Dell + EMC: What to Expect at EMC World

Next week is EMC World and it is a critical event for the Dell/EMC merger because—even though the merger isn’t settled—both EMC and Dell customers are understandably nervous about this change. Ironically, had this merger not occurred the changes to EMC would have been far more dramatic and I’m actually not expecting much impact on customers this year. But it will be both Dell and EMC’s job to put concerns to rest and this will be one of the big opportunities to do so.

Here is what I think you can expect.

Merger Of Peers

This isn’t a hostile takeover, nor is it one group of executives taking a ton of cash to retire early which often seems the case for mergers—particularly large ones. As a result, expect to see a lot of Dell observers in the audience. Dell World—which should come after the merger is settled—should have far more mixed content but because the merger isn’t settled there are limitations to how much collaboration between the two firms is allowed.

Many of the initial job changes at the executive level have already been announced. I doubt they’ll be able to go farther at this time; so other than a keynote discussion of status I doubt there’ll be a massive amount of joint presentations.

So far there are no indications of mass departures in advance of the closing of this deal, but there likely will be discussions surrounding some of the planned and public transitions of executives and responsibilities.

Dell vs. EMC

There isn’t a lot of product overlap between the two firms. Most of it occurs in storage where Dell is the weaker player, so the product line risk on the EMC side should be minimal and much of the product impact on the Dell side should be sorted by Dell World. In addition, existing announcements indicate that EMC’s sales channel will generally be favored so even if there were discussions on sales channel changes for EMC customers they should be minimal. Where Dell generally makes initial changes in an acquired company is in supply chain. Dell tends to be more efficient, but these changes—also in the future—should only impact EMC’s ability to deliver products in a timely fashion. Because Dell is so efficient, it should only improve delivery performance if it has any impact at all.

VCE

One of the interesting things to check in on will be VCE, which is now kind of a company in a company, and the center of EMC’s hyper-converged solution set. There has been a lot of speculation that Dell will shut this unit down, which seems rather strange. Michael Dell has praised this effort in the past, suggesting the source of those rumors is unreliable. I actually expect VCE to strengthen because Dell brings in some of the parts VCE lacked for end-to-end opportunities like clients. I’ll be interested to see if the VCE folks talk to this with Dell support to put to bed the belief that Dell is somehow going to disband this very successful operation. As a side not I did ask Michael Dell about this some time back and he asked me if I thought he was stupid as he’d never mess with a successful operation like VCE.

Keynote

Perhaps the part of this event to really watch closely will be the keynote because it should be a shared event where you can hear the blending of the visions for EMC and Dell. This will be far from easy because, as noted, the merger isn’t finalized yet. Much of the staffing and planning groundwork has been completed (I should point out that it is incredibly rare to have this much work done before the merger is complete). This means this will likely be unlike any other large merger you have seen where the initial years look more like Chinese Fire Drills. I’ve often been told that you can’t do advanced planning before a merger is complete, but I think that is because—in most cases—the companies and particularly the executives are not as committed to getting it done.

Taking us through the “why” of this should be both fascinating and historic. If you can’t be at the EMC World event, you should be able to live stream it next week here. I think we’ll see a piece of history.

Wrapping Up: Dell/EMC vs. HP/Compaq

The last mega merger I was involved with was HP/Compaq and the differences are stunning. For HP/Compaq both companies were in trouble, the HP founder’s families on the HP board were against the deal and started a proxy fight. Compaq in particular was a train wreck as a result of buying DEC and due to some CEO shenanigans. That merger was a founding element to why Carly Fiorina was fired and even though the two CEOs seemed to get along, they really didn’t, largely because HP’s board seemed to like Compaq’s CEO better (for good reason, he was better at ops and HP had an ops problem).

In contrast Dell/EMC is almost a love fest. Both firms are in good shape, Dell is even private (something EMC longs for to avoid the issues with corporate raiders and activist investors). The merger came out of an old friendship between the two CEOs, not a Hail Mary from one misguided board member as was the case with HP. And, unlike HP where the planning was forced by the proxy fight, Dell and EMC realized early on that there had to be a solid plan to get this done and just got it done.

If, like me, you were around during the HP/Compaq train wreck you’ll be very pleasantly surprised at what you see at EMC World this year.