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CIOs eye Dell-EMC merger with cautious optimism

Clint Boulton | Oct. 15, 2015
CIOs have mixed views of the blockbuster merger between Dell and EMC, two incumbent vendors struggling to boost market share in a world that is increasingly moving toward cloud services and mobile devices.

dell emc merger
Credit: Wikimedia

CIOs view Dell's $67 billion acquisition of EMC -- a merger of two incumbent vendors whose hegemonies have been challenged by tectonic shifts in enterprise computing -- with guarded optimism. They see potential in Dell and VMware offering private and hybrid cloud systems as alternatives to the public cloud services sold by Amazon Web Services, Microsoft and Google.

"There's been significant pressure on enterprise infrastructure with mobile and cloud," says Davie Finnegan, CIO of sporting good outfitter Orvis, which uses Dell computers and EMC storage gear. "In the short- to mid-term, [Dell and EMC] have the opportunity for local on-premises businesses because not everybody is in the cloud ... but everyone is going there in the longer term."

Tale of two struggling vendors

Dell and EMC are a marriage of two legacy vendors under siege by increasing corporate adoption of rented compute resources and consumer devices, as well as employees' preferences to use tablets and smartphones rather than PCs to communicate and collaborate. Dell has revamped its core business to reflect the changes, selling servers, storage and networking equipment, and software to construct and manage private and hybrid clouds. Meanwhile, activist investors have repeatedly called for a breakup of EMC, whose storage equipment has lost some of its shine among businesses moving to the cloud. Dell CEO Michael Dell, in an interview with CNBC Monday, summed up the digital disruption that drove the companies to merge:

Dell is a soft landing place for EMC. It’s a well-run company with good products  Glenn O'Donnell, Forrester Research

"IT for a long time has been about how to make old processes more efficient, but with all of the progress in digital technology, there is a kind of digital transformation that is occurring.” He says companies are looking to leverage the explosion in devices and applications, particularly concerning big data and the Internet of Things, to bolster their results. This, Dell says, puts pressure on legacy environments to enter this "new age."

CIOs have watched Dell and EMC’s changes from afar, conducting business with the companies while increasing their consumption of cloud services. But the massive merger portends change, even if its nature can't yet be quantified. Finnegan says he's optimistic about the merger means for Orvis, which he says is increasingly adopting a hybrid cloud computing model. Its point-of-sale system remains on premises, but it is in the process of moving its ERP and marketing systems to cloud services. He says he’s looking forward to what Dell and EMC build for a "guy like me that manages on-premises and cloud ... what are the tools and technology that they bring to the table that allows us to manage both really seamlessly?"

 

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