Dell EMC integration would be 'tits up' by now if Dell were public - analyst

Early-days integration process impresses analysts who attended Dell EMC World

Dell EMC's integration process has been praised by analysts, who suggest that if Dell were still a public company, it could have been a different story.

The firm held its first partner and customer conference in Austin last week, at which company executives talked up the opportunity for the combined company and gave attendees a glimpse into the company's future plans.

Clive Longbottom (pictured), founder of analyst Quocirca, told CRN that the main thing that struck him at the event was "how remarkably smoothly the merger seems to be going".

He added that had Dell not gone private in 2013, it may not have been the case.

"If Dell had still been a public company, then the pressures of the 12-week horizon would have forced corners to be cut and it would be going tits up by now," he said.

"With Michael having taken Dell private, it removes that. He can sit down and unpick things. [It allowed him to] work with Joe Tucci and say 'look I know you didn't want any hostile acquisition of the whole Federation, so let's unpick it and make it that nothing can come back and bite anybody further down the line'.

"With that luxury, what we saw was a case of [their having] had the time to sort out all the technical issues around finance and so on, and the cultural issues. It was very much a case that you're not going to see massive arguments going on around Dell EMC like 'our storage is better than your storage'.

"It seems to have worked out quite nicely. It was my biggest worry - there are a lot of power bases within EMC and it was a very pleasant surprise that they've buckled down and done a pretty decent job of getting it all together."

Keith Humphreys, managing consultant at EuroLAN, agreed and said: "I was so impressed with how they integrated the two companies. [It is] only on a shallow level, but they spoke as one and they were all on message. Even the egos of the different execs didn't get in the way, which is amazing to me."

"It was my biggest worry - there are a lot of power bases within EMC and it was a very pleasant surprise that they've buckled down and done a pretty decent job of getting it all together"

Tony Lock, distinguished analyst at Freeform Dynamics, said breaking free of Wall Street pressures has served Dell well.

"I've got to admit that I really hate the way Wall Street and markets in many of the western countries force so much attention on this quarter's returns, rather than letting people plan for the long term," he said.

"From that point of view, relieving the 90-day pressure, vendors look much more strategically. I favour this a lot, purely from a philosophical point of view - never mind that it is practical and actually helps the business. Has that eased the pressure on the integration? Quite possibly."

Head to head with HP

The rivalry between Dell and the two firms formed out of HP - HP and HPE - has ratcheted up a notch over the last couple of months. At the latter two's partner conference in Boston last month, Dell hired performers to dance with giant Dell-EMC-branded balloons outside the venue. During the conference, HP and HPE executives took various swipes at Dell, claiming the EMC merger means it is distracted and has a lot of debt. At Dell EMC World, some executives rubbished such claims and boasted its number one position in a number of key markets.

HP split in two last year, hoping the move would make it more agile and better able to attack its target markets - printers and PCs for HP, and the enterprise for HPE. At the same time as HP completed its legal split, Dell announced plans to do the opposite of its rival, and to get even bigger by swallowing EMC.

Quocirca's Longbottom believes that when the two strategies are compared, Dell EMC's wins.

"At the moment my money is on Dell doing well in the short to medium term. God knows once we get beyond five years out."

"HP tried being everything to everybody and, due to all sorts of issues, found that was impossible and so had to split the company," he said. "IBM tried to be everything to everybody and made quite a good fist of it, but still decided it needed to change its whole approach and be a cloud-first company. Now you look at Dell and say 'who are you competing against'? There isn't really another company like Dell left out there. Out of the big three, two have decided to go a different way.

"At the moment, Dell is still in the best position. There are still lots of companies out there that want to buy their own kit and put it into their own datacentre. There is a still a move to co-lo, where they need to buy their own kit. At the moment my money is on Dell doing well in the short to medium term. God knows once we get beyond five years out. HP I still see as a basket case with a lot of things to sort out."

He explained that he doesn't believe HP split up in the right way.

"If you take something like print - print is not in the HP Inc side, in with PCs and all the consumer stuff," he said. "That's fine when you look at a HP Inkjet printer. But when you start to look at the massive production-line printers, 3D print, managed print services - which need the enterprise professional services group - it's a strange split."

EuroLAN's Humphreys said the fierce rivalry between the two is not necessarily productive.

"They've got partners that overlap and sell both sets of products, so it doesn't really do them any favours," he said. "Why give oxygen to people by even mentioning them? The best way is to ignore them."