Sixth mega-vendor emerges as Dell/EMC deal rocks enterprise boat
- 16 October, 2015 06:12
Michael Dell - Chairman and CEO, Dell
The proposed acquisition of EMC by Dell and Silver Lake Partners creates a genuine mega-vendor that will join the industry heavyweights HP, IBM, Microsoft, Oracle, and SAP.
Both companies have individually been prospective candidates for this supergroup, but the combined entity has the breadth of products and services, and the scale, to compete for a strategic share of the enterprise wallet.
“A key question for those enterprises, however,” asks Tim Jennings, Research Analyst, Ovum. “Is whether the enlarged company will end up looking like a legacy dinosaur or a powerful enabler of digital transformation.”
Ovum defines a mega-vendor as a technology provider with a range of solutions encompassing software, services, hardware, and ecosystem that makes it a strategic provider to a significant proportion of the enterprise market.
“Dell / EMC certainly fits this profile, with both companies having made multiple acquisitions over recent years to extend their propositions beyond their core hardware background,” Jennings adds.
“Even leaving aside the huge success story of VMware, a portfolio that includes assets such as Perot Systems, Quest Software, Boomi, Compellent, SecureWorks, RSA, Documentum, and Pivotal underlines that diversification.”
But for Jennings, the new company will “have its work cut out” to combine these assets into solutions and partnerships that fit the changing role of IT in a digital world.
“As others in the mega-vendor group have found in recent years, scale does not guarantee success, and we have seen patchy financial results, separations, and structural change as these companies have navigated the transition to the cloud and tackled new competitors such as Amazon Web Services and Google,” Jennings adds.
“For Dell/EMC, although consistently rising demand for storage can fuel growth for a while, over-reliance on its core assets will lead to stagnation, so some bold moves and investment in innovation will be required to avoid the mega-vendor pitfalls that have dogged others.”