Dell Inc. has agreed to the largest acquisition ever in the technology industry, sending $67 billion in cash and stock to data storage giant EMC Corp., but what does it mean for AV and IT systems integrators?
If nothing else, the deal represents another giant leap into the IT space for Dell and could bail EMC out of some of the struggles it’s encountered in dealing with increasing competition in the space it once dominated, seemingly alone.
It also created a one-stop shop of sorts for large clients looking to upgrade their computing and storage needs without shopping around to find companies on both fronts. More and more today, business owners are looking for the so-called “one throat to choke” approach to solving their problems, meaning they want to get everything from a single vendor whenever possible.
Dell’s addition of EMC’s storage capabilities certainly provides that, but could also trigger layoffs as Dell tries to offset the debt it encumbers in the headline-grabbing acquisition. EMC has more than 70,000 employees worldwide. The combined statement says Dell will focus on reducing its debt in the first 18 to 24 months after the deal’s completion.
Those who’ve been paying attention also know Synnex recently began selling Dell Federal products to its customers, the first time integrators could get their hands on Dell products through the distribution channel. Typically, Dell sells its products directly to end users.
“I’m tremendously proud of everything we’ve built at EMC – from humble beginnings as a Boston-based startup to a global, world-class technology company with an unyielding dedication to our customers,” said longtime EMC chief executive Joe Tucci in a statement on Monday announcing the deal. “But the waves of change we now see in our industry are unprecedented and, to navigate this change, we must create a new company for a new era.” Tucci has announced plans to retire.
Following completion of the transaction, Dell founder Michael S. Dell will lead the combined company as chairman and chief executive officer, according to the statement. Dell’s headquarters will remain in Round Rock, Texas, and the headquarters of the combined enterprise systems business will be in Hopkinton, Mass.
The combined company “would be a potent rival to HP and International Business Machines Corp. (IBM)” in the computers and software space, giving integrators another option to consider in their largest deployments.
So, how does the prospect of a Dell-EMC partnership affect your company? Is it a deal you think is good for the systems integration business or one that could threaten some of the smaller integrators who don’t have the name recognition or financial muscle to compete with this duo?