EMC, HP blockbuster Borg: Big potential or total CATASTROPHE? Amongst the storage cognoscenti on Twitter, there’s been quite a discussion about EMC and HP possibly merging, despite the recent reported collapse of talks on the issue. Most people seemed to be either negative or at best disbelieving that something like this would bring value or even happen. But from a technology point of …
We should all care about market diversity, the ability to shop around between vendors for the products we need.
Sure there are many new starts, with disruptive technologies, or market propositions, but they usually get bought out by the big boys, and the fewer of those there are the worse the future looks for innovation, competition and whole life costs. Which by the way is why you should care about Oracle's hardware, even when they don't.
I'd rather see EMC start making servers again, than vanish into a company that already has a storage proposition. I just see it as making my long term costs go up, as my purchasing leverage goes down.
If we count mergers then Autonomy isn't anywhere near the record, sadly.
It was only 3 or 4 years after the HP-Compaq merger that the combined company was worth less than HP had been worth individually beforehand. Quite what HP shareholders from before that merger make of the dilution there and then destruction via Autonomy of vast sums of their money is anyone's guess.
Similarly with Time Warner and AOL. The value of AOL was essentially zero within no more than 5 years of Time Warner handing over $50Bn worth of stock to merge with it.
What is driving this was an activist investor who wanted EMC to divest its investment in VMware. It seems part two of this is sell off EMC's storage business to an acquirer.
I think if a server vendor owned VMware, it would not be good for the broader market. An independent VMware is more valuable to its stockholders.
So this likely was really about EMC's storage business, post VMware divestment.
That said, while there is overlap, it really is only the overlap between 3PAR and VNX. The rest of EMC's storage portfolio would find no real overlap, especially given HP's support of its HDS OEM relationship is lukewarm.
If HP purchased EMC, it could drive an acquisition of NetApp, most likely by Cisco.
If Cisco purchased EMC's storage business, it may drive an acquisition of NetApp, but is less likely.
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