As one heavyweight bulks up on the assets of a rival, a welterweight sheds its stock in pursuit of leanness.
Consequently, a defining week for the channel is emerging, as the warring Dell and Hewlett Packard Enterprise prepare to solidify respective go-to-market strategies.
In Dell’s case, its upcoming multi-billion dollar acquisition of EMC will be finalised on September 7, creating the world’s largest privately-controlled, integrated technology company in the process.
Meanwhile, speculation is intensifying that HPE is on the verge of selling its software division to private equity firm Thomas Bravo, in a move designed to allow the vendor to focus on its core offerings around servers, networking, storage, business critical systems and technology services.
Should both go through without interruption, the channel will be presented with an ultimatum based around two market leading vendors with very different visions for the future.
Michael Dell - CEO, Dell
In the blue corner…
As one analyst put it, Dell’s planned purchase of EMC makes it like the General Motors of IT, with requisite broad and deep product coverage and all the challenges of providing complementary service.
The acquisition runs against recent trends toward exiting product businesses or disaggregation, where HP and Symantec broke up and IBM sold off numerous businesses.
“The IT marketplace is shifting,” Technology Business Research principal analyst, Geoff Woollacott, said.
“The challenge for Dell-EMC will be whether it converges on the right trends. Where the IT landscape is shifting from on-premises products to cloud/”as a Service”-delivered subscriptions to IT services, vendors have shifted their go-to-market strategies and corresponding ecosystems dramatically.
“EMC’s federated model, while broad, was hardware-focused and lacked the software-bent and cohesion Dell proposes to bring to the new enterprise.”
For Woollacott, the combined entity will be better able to deliver solutions to large and midsize business customers.
“Separately, Dell and EMC sought to move from hardware sales to software-led solutions selling,” he explained.
“The combination creates a complementary suite of products and compatible sales and market coverage, potentially extracting a greater share of wallet from end customers.”
Yet Woollacott, believes that it remains to be seen if the companies are “truly better together”, given the ability to address the “as a Service” transition.
Consequently, time will tell whether the combination of Dell and EMC leadership, products, sales and go to market will provide new value to end customers, given the tie-up between companies does little to capitalise on the “as a Service” economy.
“The shift to “as a Service” has Dell-EMC competitors, including IBM and Microsoft, moving from component/solution sales to subscription-based sales models,” Woollacott added.
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