Enterprise, Mergers and Acquisitions

Dell Buys EMC: Big Questions for Channel Partners

You know the top-line: Dell buys EMC and maintains VMware as a public company in a deal worth roughly $67 billion. But take a closer look and channel partners working with one or both companies should not expect combined partner program details until at least May 2016, ChannelE2E believes.

In a prepared statement, the companies said:

The transaction combines two of the world’s greatest technology franchises with leadership positions in servers, storage, virtualization and PCs and it brings together strong capabilities in the fastest growing areas of the industry, including digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile and security."

Read between the lines and Dell is pointing to the EMC Federation of companies -- which also includes RSA (Security), VMware and VCE (Virtualization and software-defined capabilities) and Pivotal (cloud and big data).

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Dell and EMC also point to the overall customer reach, stating that the "transaction will unite Dell’s strength with small business and mid-market customers with EMC’s strength with large enterprises to fuel profitable growth and generate significant cash flows."

Deal Timing

Dell expects the deal to close between May and October 2016. Some reports suggest that EMC can consider alternative buyer bids if they are submitted. But I don't know if giants like Oracle, IBM, HP and Cisco are willing to open their wallets this wide -- especially at a time when some companies are breaking themselves up rather than growing through M&A.

For channel partners, that means Dell and EMC will likely strive to promote a "business as usual" and "great things are coming" messaging over the next few months. But rivals will surely create some competitive noise in the market.

Hewlett-Packard Enterprise and HP Inc. are set to break into two companies on November 1. Oracle is set to host OpenWorld later this month. Cisco Systems, which sold off its VCE stake to EMC months ago, is no run by new CEO Chuck Robbins. And IBM continues to bet more and more on its big data analytics, cloud, mobile and security strategies.

Remaining Questions

Among the questions facing Dell and EMC:

  • Partner Programs: Will the two companies ever truly combine their channel partner programs? In many ways I doubt it. I can see combined server, storage and network initiatives at the high end of the market. But additional go-to-market strategies, I suspect, will likely remain siloed.
  • Leadership: Michael Dell will run the combined companies. Will EMC CEO Joe Tucci stick around after the deal closes? Some reports suggest the door is potentially open for him to do so.
  • Larry Ellison's Ego: Of all the potential bidders, I think Oracle Chairman Larry Ellison is the one guy with the large enough ego and wallet to potentially make an alternative bid for EMC -- just to muddy the waters for a few weeks or months. My guy says Ellison won't do so, preferring instead to launch sales initiatives that counter EMC. (Ironically, though, I believe Dell is Oracle's largest reseller.)
  • Winners and Losers: So who potentially benefits and who potentially loses from as Dell buys EMC?...

...We'll be back with that shortly.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.