Effects of Giant EMC-Dell Merger May Be Minimal

Alan Earls headshot 130pxThere are plenty of superlatives being tossed around relative to the recently announced tech merger of EMC and Dell, so let’s skip those and move to some substantive things.

First of all, it is interesting that while both companies are close in age (EMC started in 1979, Dell in 1984), they are effectively generations apart in their culture. EMC began offering add-ons to proprietary minicomputers manufactured in the Boston area by the likes of Digital Equipment Corporation and always had a strong orientation toward bigger systems and bigger customers. Dell famously began in a University of Texas dorm room in the fevered years of the “IBM Clone,” an era when premium engineering and innovation mattered less than speed of execution, good marketing, and cost control. And, over the years, EMC has gone on to fill a huge niche in the storage world and beyond, but also acquired the people and some of the outlook associated with the minicomputer industry (including a whole storage project line from Data General).  In short, EMC is generally seen as a bigger and more bureaucratic company than Dell. With that, though, it is also a company with customers and lots of loyalty in the large enterprise space, where Dell has struggled to gain a foothold.

Over time, EMC did manage to grow somewhat more nimble, made some great innovations on its own, and even presciently invested in VMware.  But it has always been sneered at by its West Coast competitor, NetApp, among others. It’s current “federated structure,” with its high level of business unit autonomy, has also attracted plenty of doubters.

Thus, it is hard to imagine that Dell won’t substantially alter the corporate culture at its Massachusetts subsidiary – which will probably mean cost cutting and job losses at some point.  However, Computerworld sees a generally complementary product line for the combined company.

Interestingly, a recent study by 451 Research, based on a survey of customers of each company, showed deep differences in perception. EMC customers see themselves being thrown to the wolves and imagine Dell to be still largely a PC company, rather than the more diversified IT vendor than it is.

In fact, it is a bit reminiscent of Compaq’s 1998 acquisition of Digital Equipment Corporation, which fostered similar concerns that were not entirely unfounded.

Taking a long view, it seems like this is a symptom of the continued drift toward a more standard, more virtual, more cloud-based world. However, Industrial Internet of Things (IIoT) practitioners may not notice much of a difference, unless they also specify and run major IT infrastructure components.

In fact, neither company is all that active in IIoT areas, though Dell offers “edge analytics” through an IoT Gateway – as well as hosting an IoT Lab program, in conjunction with Intel, at locations in Santa Clara, CA and Limerick, Ireland.  EMC, for its part, has published a variety of thought leadership pieces and recently announced an IoT Partnership with Vodaphone as part of its participation in an Industrial Internet Consortium testbed.

Ultimately, what will matter is whether the acquisition is successful from a business standpoint. That will depend in part on the two companies but also on the state of the global economy.

 


Alan R. Earls is a Boston-based writer focused on technology, business, and manufacturing — a field where he spent the earliest part of his career. He has written for publications and websites as diverse as The Boston GlobeComputerworld and Modern Infrastructure as well as Industry, The Manufacturer, and Today's Machining World and is a regular contributor to the Smart Industry Connect blog.