The Missing Customer in Dell-plus-EMC

  • 12-Oct-2015

The tech media is abuzz, covering the biggest industry merger in a decade as Dell and EMC confirm merger rumors and tie the knot today. The general consensus is that the two firms bring a certain "synergy" as a single entity. Maybe so, but the world in which that really mattered has long passed.

Different Firms, Similar Strategies

Dell and EMC have actually traveled similar paths. Both started as hardware companies, then acquired software vendors (especially EMC), and then built services arms (especially Dell). Both made some good acquisitions and poor ones. Both thought that by combining hardware, software, and services they could provide "complete solutions."

Both vendors have struggled in recent years to move the needle much in terms of enterprise footprint. This is a marriage of two declining concerns. They could achieve some back-office efficiencies, but they want to tell a more exciting story on the revenue side.

That story will like likely sound like this: you license laptops, servers, and consulting from Dell, and enterprise software and storage from EMC, potentially as semi-integrated bundles.

Enterprise customers are smarter than you think

This buffet-style vision assumes that enterprise IT leaders simply find their world too complicated, and desire a single vendor who can just fix everything for them. This may have been the case in the 1990s, but if so, those days are long gone. The best IT leaders today embrace complexity, and value architectural flexibility over supplier lock-in.

Enterprise IT is hard, but the vast majority of you are smart enough to know that just because you bought some storage from EMC doesn't mean that you need a clumsy mastodon like EMC-Documentum to manage your documents.

I don't see a future where customers gain anything from procuring Dell servers and EMC storage from the same vendor. EMC and Dell have each failed separately to effectively bundle their manifold offerings already; what makes them think it will more be successful together?

Of course this whole negotiation may actually have little to do with you the customer. In the end, M&A deals often get done because investors see near-term shareholder gains, rather than long-term customer value.

What you should do

This is the part of the post where I typically encourage you the customer to do something differently. But this time, I'll just advise to keep being yourself.

In a world of shrinking datacenters with expanding clouds, a thinner SharePoint, a mobile workforce, and a more customer-focused IT operation, you should keep seeking out vendors for the quality of their individual offerings, not their breadth.

If we can help you make the right strategic decisions, don't hesitate to reach out.

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