Inside Advanced Scale Challenges|Sunday, June 25, 2017
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Merged Dell-EMC Targets Hybrid Cloud 

If bigger is better, the new IT behemoth Dell Technologies Inc. that combines the holdings of Dell and storage leader EMC Corp. fits the bill with the completion a $60 billion merger of cloud, storage, virtualization and hardware components that will seek to be all things to all enterprise IT customers.

"We think scale matters," Michael Dell asserted Wednesday (Sept. 7) in unveiling the new Dell Technologies that incorporates EMC, VMware and other former EMC and Dell units. A tracking stock for VMware (NYSE: VMW) began trading on Sept. 7, the company said during a call with analysts. (It was trading lower at midday.)

Brushing aside concerns about product overlap, Michael Dell said the new privately held company with $74 billion in revenues represents nothing less than the largest enterprise systems company in the world. The mega-merger, announced last October and estimated to be the largest in history, combines the hardware, cloud, virtualization, security and application development assets of Dell and EMC Corp.

The new company also underscores a shift toward IT industry consolidation as leading players in servers like Dell and storage leaders such as EMC search for synergies to meet enterprise demand for hybrid cloud and cloud native offerings.

Dell Technologies will at least initially employ 140,000 workers, making it the largest privately controlled technology in company "in numbers," according to Tom Sweet, Dell Technologies' CFO.

Emphasizing a hybrid cloud and cloud native application strategy, Michael Dell said the core Dell-EMC infrastructure solutions unit that includes the former Dell server hardware and EMC storage businesses would operate from "the edge to the core to the cloud." Meanwhile, other units combined in the merger—including VMware, Virtustream, application developer Pivotal and security units RSA and SecureWorks—would operate under the own names and "can develop their own ecosystems," Dell said.

The new IT behemoth is betting that its leading rankings in storage, converged platforms and cloud infrastructure position Dell Technologies to compete head-on with the likes of IBM (NYSE: IBM) and Hewlett-Packard Enterprise (NYSE: HPE) as the phrase "digital transformation" transitions from a marketing buzz phrase to reality. Dell and others are targeting enterprise customers searching for new ways to cope with growing data volumes while scaling the delivery of distributed business applications.

Dell Technologies and its rivals also are betting that converged hybrid cloud platforms running cloud native applications represent the future of enterprise IT. Hence, David Goulden, president of the new Dell EMC Infrastructure Solutions Group, said the new unit would likely extend partnerships with public cloud providers as it launches the combined cloud IT infrastructure unit.

Meanwhile, VMware will maintain its cloud partner network that supplies virtualization software to cloud customers, and Dell said there no current plans exist to merge parts of its Virtustream unit with VMware.

In that vein, Michael Dell plugged the new company's Pivotal cloud-native application developer unit operating on the Cloud Foundry platform-as-a-service. A cloud instance is as much about how as where it occurs, the company chairman and CEO stressed.

Dell's merger with EMC also underscores the fluid nature of a storage sector as next-generation technologies like all-flash arrays along with object and scale-out storage platforms make inroads in enterprise datacenters. EMC competitors such a scale-out network-attached storage specialist Qumulo Inc. emphasized market unease over the merger, including possible product overlap.

Dell Technologies' Sweet dismissed those concerns, saying for now the merged company would continue to support all product families while considering its options down the line.

About the author: George Leopold

George Leopold has written about science and technology for more than 25 years, focusing on electronics and aerospace technology. He previously served as Executive Editor for Electronic Engineering Times.

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