Dell seal one of the biggest deals in tech history

This week has seen Dell seal one of the biggest deals in tech history, after the privately run PC maker agreed to acquire data storage giant EMC for circa $67bn

Post Author: George Kenny, Senior Technical Consultant – Data Storage & Virtualisation Specialist.


It’s been widely reported that EMC have accepted an offer worth $33.15 per share, including $24.05 in cash. Remainder of the securities are tied to the value of VMware (the software giant that EMC formerly controlled), VMware will continue to remain as a listed company.

Despite the mass of financial commodity markets, share prices, mergers & acquisition news that is currently adorning the internet, we at Krome are acutely interested in this recent announcement, with both Dell and VMware being key vendor partners to Krome Technologies, we’re keen to see what this will mean to the two product portfolios moving forward, along with how this will no doubt affect our customers and future solution designs.

It’s no news to anyone that Dell have been “toying” with the storage portfolio over the past 18 months lining up a merge of all of their storage products into one unified solution. Dell currently boasts a broad line-up from their entry level MD series arrays through to enterprise class EqualLogic and Compellent series arrays. The mixture of varying products can become somewhat a minefield for the average IT buyer looking to improve or upgrade their estate.

The downside for Dell was that whilst their product portfolio is wide reaching, they lacked the reputational clout of someone like EMC in the enterprise space and the new technology appeal of the emerging start-up arena with newbies such as Nimble and Tegile chasing.

Bringing the entire EMC product estate on board will certainly answer some of Dells critics with established product line ups such as XtremeIO, VNX and Isilon. EMC’s own product range is vast and will certainly step on the toes of some of Dell’s existing platforms to say the least. The trick for Dell now is how to gracefully onboard the EMC product range with shiny new Dell badges and ensure positive market reception from their loyal customer and partner base.

With this merger being the first of many recent predictions of consolidation among the world’s top tech giants to have seemingly come to fruition, we can probably expect to see further large vendor alliances and acquisitions to follow in their footsteps.

On the day of the announcement our Managing Director Rupert Mills made the following comments to channel publication CRN:

“This could be the start of some dominoes happening among more vendors. I can only see Cisco, NetApp and HP looking to shore up partnerships in response to this.”

There is an awful lot of product overlap between Dell & EMC, not only in midmarket storage but also in back-up and virtualisation, as well as with EMC’s VCE alliance with Cisco, which potentially may not survive for long now. I just can’t see them putting R&D into keeping all of the products running and competing with themselves.

My concern would be how long it takes them to stabilise these two very large companies after they merge, as there’s going to be an awful lot of staff and processes overlap. Dell have been through many major acquisitions in the past, including the likes of EqualLogic, Wyse and Quest, so they are well versed, but the sheer scale of EMC has got to lead to some disruptions in the short term.

There will be an awful lot of product overlap, which will mean there will be a lot of shedding or discontinuation of products, from one side or the other. But providing the strongest one out of each of those survives, Dell will end up with a better offering in the end.”

One thing is for sure, the next few months are certainly going to be interesting, not only for Dell, EMC & VMWare but also for all of their respective partners.

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