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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.

It's a fair question, and Dell and EMC will have to work out the answer -- what to combine, what to keep separate -- after the deal closes in 2016. One option involves Dell wedding servers, storage and networking gear with VMware's virtualization software. CIOs could then use Dell software that connects on-premises technology with cloud services to connect their clouds to software-as-a-service applications. Such a solution would, theoretically, provide a credible alternative to Amazon Web Services and other cloud infrastructure providers. Synergies already exist between the two vendors, with Dell being among the top resellers of VMware software for the past several years.

Finnegan says he'd like a solution that helps him manage the flow of data between disparate cloud services. "If they make a really strong product set in that space it would be interesting for us to take advantage of," he says.

MRE Consulting CIO Ken Piddington, who used products from both companies when he was CIO of Global Partners, also sees great potential for Dell to strengthen its portfolio in this manner. “It is a bet by Dell that the hybrid cloud is going to be a significant part of the IT organization for the foreseeable future.” He added that the deal joins two technology organizations together that really “need the strengths of the other to compete in the rapidly changing IT marketplace.”

The prevailing sentiment? Cautious enthusiasm

Uncertainty remains, however, as Dell and EMC have been largely mum on the next steps regarding integration of their respective portfolios. That has CIOs such as Gerry McCartney, of Purdue University, exercising caution over enthusiasm. "It feels like this is the first of several steps and we need to know what those steps will be," says McCartney, who spends $7 million a year on Dell computers and $1.5 million annually on EMC storage and analytics software. "These are both important vendors to us so we're paying quite a lot of attention." He noted that it's rare for two companies to emerge from a merger unmarred by changes.

The lack of significant overlap between the combined companies’ portfolios means CIOs won’t have to worry much about the combined companies jettisoning product lines, says Charles King, an analyst with Pund-IT. The companies’ portfolios are actually complementary and, King says, the Dell hardware-VMware software combo, as well as assets from EMC acquisitions such as RSA and Pivotal, will deepen Dell’s efforts in the security and developer communities. And although melding corporate cultures, go-to-market strategies, product groups and sales organizations is a bear for any larger merger, the companies have a long history of partnership and share many partners that can help mitigate challenges. 

 

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