The new Dell Technologies: 6 things you need to know
- 08 September, 2016 02:38
Dell and EMC have completed their US$67 billion merger to create Dell Technologies, the world's largest privately held technology company. It's a historic day, far from the PC company that sponsored the "Dude, I've bought a Dell" campaign.
The new company will sell PCs, servers, storage, networking and software products. It has an impressive list of assets including Dell's PC and servers, EMC storage, VMWare, RSA, Wyse, Force10, and the Pivotal software and Boomi cloud services.
Work has started for the autonomous units to work in unison, but there are also new priorities for the company. Here's what you need to know.
Dell Technologies is thinking like Alphabet/Google
Dell Technologies will be a mix of independent units tethered to each other. That's similar to Alphabet, which has a bunch of independent units led by Google working closely with each other. The Dell Technologies units will continue to function independently, but also work together to offer integrated products like hyperconverged systems that mix Dell's servers, EMC's storage, VMWare virtualization, and private-public cloud assets.
Being attached to other units will push the company's growth into high gear, said Jeremy Burton, chief marketing officer at Dell. Independent units will be able to innovate and grow organically, but will report to mothership Dell Technologies.
Overlapping products are not in immediate danger
The Dell-EMC merger made sense because the assets were compatible, particularly Dell servers, EMC's storage arrays and VMware virtualization assets. Before the merger was completed, Dell made space for EMC's assets by agreeing to shed its software business for $2 billion to equity firms Francisco Partners and Elliott Management. It also sold its IT services businesses for $3 billion to NTT Data.
There are still some overlapping cloud, security, and storage products, but Dell Technologies won't kill them off immediately. Over time, the company will make decisions about merging assets or discontinuing products. But for now, Dell executives wanted to reassure existing customers the company was keeping all products.
There will be no changes to the PC business
There will be no changes in the PC business, Dell says. Driver development won't change, and customers will get the same level of support. The company will continue to offer XPS, Alienware, and Inspiron PCs, and it will explore new areas of growth. In fact, Dell plans to show groundbreaking products at CES early next year, and displays will be a big area of focus for Dell Technologies, Burton said. Virtual reality and augmented reality are also a big part of the company's future.
All-flash arrays and rack-scale infrastructure are priorities
All-flash storage is huge and growing at a rate of 100 percent a year, so it will be a big area of focus for Dell Technologies, Burton said. Another long-term focus will be on rack-scale computing and infrastructure, which will change server structures and bring more processing speed to data centers.
The company will break up traditional server components like storage, processing, and memory into discrete boxes, and they will be networked with super-speedy interconnects. The goal is to make a data center configured like one giant server, and the rack-scale structure will help reduce power bills and cut inefficiencies in processing and data movement. Dell already offers servers for rack-scale infrastructures.
The VMware virtualization tools are a particularly strong asset to achieve that goal. Distributed computing is important in rack-scale architecture, and Dell Technologies will put VMware and other virtualization and provisioning assets on top of Hadoop and OpenStack infrastructure. Hewlett Packard Enterprise and Lenovo can put VMware on their servers, but Dell will offer deeper integration.
EMC product users won't be shortchanged
Existing Dell Technologies assets like VMware and Pivotal are used in servers from several vendors, and that won't change. VMware products figure to have higher levels of integration in Dell servers, but customers with a preference for non-Dell servers will still be able to buy EMC products and support. HPE and Lenovo are notable partners with VMware, but it's not clear if the partnerships will remain in place.
Dell Technologies won't be a slave to Wall Street whims
Dell went private in 2013 to stay away from the bright lights of Wall Street, where shareholders demanded immediate results, which the company says stifled innovation. In that vein, remaining private will help Dell Technologies to chase long-term goals.
"We don't have to cater to short-term thinking that exists in the market. We can think to decades," Burton said.