Dell EMC: Laughing All The Way To The Bank
May18

Dell EMC: Laughing All The Way To The Bank

LAS VEGAS: The second Dell EMC World is over, a variety of products and services have been unveiled, 13,500 customers, partners and staff have gone home — including me, so ignore the address above — and now comes the $60-billion-plus question, what comes next? For the ‘nattering nabobs of negativism’ like HPE’s Meg Whitman, the company is struggling to stay afloat with $50 billion in debt, it’s mired in hardware-based, commodity hell and is quickly becoming obsolete as everything moves to the cloud and IT as a Service. The reality is far different: Dell is a leader in 15 of Gartner’s Magic Quadrants; it is the largest enterprise storage vendor; it is the third largest PC vendor, but unlike many of its competitors, is growing market share and increasing ASPs. All told, the combined entity — including Dell Technologies, Dell EMC, RSA, Pivotal, Virtustream and VMware — is bringing in $75 billion a year, which is not too shabby. “It’s all about show me the money,” said Forrester analyst Glenn O’Donnell, and the company is “laughing all the way to the bank,” posting solid numbers as it closes in on its first year following the EMC acquisition. According to a recent interview with David Goulden, president of Dell EMC, the company’s focus is a long-term game, looking three to five years in the future, where they see an even more consolidated industry than today and where they are uniquely positioned as an essential infrastructure, broad-based platform. Organizations are looking to have fewer information technology suppliers, and they want the ones they retain to be strategic and more capable, he pointed out. DEW17 was all about transformation — digital, IT, workforce and security — and I reached out to a number of analysts and asked them for their views on where Dell EMC is in its own transformation, and what it should focus on for the immediate future. Their responses follow: Rob Enderle, President and Principal Analyst, the Enderle Group: The IT market is hell bent on transformation at the moment and thanks to the promise of lower taxes and a huge ramp in valuations firms are investing in capital projects at an impressive rate so the opportunity, to quote President Trump, is HUGE! Their performance is good, the merger set them back far less than most expected largely because the execution literally set the bar for efforts like this and their old VCE unit was on the forefront as the most successful converged and hyper-converged provider. And it is these concepts that appear to be having the biggest impact on firms that truly want to change. Jaguar/Land Rover was...

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Has Dell Got The Winning Ticket To The DT Sweepstakes?

A significantly larger and much deeper-in-debt Dell has packed up the inaugural Dell EMC World event — 8,000 attendees — and will hold DEW2 next May in Sin City (or as I call it, Lost Wages). With the just-completed acquisition of EMC, the new enterprise business, Dell EMC, is the largest enterprise storage and server vendor, but while storage capacity and server unit shipments continue to soar, prices and margins continue to erode. In addition to the IT industry’s largest debt load, Dell added significant resources in enterprise storage (EMC), virtualization (VMware), cloud (Virtustream, Pivotal and ECS), networking (SDN/NSX), all-in-one appliances (VCE) and security (RSA). The company also has investments in 150 companies for future technologies. It moved into top spot in server shipments for the most recent quarter, while EMC tied for first place with HPE ($1.6 billion each) in enterprise storage, with Dell in third place. In total, Dell claims leadership in 20 Gartner Magic Quadrants, but where is the growth and profitability going to come from? At DEW 1.0, the company called out digital transformation (DT or DX) as its future, while beefing up its present with a variety of cloud, appliance, analytics, security and flash announcements. “I say we’re going to be the trusted provider of essential infrastructure for the next industrial revolution,” said Michael Dell in his keynote. We’re facing “the sunrise of a new era… digital dawn” and the opportunities are huge, he added. Or as GE’s CIO put it in a video at the show: “You go to bed an industrial company and wake up as a software and analytics company.” Technology is undergoing sweeping changes as a result of cloud, analytics, software-defined everything, Internet of Things, mobile and social, and these technologies/applications are helping to drive the digital transformation impacting every aspect of our lives. Dell is now the biggest enterprise IT vendor offering the broadest portfolio of hardware, software and services, while its two closest competitors fall further behind. IBM continues to struggle with growth while HPE continues to struggle with its smaller-is-more-agile-and-therefore-more-relevant philosophy. “At Dell EMC World you’re getting a look at the next great technology company,” said Dell. David Goulden, President and Chief Commercial Officer, Dell EMC, believes the company has first-mover status in both the datacenter consolidation currently driving the enterprise IT market, and in the emerging digital transformation. He also believes Dell is best-positioned because of its size and breadth. “We don’t see many customers say I want more partners.” They want fewer, more capable IT partners, not a bunch of point product vendors. He calls Dell EMC and its DT focus “a game changer.” Other...

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Dell 3.0 Takes Center Stage at DEW

Austin, Texas:  The critical question arising from the inaugural Dell EMC World event — at least for me, an IBM, HP/E and Dell/EMC/VMware investor — is what makes Dell’s prospects any brighter than those of its two main competitors, IBM and HPE, and the trio of enterprise vendors offering more limited portfolios — Cisco, Oracle and Lenovo? IBM has seen its sales shrink for the last 17 quarters, HPE is just shrinking, and the other contenders can only offer partial solutions — predominantly networking and datacenter servers, DBMS software and appliances, and devices, respectively. From its humble roots in Michael Dell’s college dorm room, the company has scaled the PC heights, added servers, storage, software, networking, security and services and, with the completion of the EMC acquisition, is now grappling with the IT industry’s largest acquisition and largest debt load. It has also added significant resources in enterprise storage (disk, flash and software-defined), virtualization (VMware), cloud (Virtustream, Pivotal and ECS), networking (SDN/NSX), all-in-one appliances (VCE) and security (RSA). Of course there is a lot of overlap too, and while the combined companies may point out the differences, many others will be concerned about the similarities. We’ve already seen signs of tighter focus — i.e. the sales of the enterprise content division, services and software units, and the (lower-than-expected) SecureWorks IPO — and the first workforce reductions, 2,000-3,000 jobs are expected to be cut, out of 140,000. On the good (?) news front, Dell moved into top spot in server shipments for the most recent quarter, while HPE held on to top spot in revenues; shipments grew 2% year-over-year, while revenues edged 0.8% lower. Even better, EMC was named a leader in integrated systems, and the acquisition should strengthen that position, although Gartner cautions that uncertainty will plague the new Dell-EMC-VMware combination that brings ‘multiple overlapping and competing integrated system strategies under one roof.’ The results were equally ambivalent for enterprise storage, where revenue was flat while shipped capacities shot up 12.9%; EMC tied for first place with HPE ($1.6 billion each) while Dell came in third place with a revenue increase of 14%, up to $1 billion. Prior to the acquisition EMC was pushing a software-defined everything strategy, and it’s unlikely that focus will change under new ownership. The current evolution of IT is offering customers a couple of choices in pursuit of shrinking data centers, lower CAPEX and OPEX and the ability to leverage the cloud: some form of do it yourself versus an all-in-one solution, and hardware versus software lock-in (and that at the end of the day, there’s no getting away from software lock-in), Manuvir Das,...

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EMC, Dell, Pivotal, Microsoft, and … Ford?

Last week was interesting. I spent most of it in Las Vegas at EMC World, which was as much about Dell as it was about EMC itself. There was a ceremonial handoff from Joe Tucci to Michael Dell to lead the new combined entity, but Jeremy Burton was perhaps even more in the spotlight as he outlined the vision. Much of this vision was about the balance between traditional data center environments and something he called “cloud-native” applications. Substituting “next-gen” for “cloud-native” might be more accurate, as this category included everything from PaaS to big data to containers to hybrid clouds. Hadoop, Cassandra, and MongoDB were cited as examples as cloud-native, which felt odd. Certainly they are cloud-friendly, but they’re by no means exclusively cloud-centric. See my last post on cloud big data for more thoughts on this topic. To read the complete article, CLICK ON AUTHOR’S...

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The EMC Elephant Stomps Dell World
Oct21

The EMC Elephant Stomps Dell World

AUSTIN, TEXAS: While EMC will enable Dell to join IT’s 800-pound-gorilla club, pretty much everybody at Dell World 2015 — especially a really pumped Michael Dell and his executive team — is talking about the proposed acquisition, and speculating on what it means for the companies involved, their customers and prospects, and their competitors. So now the gorilla can keep company with the elephant-in-the-room metaphor. The stomping began on October 12 when Michael Dell, MSD Partners and Silver Lake announced the proposed acquisition of EMC in a deal valued at $67 billion, dwarfing all other previous IT mergers and acquisitions. Michael said 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.’ “Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security,” he said in a prepared statement. His EMC counterpart, Joe Tucci, was equally optimistic about the new company’s prospects, and why the acquisition was necessary: “… the waves of change we now see in our industry are unprecedented and, to navigate this change, we must create a new company for a new era.” The combination of EMC and Dell will create an $80-billion company, said Michael at a press event on Tuesday. For its most recent quarter EMC reported consolidated revenue of $6.07 billion, with VMware contributing $1.59B, and Pivotal a meager $64 million. That would put Dell’s share at $56 billion, which is in keeping with the best guesstimates for the private company. “Go big or go home, baby,” said Michael, talking about how EMC addresses the issue of a privately held company making aggressive acquisitions. However, from a financial perspective, the acquisition is expected to add more than $40B — as part of the $50B-plus EMC will cost — to the $12B still outstanding from the $25B it cost to take Dell private. “Dell and EMC are a dream combination,” he said. “We complement each other beautifully.” Combined, the two companies lead in 22 Gartner Magic Quadrants, said Michael. As an added bonus, EMC will now be private and out from under the 90-day financial proctology exam that is the norm for public companies. “As I like to say, EMC, $67 billion. Being master of your own destiny, priceless!” In an open letter, Michael shared his thoughts and intentions on VMware, basically committing to ‘continue to offer choice and multiple partner offerings as we always have and always will.’ VMware will remain an independent public company, and there are...

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