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Dell EMC merger

The Dell and EMC Merger: What Happens Next?

by Maggie Getova

Last month Dell announced that they will acquire EMC for $67 billion – making it the biggest tech deal in history. Now that the impact has settled in, speculations have started about how the merger will affect both companies, the products they offer, and their customers.

Dell to Sell Off $10 Billion in Assets

Dell recently announced that they would be selling off $10 billion worth of assets to help alleviate some of their acquisition debt. Since both Dell and EMC are involved with everything from security, to the cloud, to virtualization, the products that overlap is where the biggest changes will occur.

Rumors have been flying around that non-core products which could be sold off include Quest Software (used for IT management), SonicWall (e-mail encryption) and Perot Systems (IT services).And most interestingly for us and a lot of users, a number of Dell’s backup and recovery services are also coming into question.

Data Protection Decisions

Dell’s AppAssure (aka Rapid Recovery software) is rumored to be one of the assets that will be sold off, since it directly competes with EMC’s Avamar. Dell’s backup appliances also may no longer be supported. In addition, decisions need to be made on keeping vRanger (VMware and Hyper-V backup), RecoverPoint (application recovery), VPlex (virtual storage) and other data protection software.

How will these changes affect the customers who currently use these products? The outlook might not be great, especially at first. It’s highly likely that users will seek out similar backup and DR solutions from smaller competitors who offer the same services for the same or lower price tag. Dell may struggle to keep its EMC enterprise customers, and channel partners are also likely to be negatively impacted. Dell won’t be able to work out all of these changes overnight, so a loss of customers throughout this merger is inevitable.

VMware and More Cloudy Questions

You can’t talk about the Dell and EMC merger without bringing up VMware. EMC owns 81% of VMware’s shares, so they are another big piece of the acquisition puzzle. In fact, the three companies will merge their cloud components into a single entity called Virtustream.

Much like the various product questions, deciding how to integrate cloud technologies from each company will be a challenge. Cloud partnerships also add even more complexity. VMware has the vCloud Air public cloud, while Dell has had a longstanding partnership with Microsoft Azure cloud services. The direction Virtustream decides to go in with their cloud services will impact a number of Dell’s current cloud services, including data protection, as well as the many customers who use them.

With all of these massive and complex moving pieces, it’s tempting to wonder – why bother?  It’s no secret that the personal computer market hasn’t exactly been a big money maker for Dell lately. By buying the world’s biggest storage company, Dell’s goal is to become a bigger (if not the biggest) player in the enterprise storage space. Enhancing their cloud computing and virtualization capabilities is also part of their strategy. So while we don’t know exactly what’s happening with each product and service, we do know decisions will more than likely made in favor of enterprise storage solutions and SMBs rather than the everyday consumer.

It will be interesting to see what kind of domino effect we could witness after the merger closes in 2016. We may not have all the answers right now, but in a few years we will be able to tell whether this was the greatest idea in tech history or a challenger for absolute worst  – and who knows, we may even learn a lesson or two.

Maggie Getova
Maggie G

Maggie is a content writer at Zetta. She writes for the blog and manages social media.