Dell CEO Michael Dell

Published: October 13th, 2015

I have to be honest with you all. I was under that proverbial rock yesterday as Dell and EMC announced one of the most historic deals in the IT industry. I was enjoying my third helping of Thanksgiving Day turkey at my parent’s house. Shortly after that the Blue Jays playoff game started. They won forcing a Game 5 decider. So you have to excuse me if I unplugged for the day.

By doing so I totally missed the massive $67 billion deal from Dell and EMC. From a channel perspective there isn’t much too really worry about right now. This deal is going to take a year to complete and it will be at that time when it’s going to get really interested for Dell.

Dell has been doing a great job in the last two years becoming really relevant to the channel. The move to go private was a smart and shrewd move by Michael Dell. Also the time could not have been any more perfect as HP planned a long separation. There are many channel partners who have told me HP lost some focus in this process, while Dell became sharper with the channel. The vendor’s channel business is north of 40 per cent in North America, while in Canada it rose to 31 per cent. It was at 25 per cent in 2014.

By acquiring EMC it will further Dell’s ambition to truly be an end-to-end technology provider. This means the channel will have about a year to prepare for the new Dell as an all-encompassing technology provider. The same way they’ve had to with HP.

Speaking of HP, here is what they had to say about the deal: “This is a real opportunity for HP. Two of our largest competitors are attempting a highly distracting, multi-year merger, just as we are launching two new, focused companies.  The massive debt burden Dell and EMC are taking on undoubtedly means that they will have to radically reduce R&D, and integration inevitably will create disruption as they rationalize product portfolios, channel programs, and leadership.  While Dell and EMC are sorting out their future, Hewlett Packard Enterprise and HP Inc. will be working to take share and advance our technology leadership in key areas like converged infrastructure, private cloud, all-flash storage, personal systems and printing.”

HP does have a valid point here. Dell is acquiring EMC at a huge price point. Sure the rumour was out there that HP wanted EMC too. So this is the pot calling the kettle black in some way, but the first two years of this amalgamation will have a heavy debt burden for Dell. And, just as HP has been distracted splitting in two; Dell could be too. However, Dell has had a better track record of acquisition integration than HP.

The all-flash storage battle is also not going away. Don’t be surprised if companies such as Pure Storage, Nimbus Data, Violin Memory, HDS, and others keep hammering away at EMC.

Also Chris Hazelton, research director for enterprise mobility at the 451 Research company brings up an interesting point:

“This deal will bring some uncertainty to the future of Dell’s own enterprise mobility business. Built on top of previous acquisitions of KACE and Wyse, Dell will likely slowly transition the sales of Dell EMM out in place of AirWatch by VMware. Sales teams will put emphasis on what is popular with customers, and AirWatch has built significant market share before and after its acquisition by VMware. The reselling of AirWatch by Dell could mean a significant growth opportunity in the small and medium business market. This means that as Dell sales reps push AirWatch, Dell’s own EMM offerings will suffer. For AirWatch, Dell security for mobility will fit in well. AirWatch has put together its Mobile Security Alliance, which does not include Dell’s Data Protection and SonicWALL, but they will very likely join soon.”

In the long run Michael Dell could have something special here with Dell and EMC. The things these two can provide are well positioned to address the digital transition in the marketplace specific to software-defined enterprise, converged infrastructure, hybrid IT, cloud, mobility and security. Time, as always, will tell.