Michael Dell: VCE Won’t Abandon Cisco Systems
Like a savvy politician on the campaign trail, Michael Dell continues to promise that EMC’s strategic relationships — including VCE’s partnership with Cisco Systems — will remain strong under Dell’s ownership. Still, the statement comes as Dell, EMC and VMware attempt to clear multiple hurdles ahead of the Dell’s pending $67 billion buyout of EMC.
In an open letter to all VCE customers and partners, Michael Dell wrote:
“VCE has enjoyed tremendous success, pioneering the converged infrastructure market with the Vblock System, which today is the world’s leading converged system. After joining with Dell, VCE’s close working relationship with Cisco will continue. Vblock will continue to follow Cisco’s compute and networking roadmaps and EMC’s storage roadmaps to bring the latest technologies to VCE customers.”
Dell, EMC, VMware and VCE: The Bigger Picture
Dell noted that VCE is now the EMC’s Converged Platforms Division. And yes, that division certainly has some momentum. As of early 2015, VCE held about 25 percent of the converged infrastructure market, IDC estimated.
Still, Michael Dell is talking up converged infrastructure at a time when two other major hurdles loom. VMware — largely owned by EMC — is set to announce quarterly results on January 26. And EMC will follow with its own quarterly earnings on January 27.
Some investors are nervous about potential revenue weakness at VMware and EMC, especially amid Dell’s pending takeover. VMware layoffs apparently will cut about 5 percent of the virtualization company’s workforce, while EMC layoffs for 2016 have already been confirmed and perhaps even completed. Deeper details about the VMware and EMC cuts may emerge during the January 26 earnings call.
Dell, EMC Partners Remain Upbeat
Overall, partners sound like they remain optimistic about the proposed Dell-EMC business combination. EMC’s enterprise strength coupled with Dell’s footprint in small businesses and midsize enterprises sounds promising.
But Michael Dell must continue to work overtime to address jitters about the deal on Wall Street. In multiple public communications, he has reaffirmed Dell’s plan to complete the EMC buyout between May and October 2016.