Dell Buys EMC: Potential Winners and Losers

As Dell buys EMC and gains control of VMware for roughly $67 billion, here's a look at potential winners and losers in the deal.

Potential Winners...

1. Dell: On the one hand, I generally don't like big merger and acquisition deals. Generally speaking, I think they underperform the market and trigger distractions that harm shareholders, customers and partners. But in this case I'll at least consider the potential upside for Dell, especially since the company has a reasonably good track record with acquisitions. Still, most Dell buyouts to date have been tuck-ins focused on a a specific market segment. The EMC buyout is massive and complex... The biggest upsides...

2. Joe Tucci: His contract as CEO of EMC was up. He was looking for a successor. He found one in Michael Dell. At least the questions about "who will succeed Joe Tucci" are now over?

3. Cisco Systems: Before Chuck Robbins succeeded John Chambers as CEO in July, Cisco wisely did some housecleaning. The company essentially sold off its VCE stake to EMC, and has avoided big, unwieldy M&A deals that can be distracting.

4. HP Enterprise: Dell has criticized Hewlett-Packard for the forthcoming company breakup, alleging that separate businesses (Hewlett-Packard Enterprise and HP Inc.) will lead to distractions and incomplete solutions. Now, HP can spin a similar story against Dell and EMC, alleging that the deal will lead to distractions and an internal focus rather than a customer- and partner-centric focus.

5. IBM: I was surprised that Dell and EMC said so little about analytics and big data in the official M&A announcement. IBM will double down on its own big data analytics messaging.

6. Microsoft Hyper-V and KVM: Server vendors like Hewlett-Packard and Lenovo have leaned heavily on VMware over the years. But if Dell mismanages the EMC-VMware relationship, it could send server makers and data center customers toward more Microsoft Hyper-V and KVM (Kernel-based Virtual Machine) adoption.

Potential Losers

1. Dell and EMC: Sure, Big M&A can trigger Big Opportunities. But can also lead to Big Distractions.

2. Oracle: To the best of my knowledge, Dell is (at least until recently) Oracle's largest reseller. I don't expect that relationship to disappear, but as Oracle competes with EMC on the storage front, Dell might be more inclined to double down on Microsoft SQL Server and the next generation of databases like NoSQL.

3. VMware: The company works closely with all of the major server providers. I expect that work to continue. But if Dell messes up the EMC-VMware relationship, it could send customers to vSphere rivals like Microsoft Hyper-V and KVM.

Unclear

1. Citrix Systems: The company has been looking for a buyer and allegedly reached out to Dell a few weeks ago. On the upside, the Dell-EMC combo (with VMware hitching a ride) could make potential buyers give Citrix a second look. But on the downside, I doubt Dell is willing to be among the potential suitors.

2. NetApp: Now that EMC is gaining a new parent, the storage industry will watch NetApp closely for its next move. Surely, NetApp would love to be acquired by a close partner like Cisco Systems. But I'm not sure Cisco or any other partner wants to buy a slow growth or no growth storage company.

3. VMware CEO Patrick P. Gelsinger: Is this deal good or bad for Gelsinger's career path? It's far too soon to say.

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