Published on the 15/10/2015 | Written by Beverley Head
For the Australian VMware users already signed up to attend vForum in Sydney next week, there will be just one topic of conversation – what will the Dell takeover of EMC mean?…
Dubbed the “ready for any” event, the Sydney vForum conference will instead provide a great opportunity for VMware users to decide if there are ready for Dell.
Sheer good luck also sees the event bring together a panel on the first day featuring executives from Dell, VMware and EMC slated to debate “What is the practical impact of an automated future?”. It’s likely users will be more interested in the practical impact of Dell’s takeover of EMC (which owns 80 percent of VMware) on the virtualisation software company’s own future.
Dell and EMC this week confirmed that they had signed a definitive agreement that will see the former buy the latter. It says it will keep VMware as a separate publicly traded company. There’s been little discussion about the potential impact of the merger on other EMC businesses such as RSA or Pivotal.
Michael Dell is expected to lead the merged entity.
The deal has been valued at around $US67 billion, with Dell going into serious hock to effect the takeover. The marketing spin on the deal is that it will create the “world’s largest privately controlled integrated technology company.” But in this era of agile enterprises is biggest always best?
IBM has learned over many decades that it can’t be all things to all users; HP is separating into two from November. Dell, meanwhile, is going for the computing behemoth approach, perhaps harking back to the days where it opted for a direct route to market, rather than the time-trusted channel model.
Dr Kevin McIsaac, analyst with IBRS, said that he did not anticipate much change for the coming two years for VMware users – but nor could he see much upside. McIsaac said that EMC had taken a very hands off approach to the software company in the past, and that it would be interesting to see if this would continue to be the case.
“Or will Dell interfere? It’s a bit like a politician – a good one doesn’t make much difference, but a bad one can ruin things,” he said.
McIsaac characterised the takeover as a “legacy play” and that users of all the systems affected by the takeover would have to keep a watch eye on whether their account representative changed, who in the merged organisation they would deal with, and whether service and support levels would head south.
He also warned that there was a possibility that Dell could create cloud stacks entirely of its own design and prompt some form of “Balkanisation” or fragmentation of the emerging hybrid cloud market rather than supporting the more open approach being taken by a host of other technology companies.
“I think this deal is largely driven by EMC investors demanding a better “shareholder return”. The long term value of this acquisition is uncertain and (its) success highly dependent on Michael Dell’s execution,” he said.
