Many details still have not yet been determined, or cannot be made public, but at EMC World, Dell and EMC indicated some additional information about what the massive new organization would look like, and be called, once the merger is complete.
LAS VEGAS – At EMC World here, more details were announced on how the Dell-EMC integration is progressing, in the run-up to the expected finalization of the deal in the fall. This includes the name – and sub-names – of the new entity, as well as some more tidbits about how things will be organized after the deal closes, and some the decisions that have been made about harmonization.
First, the name. In the opening keynote, Dell CEO Michael Dell – professing a familial attachment to the Dell name – indicated it would have pride of place in the merged entity.
While much earlier in the integration process, Dell appeared to suggest that the EMC name might disappear, that won’t be the case. The sub-brand for the new enterprise unit will be Dell-EMC, while the sub-brand for the company’s client services business for both consumers and business will remain Dell.
David Goulden, the Chief Executive Officer of EMC Information Infrastructure, which includes RSA and Virtustream as well as EMC’s core data centre businesses, indicated that the current EMC Federation brands will remain, although not all will have the same status. The RSA, Virtustream and VCE brands will remain as organizations and brands within Dell-EMC, while other companies like VMware and Pivotal –as well as Dell SecureWorks – retain their full existing identities and structure.
Michael Dell stressed that no changes were contemplated to the status of Pivotal in particular.
“I’m still learning about Pivotal,” he said. “The growth rate and customer excitement around it are phenomenal, and the last thing I want to do is upset that. I want to treat this very special asset with tremendous care.”
Michael Dell also clarified that Dell’s Compellent brand won’t be disappearing into the larger maw of EMC storage.
“The one area where you have some overlap between the companies is in storage, where EMC is a giant – and Dell is not a giant,” he said. “However Dell Compellent is more of a server-attached offering which plays lower in the market, and EMC Unity is middle market and up. So we decided to keep them both.” Dell indicated that he doesn’t consider any other product areas of the companies to overlap.
Rory Read, Chief Integration Officer at Dell, and Howard Elias, EMC’s President and COO, Global Enterprise Services, have been leading the integration efforts for Dell and EMC respectively. They stressed that the integration remains precisely on schedule to close in the fall, although some details, like the number and location of layoffs, are not yet ready to be made public.
“One reason this is going so smoothly is that there is very little overlap,” Read said. “The overlap in the top 5000 customers of the two companies you would think would be substantial, but it’s not that large. This opens up great synergies for upsell and cross sell.”
“When Dell resold EMC [in the mid-part of the last decade] it was a two billion dollar business, and we were half the size we are now,” Goulden said. “And that was a one-way sell and not a two-way sell.”
The debt financing for the deal has been secured, and is ready to go. Only one regulatory approval remains, and that’s in China. Once that’s done, the close date can be set in fairly short order.
China remains something of a wild card. They have dragged their feet on some regulatory approvals in the past, for whatever reason. Read stressed however, that they aren’t concerned China could upset the apple cart and force the two companies to remain separate for longer than desired.
“All regulatory approvals so far have gone very smoothly,” he said. “China – you can’t know until its complete – but the early stages there have all been tracking to expectations. We don’t anticipate any major issues there at all.”
Read also indicated that the synchronicity between the two companies’ operations had been a factor in the ease of regulatory approvals to date.
“The actual collisions or overlaps are quite minor,” he said. “That’s why the regulatory approvals have gone quite well.”
While Read and Elias were eager to emphasize that the cost synergies of the merger in areas like procurement and supply chain efficiencies would be a plus to the company, they acknowledged there would be some layoffs, but indicated they are not yet at a point where they can give specifics on that.
“There will be some impact to headcount, and we are working on that,” Elias said. “We will be able to talk about that at close or shortly thereafter.”