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Why Dell+EMC make sense

If you were at the EMC World in Las Vegas earlier this year, you couldn't have missed the keywords: modern data centre, innovation, year of flash, storage cloud.

twitter-logo Goutam Das   New Delhi     Last Updated: September 8, 2016  | 12:22 IST
Why Dell+EMC make sense

If you were at the EMC World in Las Vegas earlier this year, you couldn't have missed the keywords: modern data centre, innovation, year of flash, storage cloud. You couldn't have missed some of the catch phrases either: "The digital revolution will dwarf the industrial revolution" or that "Data is the new diamond". Michael Dell, Chairman and CEO of Dell Technologies, said that gathering information from connected devices for better insights is the challenge. And an opportunity.

He seeks to leverage that opportunity by orchestrating the formation of the "world's largest privately controlled tech company". Dell and storage solutions company EMC merged, to "create a $74-billion market leader with an expansive technology portfolio that solves complex problems for customers in the industry's fast-growing areas of hybrid cloud, software-defined data centre, converged infrastructure, platform-as-a-service, data analytics, mobility and cyber security". Dell Technologies on Wednesday said the acquisition was complete.

Technology companies have always sought newer engines of growth. In most cases, it was achieved through acquisitions. EMC itself was an acquisitive company - if you go back 12 years, EMC transformed from being a single platform company to a firm with a 'family'. It transitioned from being a hardware-centric company to a complete information management company, which offered both software and services. In fact, EMC, by 2005, was one of the world's largest software companies! The talk, then, was also about reducing complexities for the customer. A large hardware+software+services company would take away the headache of negotiating with multiple vendors as also of integration. That logic hasn't changed now; only the circumstances have. Dell's acquisition of EMC is easy to understand through this prism.

While much of the past decade was about the implementation of package software, when it came to information technology, the next 15 could be about transforming enterprises digitally. Chief Information Officers (CIOs) are tasked to help their companies transition from legacy applications to consumer-grade mobile apps. As the trend towards the Internet of Things accelerates, more and more devices will get connected. Gathering information from these devices and analysing them will be the key to both top line and bottom-line performance for every enterprise.

This scenario also implies a greater degree of complexity in tech architectures. A converged infrastructure may make more sense - Dell and EMC combined can offer that converged infrastructure of compute, storage, networking and applications. Global customers also need efficient supply chains. Being able to deal with fewer vendors is always useful. The new scale of Dell Technologies fits into this scheme.

There is, of course, the question of customer lock-in when dealing with a single large vendor. Executives at EMC World had a ready answer whenever it came up: "A single vendor can be much more honest and strategic."

 

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