat in age of hybrid work
Changing workforce dynamics are creating new challenges for IT teams around firmware security, according to new research.
Story image
Hybrid Cloud
HPE GreenLake advances hybrid cloud experience with new services
"The innovations unveiled today further build on our vision to provide the market with an unmatched platform to spur innovation and drive transformation.”
Story image
Electrical
Up to $2.4 million shortfall in the collapse of IndeServe
We delve into the liquidators first report on long-standing networking service provider IndeServes collapse.
Story image
Microsoft
ASI Solutions named finalist of Microsoft Surface Partner of the Year
"ASI Solutions has a strong Microsoft focus, building value by helping customers maximise investment in modern workplace solutions."
Story image
Samsung
Monitors are an excellent incentive for getting employees back
The pandemic has taught us that hybrid working is a lot easier than we would’ve thought, so how can the office be made to feel as comfortable as home? The answer could be staring you in the face right now.
Story image
Dark web
Cybercrime in Aotearoa: How does New Zealand law define it?
‘Cybercrime’ is a term we hear all the time, but what exactly is it, and how does New Zealand define it in legal terms?
Story image
WatchGuard Technologies
Ransomware volume doubled 2021 total by end of Q1 2022
Ransomware detections in the first quarter of this year doubled the total volume reported for 2021, according to a new report. 
Story image
Artificial Intelligence
Dynatrace extends automatic release validation capabilities
Dynatrace has extended its platform release validation capabilities to improve user experience at every stage of the software development lifecycle.
Story image
Cyber Criminal
Identity and access: the fight is on
Blue team defenders are used to protecting our data, applications, and users with access controls and other security mechanisms, which is why attacks like this are especially challenging when they target identity and access control systems.
Story image
MSP
Video: 10 Minute IT Jams - An update from CyberArk
Olly Stimpson joins us today to discuss the importance of MSP programmes and how MSP partners are experiencing success with CyberArk.
Story image
Hybrid Cloud
Advent One acquires Layer 8 Networks, complements hybrid cloud offering
The acquisition comes at a time of surging demand in hybrid cloud, network virtualisation and network security.
Story image
Financial results
Margins & revenues up at New Zealand arm of Acer Computer
We look at the local financial statements of Taiwanese manufacturer Acer Computer Inc.
Story image
New Relic
New Relic looks to observability market with new partner programme
New Relic has announced the availability of New Relic Partner Stack, an enhanced programme expanding New Relic’s commitment to partners.
Story image
Artificial Intelligence
Eight top DevSecOps trends to support IT innovation in 2022
The use of DevSecOps practices is growing, as it is increasingly seen as the best way to produce high-quality and secure code. So what are the current trends?
Story image
Microsoft
SAS wins Microsoft ISV 2022 Partner of the Year award
"We formed the SAS and Microsoft strategic partnership with a shared goal of making it easier for customers to drive better decisions in the cloud."
Story image
Design
Hands-on review: Phillips Hue starter kit
The set-up was one of the simplest I have ever had to do. It is also where the products shine. I was able to connect the bridge, the three lightbulbs and the strip within 10 min.
Story image
Robotics
Evonik relies on Getac F110 tablet to control autonomous robot
The aim of the project is to evaluate the practicality of an automated robotic maintenance and inspection solution in the chemical industry.
Story image
Cybersecurity
Why is NZ lagging behind the world in cybersecurity?
A recent report by TUANZ has revealed that we are ranked 56th in the world when it comes to cybersecurity - a look into why we're so behind and what needs to be done.
Story image
Entelar
How TruSens air purifiers can create healthier workspaces
The pandemic has heightened our awareness of our own and others’ health, and made us all much more conscious of the environments we work in.
Story image
Cybersecurity
Tech and data’s role in the changing face of compliance
Accenture's study found that 93% of respondents agree or strongly agree new technologies such as AI and cloud make compliance easier.
Story image
Finance
Airwallex launches global payment services in New Zealand
The launch will enable businesses in New Zealand to tap into Airwallex's global payments services, offering an alternative to traditional banks.
Story image
Dicker Data
EXCLUSIVE: Why women in IT makes good business sense - Dicker Data
The Federal government wants to bolster female participation in the tech industry to at least 40% by 2030. Here's how one homegrown Australian company has already reached that goal.
Story image
Cybersecurity
Blasé attitudes to cybersecurity by business a national risk
The largely unregulated state of cybersecurity in NZ, and consequential ambivalence of most businesses, risk hurting the country's trading prospects.