Beneficial at large, Dell-EMC would have to erase some lines of worry as well

Saurabh Kumar

NEW DELHI, INDIA: Four years ago on a busy October morning Dell and EMC terminated their eight-year old partnership. So much has changed from then to October 2015, when Dell announced the acquisition of EMC, touted as the largest M&A deal in the technology industry.

Dell has been pushing hard to move from PCs to a provider of enterprise technology solutions. Declining PC, laptop sales clubbed with Dell’s inability to break into enterprise storage and server market were some of the drivers to move towards the acquisition.

There are some beneficiaries as well. The merger would assist cloud service providers as well as niche infrastructure solutions providers in many ways.

Dell-EMC might emerge as a front runner in software-defined infrastructure (SDI). SDI is set to change the face of enterprise computing wherein the physical hardware- based controls in an enterprise network and data center would move towards software-based control.

Leading analyst firm IDC predicts exponential growth for the SDI market: growing from $1 billion in 2014, to $3.7 billion by 2016, and $8 billion by 2018. The first steps though would be to look for interoperable infrastructure elements in the IT landscape and that’s where Dell-EMC would aim their medium term strategy focus.

The merger is advantageous for smaller niche players in the converged infrastructure space. Today, customers are asking for better infrastructure solution than a traditional server, storage, network device.

Converged infrastructure means one physical appliance with differing functionalities, and therefore, lesser maintenance cost and effort. Dell and EMC in their separate ways have been playing in this space. An integrated company would have bigger focus and faster delivery to the market.

The Dell acquisition of EMC will play in favour of cloud players who would be able to offer a better deal to their customers. The new merged entity can provide cloud players the infrastructure to manage converged infrastructure not only easily but make it less expensive than disparate systems.

Dell partners will now have a full range of IT services to provide, right from cloud relevant products, services, computing and big data management to networking and storage.

Multi-tenancy would also be easier with converged infrastructure and SDI would give a better control through software on physical layer, thus making it cost effective and provide the much needed agility to access resources instantaneously and deliver new applications to users without any hassle.

While the merger would not have immediate impact on customers in the immediate future, there are few medium term areas of concerns too. Existing storage customers of Dell would worry about the support. Dell would have to be proactive in removing any fears in client’s mind with solid product roadmap.

Integration would be another challenge wherein two large companies with different culture and team structures would be looking to integrate and grow on each other’s strength.

Perception and brand positioning is another issue that the merger would face. Dell is mostly perceived as a PC and laptop player. It’s acceptability in enterprise space would require immense effort.

The future of VCE would be another concern. There are many customers that have purchased VCE infrastructure and they would be worried of Cisco’s support. Although leadership of both the companies though have announced their continued support to this initiative, worry lines have started appearing on the foreheads of the CIOs and CFOs.

If things fall in place, with the unprecedented merger, Dell will be able to offer a platter of IT services thus helping its partners to strike a better deal. On the other hand the company will be able to make the much required inroads into large enterprises competing with names like HP, IBM and Cisco.

The article is authored by Saurabh Kumar, Head, Global Sales and MD, South Africa, In2IT Technologies