Dell is merging with EMC – how does this affect you?
As of October 12 2015, Dell announced it would be merging with EMC. The Dell-EMC merger has been named the biggest technology merger in history with a price tag set at $67 billion. With such a large deal at hand, we must assume that some changes will be made as the companies form this new epic technology conglomerate.
There are many questions to be answered, and CentricsIT is here to try and bridge some of those gaps.
What will be the name of the company after the merge?
Earlier this month, while speaking at the EMC World in Las Vegas, Dell CEO Michael Dell revealed that the new name will be Dell Technologies.
How long should I expect for the transition to take?
The announcement was made on October 12, 2015. The deal is expected to close by the end of October 2016, pending approval from Chinese regulatory and a vote by EMC shareholders, which is expected to take place in July of 2016.
What should I expect in the meantime for my business?
During the process of the merger, business should remain the same until the projected completion of the merger in October.
How will the merger affect the product lines of the companies?
With Dell serving as a mid-market consumer-focused tech provider, and EMC focusing more on larger enterprise customers, the only significant product overlap is within the companies’ storage product lines. With that in mind, we may see some trimming in the storage lines of both companies.
Furthermore, leading up to the EMC acquisition, Dell made a number of acquisitions, including security provider SonicWall, storage firm Compellent Technologies, networking firm Force10 Networks, IT management company Quest Software, and Perot Systems in 2009, which became Dell Services. Dell already sold Dell Services to NTT data and is expected to shed some of the other business units as well.
How will the Dell-EMC merger affect the services I am currently receiving from the companies?
Due to the merger, the resources of the individual companies will now be available to each other. For example, services offered by EMC will now have more access to the vast array of Dell parts facilities, enabling the company to fulfill service requests more efficiently. However, it is projected that the new company may experience layoffs and an overall decrease in total headcount, which could negatively affect overall service delivery. The uncertainty that comes with mergers and acquisitions is also known for putting pressure on employees and often causing key personnel to quit. That is a challenge that the newly combined company is likely to face.
What will that mean for my current EMC storage investments?
If your current investment is in flash or cloud-based storage, it is safe to say the company will continue to innovate in those areas. EMC executives say flash will dominate primary storage, and they want to maintain an advantage in that trend; meanwhile, Dell recently released its flash-focused Storage Center Operating System 7. The companies will continue focusing on storage transitions, such as moving from spinning disk toward flash storage, on-premise toward the cloud, and disparate systems toward converged architectures.
What products and services will not survive the merger?
It is not certain what products and services will or will not survive the merger. Dell has already sold its services business to NTT Data, and many expect Dell to sell off its Quest Software and SonicWall security groups as well. EMC’s Documentum document management platform is also an obvious candidate for removal because it has struggled as part of the storage giant.
What negative outcomes can I expect from the merger?
Dell is looking at significant debt margins in order to pay for EMC ($40 billion to be exact), and it is already sitting on top of existing debt from the Dell privatization process (around $12 billion). Interest rates for this much debt is estimated to be around $2.9 billion. We believe it is safe to say we may see some price increases from the company, as well as limiting sales discounts that may be available now. Another way Dell may try to cut spending is through cutting back on R&D, which will limit the company on advancement in the future. Its services pricing may also increase.
One of the most difficult parts of this merger is figuring out your place in the middle of the transition. CentricsIT is here to make a smoother transition for you, as the customer, by completely eliminating the manufacturer altogether. CentricsIT has a vast selection of Dell and EMC products at a fraction of the cost. We also provide services that eliminate the headache of dealing with OEM maintenance when something goes wrong with your equipment. We offer third-party support as a one-stop-shop for solutions through CentricsIT. Whatever needs you have concerning Dell and EMC products and services, CentricsIT has you covered through every step of the IT lifecycle.