Michael Dell claims 'customers want fewer vendor partners'

Man behind industry's biggest ever merger insists customers want fewer vendors. Is he right?

Michael Dell has ramped up his consolidation evangelist act by insisting that customers want fewer vendor partners.

The corporate enterprise which Dell founded in the 80s has evolved in recent years to include the likes of EMC, VMware, RSA, Pivotal Software, SecureWorks and Boomi. A move Dell insists is matched by customer appetite.

"One of the things that we've seen in the combination [of the businesses] is this idea that customers actually don't want to have more partners - they want fewer [vendor] partners," Dell said in an interview with Bloomberg Television at the VMworld conference in Las Vegas.

"We've seen really a fabulous response - revenue synergies greater than we thought, coming faster than we thought. Dell, EMC, VMware go together like peanut butter and chocolate," he said.

Colin Brown, managing director of reseller Softcat, said that in an ideal world customers would like to consolidate and reduce the number of vendors they work with.

"There are benefits in terms of admin and resource management, aggregated spending power if fewer companies are getting slices of the pie and, in theory, better technology integration," he said.

"Equally, I don't think customers are willing to compromise on critical components of their infrastructure - security is a great example - just to achieve the goal of having fewer supplier relationships."

Analyst Quocirca's founder Clive Longbottom said there has always been a drive towards homogeneity, but eventually customers realise that their prime supplier does not do everything, so they go elsewhere.

"As HP was splitting and IBM was divesting, Dell decided it wanted to become the next HP or IBM. In fairness, Dell has done a good job with the EMC merger; I was expecting more problems than they actually came up against," he said.

Longbottom added that end users are still going to lots of different companies for products, even if they are owned by Dell ultimately.

"The likes of VMware, RSA and Pivotal Software all come under the Dell Technologies banner but customers are still not getting one single contract.

"So [Michael Dell] is being moderately economic with the reality. He's not lying, but these companies are still operating as nominally separate entities. It is true that Dell EMC does offer a lot of capabilities now," added Longbottom.