The EMC World Keynote had a sort of sad start this year. Joe Tucci, EMC’s near legendary CEO, stood up and basically said goodbye. Michael Dell then spoke to the future of the market, opening with a discussion of how the world will change over the next decade, with virtually everything that can be connected becoming connected and becoming wrapped with artificial intelligence (AI). This is where Dell plans to take the new combined company, though the references are to Dell+EMC, not the new Dell.
Dell argued that the new company would be uniquely capable of taking customers more effectively to this new future than any other company, combining the individual elements of Dell, EMC, VMware, Pivotal, SecureWorks, RSA and VCE. (I’m suddenly struck by the fact that we have way too many new words to describe similar things when Dell basically speaks a paragraph of buzz words.)
Pivoting to security, Dell then listed the rather impressive list of security properties that, coupled with the other EMC properties, allow the company to lead in 21 Gartner Magic Quadrants. It is interesting that Dell is calling out Dell, EMC and VMC in particular, likely because these three units will largely remain intact.
Dell pivoted to customer focus, saying that a cultural survey, as they called it, of both companies ranked this as the number one focus of both firms. You know, culture is often one of the biggest problems to overcome in a merger, and this is the first time I’ve seen a major effort to understand the related problem before it gets in the way of execution. Yes, after a merger is started, there is a common ad-hoc focus on culture because it immediately becomes a problem; here, they are focusing on it up front. Ironically, the two firms’ cultures, according to the study, are actually very similar.
Birth of Dell Technologies
Dell announced what will be the new umbrella company; Dell Technologies will be the new parent company, replacing the EMC brand at the top. Under that will be two new units: Dell, a unit focused on client computing, and Dell EMC, which will combine the enterprise parts of both firms, essentially very similar to both IBM and HPe. This assures Dell’s vision that the future will be made up of solutions that connect the endpoints to centralized cloud services, whether on the firm’s premise or supplied by a cloud provider.
Dell is clearly not an HP fan. He compared Dell’s strategy of merging and growing to address the coming future he envisions to HPe’s plan to break the company up, making it unable to benefit from that same vision. He then went on to talk about how, even during the merger, Dell was able to grow share in the markets where HP lost share. Now, both companies are undergoing disruption, but this performance showcases Dell’s far more pragmatic approach to the changes, while HP seemed to just be doing what the financial members of the board wanted done. For instance, when you merge, you typically downsize because there are a lot of redundancies, so you need to eliminate the redundant staff. Conversely, when you separate, you need to hire more people, yet HP split and laid people off, which should badly damage both HPe’s and HP Inc.’s ability to execute. Dell has historically been far more pragmatic and measured, which is why the company was taken private to avoid foolish decisions like doing splits and layoffs at the same time. This speaks to why HPe is doing so poorly and Dell far better.
Wrapping Up: Pay Attention to the Details of a Merger
I’m increasingly struck with how very different the HP/Compaq merger and subsequent management are from the Dell/EMC attempt. I’m going to do a separate post more strongly comparing the two events, as I was intimate with both HP and Compaq during that merger and tightly tied to this one, as well. Overall, the handoff was elegant and well received, and the structure of the new firm well-articulated.
This should be an interesting ride.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+