Dell has agreed to buy EMC in a cash-and-stock deal valued at about $67bn. EMC shareholders will get $24.05 per share in cash as well as tracking stock linked to some of EMC’s interest in VMware. The deal will probably close in mid-2016, but there remain many questions over future direction and prospects for the likes of VMware, VCE and both organisations’ channels. IT Europa has been sounding out opinions on likely outcomes.
EMC has been looking for a future plan for a while with CEO Joe Tucci (below) looking to retire again, while Dell is flush with funds and free to make its own way after going private. Both organisations started with direct selling and were later converts to the channel, both professing indirect as the way forward and investing in channels in recent years. EMC once had a very profitable relationship with Dell, and some look back to this as an important indicator of cultural fit.
But both have been hardware-oriented, and while Dell has tried to diversify, and EMC has moved steadily into smaller units and markets, both are aimed mainly at enterprises. With this market moving increasingly to cloud, there is a danger that the only buyers in town will be the huge data-centres and global cloud hosters such as Google, Amazon and the like. And these companies do not buy from Dell, EMC or anyone like that; they have their own special servers built.
In many ways, the other remaining giants of the industry are facing the same position: HP, Oracle and IBM have also proved keen to supply cloud, but reluctant to move too quickly for fear of cannibalising existing sales.
So the channel position has to be one of wait and see; in a market where brand become less important, and open standards rule, does having a badge on a box from any of the big vendors still matter? It seems to in the PC market, where big brands have grown, but we’re not so sure about boxes hidden in data-centres and software.
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