Reading the EMC tea leaves at Dell World

While everyone at World this year wants to know all about the upcoming integration with , there are significant limitations on what the company can say at this point. That being said, here’s an interpretation of what they are willing to put on the record.

Michael Dell 300

Dell CEO

AUSTIN – Dell World this year has been upstaged. At this year’s event here, every new announcement and every scheduled event pales in comparison to the announcement of LAST week’s Dell announcement. Nor am I referring to Dell’s expanded partnership with CDW, as interesting as that may be for a channel audience. The elephant in the room of course is the announcement of Dell’s acquisition of EMC, barring the unlikely event that HP, Lenovo or some other OEM with more than $67 billion burning a hole in their pocket decides to take up the gauntlet and exercise the clause in the deal to offer a better price for EMC.

The problem though is this: while EVERYBODY wants to know more about the plans for EMC, particularly around storage and security, where the companies have many competing as well as complementary products, there is a very, very limited amount that Dell can say at this stage, when the acquisition has not even closed. The remarks senior Dell execs have made so far at the event about the deal, most notably by Michael Dell himself, provide a highly incomplete and subjective assessment of Dell’s plans. So with those caveats in place, what have we learned?

Dell has been willing to say more about the deal than most of us expected

Given that the deal hasn’t closed, the expectation was that Michael Dell would greet every question about future joint Dell-EMC plans with a more congenial imitation of New England Patriot coach Bill Belicheck’s trenchant media scrums, with ‘We aren’t able to comment on that right now’ in lieu of ‘We’re on to Cincinnati.’”

Dell DID give this kind of answer to one specific question, but for the most part he and his team tried to give answers rather than ‘no comments.’

Dell does not see doubling down on hardware at a time of increased momentum as a weakness

“This is a scale business,” Dell said. “We think that scale is important. Customers want more end-to-end solutions. When you look at this industry, the companies that have succeeded in the volume space have been attached to large PC client businesses and the volumes really matter. And at the moment that there has been an explosion in the number of devices, customers don’t want more suppliers, they want fewer suppliers. In the executive summit here, the CEOs have said ‘this is great, you are making our jobs a whole lot easier.’

Strength in the old technology is critical to strength in the new

This should come as no surprise. It has been Dell’s position in storage for quite some time, with the company pursuing both traditional disk-based and software-defined strategies, while emphasizing the connections between them.

“CIOs today are trying to fund the digital transformation by reducing cost in the current infrastructure,” Dell said. “There’s also this move to virtualization and hyperconverged systems where the siloes that had been built in the second platform of IT are starting to go away, and it’s important to lead in that next wave. The combination of Dell and EMC give us a strong position not only in the existing technologies, but in the new technologies. Companies that are able to do that will be successful, and the others will go out of business.”

The addition of so much new hardware capacity will make software even more important

Responding to a question about the place of software in the merged company, , Dell’s president of software, emphasized the connection.

“As the private cloud becomes an offering on top of converged infrastructure software, measuring and securing them becomes important, and the combination of Dell and VMware makes that much stronger,” he said. “To get that efficiency out of converged infrastructure hardware, you need to surround yourself with software.”

The ’s impact is overstated in the media, and the deal strengthens Dell in the hybrid cloud, which is much more important

Asked if the deal effectively helped position Dell as a cloud service provider, Dell clearly didn’t think the strategy worth following.

“We see about 160 million workloads in the world today, and maybe 10-15 million are in the public cloud and maybe 30 million are non-virtualized on-prem workloads,” Dell said. ”When I hear people say everything is going to the public cloud, this sounds like ‘the pc is dead’ from a couple years ago, and I don’t think that’s what’s happening. You will have SaaS, public cloud and private clouds. I see plenty of opportunities for you and us to attack that hybrid cloud opportunity. VMware is very well positioned for that. The Dell-EMC combo is. is.”

The EMC federation’s many businesses won’t encourage Dell to dabble in any areas where they are less than comfortable

The newly announced decision to spin off Virtustream, which EMC acquired this spring to become the foundation of their managed cloud services business, and was to become another component of the federation, reflects this. It will become part of VMware. , Dell’s president of enterprise solutions, explained the logic, tying it to Dell’s overall cloud position.

“Most cloud providers and web tech providers today are our customers,” Haas said. “Our philosophy has been that we would rather enable our customers than compete with our customers.”

While Dell would not address rumors of a Dell -EMC security spinoff, he did emphasize the security business’s importance going forward

This was the one question that Dell flatly ducked, and that was no surprise. He did, however, suggest that these businesses may have a long-term future in Dell.

“I think that these are both great businesses,” he said. “They are a little bit different. RSA is more product. SecureWorks is more services. We also have SonicWall and Quest and the DDP suite. The combined company has awesome security capabilities. And don’t forget about {EMC] AirWatch. The security challenge is not getting easier. When we speak with customers, it’s a super-high priority.”

The strategic alliances Dell has established through its software strategy won’t be impacted by the acquisition

The fate of Dell’s strong partnership with was the issue here, given its direct competition with EMC’s VCE. Dell, has, however, managed relationships with many vendor partners who compete with each other as part of its existing software strategy, and Michael Dell indicated that won’t change.

“We plan to continue to support and enhance all the product lines we have, and will be announcing on Wednesday an all-flash version of the XC630,” Dell said. “We have a great relationship with Nutanix. We expect to continue to work with Nutanix.

“We have no intention of screwing up the VCE business, in case any of you were wondering about that,” Dell added.

The joint channel go-to-market strategy has not yet been determined, but Michael Dell gave the impression there won’t be big changes from the current Dell policy.

Asked if EMC’s recent decision to reduce the number of distributors in its channel strategy [which directly contradicts what Dell has been doing itself] would be reflected in the new company, Dell did not make a firm statement, but suggested major changes aren’t likely.

“We have a distribution-friendly strategy,” he said. “We don’t intend to change that. I don’t know enough about the decisions EMC has made there. We will get into all that when we plan the integration strategy, but our policy of being distribution-friendly is not changing.”

That integration strategy is well underway. Dell COO and President Worldwide Commercial Sales head Rory Read has been detached from that position and appointed as Chief Integration Officer at Dell. Howard Elias, EMC’s COO, is handling the task from EMC’s end.

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