I would not have bet a lot that Dell would make a pass at EMC but it has apparently happened. The Wall Street Journal broke the story this morning that PC manufacturer and services provider Dell will be purchasing storage giant EMC for a reported $67 billion. Backed by private equity firm Silver Lake, the acquisition will leave Dell CEO, Michael Dell, as the head of a very large and powerful tech company.
What about VMWare?
At this precise moment, many of you MSPs may have let out a collective scream about what Dell would do with technology like VMWare, which is 80% owned by EMC. Well, worry not because apparently VMWare will remain a publicly traded company, leaving Dell as it currently stands, a privately held corporation.
Why Did Dell Do This?
I can only speculate why Dell would want to acquire a company like EMC. For many years, EMC (including its subsidiary company RSA), have struggled to find a place in a rapidly evolving world. Dell, on the other hand, has been eagerly buying up technology companies in an effort to evolve from its PC manufacturing roots into a services organization, led strongly by storage and security.
For this reason alone EMC should make a good acquisition for Dell. This deal will, however, primarily benefit Dell’s direct services business, and likely not its channel business.
Dell and the Channel
If you talk to enough MSPs about Dell you will invariably get a wide range of opinions. Some MSPs really like the company, others tolerate Dell because they have to, while other service providers have had negative experiences with the tech giant. Regardless of your opinion, Dell is now in a very strong position to be a market leader of cloud and managed services to the the enterprise. What they do with the channel still remains a mystery to me.
I know Dell has channel ambitions. They’ve sponsored countless MSPWorld conferences and maintain a health partner base. With this acquisition, however, the question remains whether Dell needs the channel anymore or whether they will pursue a more dominant, direct service delivery path.
We shall see.