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Michael Dell on closing EMC deal: 'We can think in decades' | Any Tech news
Home / Networking / Michael Dell on closing EMC deal: 'We can think in decades'

Michael Dell on closing EMC deal: 'We can think in decades'


dell-technologies-emc-world.jpg

Michael Dell

Michael Dell, CEO of Dell Technologies and its now $74 billion in sales, said his company will enable customers to innovate, think big, utilize new technologies such as artificial intelligence and sit in the middle of digital transformation.

Dell closed its EMC acquisition and unveiled Dell Technologies, a family of businesses designed to cater to multiple levels of IT spending. The enterprise-focused unit will be known as Dell EMC and occupy nearly every corner of the data center. The rest of the Dell Technologies–Pivotal, RSA, SecureWorks, Virtustream and VMware–will retain independent identities.

The CEO said the combination of Dell and EMC will be an industry changing event. Sure Hewlett-Packard split up into HP Inc. and HPE, but for Dell scale will matter.

Also: Dell Technologies lifts off: Here’s what to watch as Dell, EMC, a bevy of enterprise businesses combine

“We don’t have to cater to short term thinking. We can think in decades. We will be the trusted provider for infrastructure for the next industrial revolution,” said Michael Dell, speaking on a kickoff conference call for the company. Dell later noted on the call that his company has been liberated by not having to deal with 90-day calendars. “A big focus for us will be on remaining nimble as we continue to grow and serve our customers,” he added.

The footprint for the combined company is sprawling. Consider:

  • Total revenue across all units is $74 billion.
  • 140,000 employees.
  • Presence in 180 countries.
  • 25 manufacturing locations.
  • 40,000 sales people.
  • 30,000 customer service and support people.
  • More than 20,000 patents and patent applications.
  • $12.7 billion in invested in R&D over the last three years.

Dell Technologies’ core businesses will include client, infrastructure and services. There will be go-to-market strategies for enterprise, commercial and consumer and small business.

In a slide, here’s Dell Technologies’ stack and portfolio.

dell-stack-with-emc.jpg

The challenge for the world’s largest privately held tech company will be to remain nimble given its scale. As for product overlap, the two large tech vendors fit fairly well. Dell has SMB and mid-sized strength and EMC is all about large enterprises. For instance, Dell and EMC both sell storage, but CMO Jeremy Burton noted that Dell’s play is Compellent and carries a price tag in the $15,000 to $25,000 range. EMC systems are way higher.

Burton also noted that customers aren’t likely to see any dramatic go-to-market changes. “We’re in the middle of a fiscal year and we don’t plan on many changes until February,” said Burton. Meanwhile, popular systems from Dell EMC’s VCE converged infrastructure unit will largely remain the same. VCE’s VBlock will still remain a partnership with Cisco UCS, EMC and VMware. Dell will be the compute node behind Dell EMC’s VXRail hyper converged system.

As for the leadership of Dell Technologies, there’s a mix of execs from all teams. David Goulden will be president of the infrastructure solutions group at Dell EMC. Marius Haas will be president and chief commercial officer of Dell EMC. Bill Scannel will lead enterprise sales at Dell EMC and be focused on 3,000 named accounts. Haas will have the commercial team. The full leadership roster is on Dell’s launch site.

On day one of Dell Technologies the company outlined commitment to debt reduction, its primary business group, efforts to gain efficiencies over time and counter rivals, which were already issuing statements about the company.

Michael Dell noted that his company’s debt payments and ratios are “less than what rivals pay in debt and share buybacks.”http://www.zdnet.com/”Any FUD out there to the contrary is factually incorrect,” said Dell.

Of course, rivals are going to pounce. Lenovo said in a statement:

Today’s transaction, while historic, brings unprecedented disruption for many data center customers. They 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 and Lenovo is well positioned to help them navigate the turbulent waters. With open and flexible data center solutions, Lenovo represents a strong alternative to the forced migrations and hidden sales agendas that will come with this massive acquisition. That is why we believe today’s news creates significant business opportunity for Lenovo and we are confident in our ability to compete effectively against this new entity and the entire industry.

IBM has launched an all-Flash storage offering and migration program called Flash In. The goal is to poach Dell and EMC customers.

What may thwart rivals of Dell and their fear, uncertainty and doubt campaigns will be that Dell Technologies will be private. There will simply be fewer public statements and earnings calls to use.

Goulden said Dell EMC will be the leader of cloud infrastructure and the hybrid approach is the future. Dell EMC will look to expand partnerships and connect clouds. “We will also have our own cloud with Virtustream focused on mission critical applications,” said Goulden. “On VMware we have a strong presence with the cloud partner network.”

What remains to be seen is whether combining two mature tech giants will lead to growth. For the six months ended June 30, EMC’s revenue of $11.49 billion fell 1 percent from a year ago. However, EMC’s sales got a boost from VMware. Information storage, enterprise content and RSA had revenue declines of 4 percent to 5 percent for the six-month period ended June 30.

Dell outlined its fiscal 2017 second quarter results and its $25.26 billion in sales for the six months ended July 29 was down 1 percent from a year ago. Enterprise sales of $3.8 billion in the second quarter was flat with a year ago as was its PC unit.

Add it up and the combination of Dell and EMC’s federation of companies initially equates to flat growth. Then again Michael Dell isn’t worried about a earnings driven calendar. “We’re confident we can grow in both markets that are consolidating and the faster growth categories,” said Dell. “We’re confident in the approach we are taking.”



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