back to article Hewlett Packard Enterprise CEO Whitman slams EMC/Dell deal

HP Enterprise's CEO Meg Whitman has slammed Dell's acquisition of EMC. In an email sent to “All Hewlett Packard Enterprise Employees” Whitman says the merger is “a good thing for Hewlett Packard Enterprise and an opportunity for us to seize the moment.” Whitman says HP Enterprise is “two years ahead of the game” and that Dell …

  1. Anonymous Coward
    Anonymous Coward

    Dell? R&D?

    Dell and R&D in one sentence. Are you kidding me?

    Stack'em high, ship 'em cheap. Let someone else risk their hide doing R&D.

    Here comes the rationale for Mickey's gamble - if you are no longer vertically integrated top to bottom (as HP used to be), you have no choice, but to put your "product" on the market. That is a natural result of "value unlocking" aka "crown jewel stripping" as being practiced by Eliott and Co. All those shards from stripped companies over the years have no choice but to do that. Even HP now will have to do it to some extent. If the PC part has done something R&D wise it will end up on the open market for the Enterprise to consume it.

    So a "consumer" (that is politely put) like Dell can come along, bid for it on the open market, pick it up, stack it high and ship it cheap. It can also force its terms on the actual R&D producers due to its sheer size.

    That is an interesting gamble and definitely not the gamble Meg is (erroneously) seeing.

    1. TheVogon Silver badge

      Re: Dell? R&D?

      "Dell and R&D in one sentence. Are you kidding me?"

      You must have missed their blade servers, Compellant and Equalogic disk systems, Precision workstations, Quest software tools, XPS infinity screen laptops, etc, etc, etc...

      1. Anonymous Coward
        Anonymous Coward

        Re: Dell? R&D?

        You must have missed their blade servers, Compellant and Equalogic disk systems, Precision workstations, Quest software tools, XPS infinity screen laptops,

        Most of that is just pack-n-stack components (+/- some thermal modelling of the result) from OEM. Probably minimal R&D in storage which is nothing compared to what EMC does for a living to survive where it is today.

        I definitely did not miss Force10 and quite a few others example of Mickey's Reverse Midas Touch

        In fact Force10 is the perfect example. Switching and routing requires 25%+ R&D expenditure to survive. With Mickey Scroodge sub-11% it withered from where it was to a pale shadow of its former self. So will EMC.

        1. Anonymous Coward
          Anonymous Coward

          Re: Dell? R&D?

          "Most of that is just pack-n-stack components (+/- some thermal modelling of the result) from OEM. "

          Nope, Dell are the OEM for all of the above. Boards are all designed in house.

      2. Anonymous Coward
        Anonymous Coward

        Re: Dell? R&D?

        Compellant - Acquired

        Equalogic - Acquired

        Quest - Acquired

        Blade Servers - Dont they look very similar to HP???

        Dell;s definition of R&D = Acquire companies or copy existing design.

        1. Anonymous Coward
          Anonymous Coward

          Re: Dell? R&D?

          "Blade Servers - Dont they look very similar to HP???"

          No actually - other than the obviously required blade form factor, they don't look like HP blades at all - and they have a number of advantages in terms of ease of use / management compared to HP blades.

          "Dell;s definition of R&D = Acquire companies or copy existing design."

          So, they bought in good R&D capabilities, far cheaper than building from scratch, so sounds like a sensible approach to me...

          1. Anonymous Coward
            Anonymous Coward

            Re: Dell? R&D?

            " - and they have a number of advantages in terms of ease of use / management compared to HP blades."

            "Number of advantages"? Name three.

            1. Anonymous Coward
              Anonymous Coward

              Re: Dell? R&D?

              "Name three."

              Simpler / faster firmware update process

              Simpler config for hot swap blades (stored on Chassis not in blade)

              Configuration of IO modules is far easier.

              1. s2bu

                Re: Dell? R&D?

                Did Matt Bryant start posting as an AC?

      3. Matt Bryant Silver badge
        Facepalm

        Re: TheWrongun Re: Dell? R&D?

        "....You must have missed their blades servers...." No, just ignored them, as did the majority of the market. HP won that war (with IBM limping in second after a valiant fight) many years ago. Dell not only cut back on blades research years ago, they instead invested in poaching an HP blades exec so they could copy HP's research in an attempt to leapfrog IBM into second place in the blades market. It hasn't worked and they are still miles behind HP in blades.

        I can think of at least two execs - Rick Becker and Richard Conrad - that Dell poached from HP, plus ex-EDS COO Steve Schuckenbrock (http://www.bloomberg.com/bw/stories/2006-12-13/new-drivers-for-dellbusinessweek-business-news-stock-market-and-financial-advice), all because Dell has been trying to develop a bigger enterprise and services business in a direct clone of HP's strategy of several years. HP has stolen the PC-maker crown so Dell really has no option other than to try and diversify, and the EMC purchase finally gives them some real capability to do so. Once Dell and EMC sort out the overlaps, get rid off the about 20% of their combined workforce in "synergistic savings", and try to keep the rest from fleeing the ship in the chaos, they should then be about two years behind HP in the market again. Oh, wasn't that what Meg was trying to point out?

        1. Mpeler
          Mushroom

          Re: TheWrongun Dell? R&D? PC Maker?

          "PC-maker crown". Try PC Integrator. HP hasn't "made" PCs for MANY years.

          HP = Hewlett Packaging

          RIP Bill and Dave.....

  2. Jack of Shadows Silver badge

    Methinks the Lady doth protest too much.

    No surprises here. The overlaps in Storage are going to be the make or break for Dell+EMC. Otherwise, it's normal channel stuff that Dell seems to do fairly well. Other than that, we are running the HP+X as one of our historical model of deals in this category and we all know how well HP executes mergers. Oracle+Sun is a better historical model and Larry's approach is to throw enough money at it that you can't ignore the results. May not be able to afford it, but damn it sure is slick. Seems like Dell has enough cash flow for the job. Pricing of the results? <Shrug>

  3. Tony S

    "Empty vessels make the most noise".

    It would appear that Ms Whitman is using this acquisition to try and build up some credit with her shareholders by going on the offensive against the competition.

    However, as far as I can see from talking within their own vendor channel, HP's plans for change are still incomplete and there is little evidence that they will actually deliver any real benefit to anyone other than the board. Not a position from which to be predicting failure for someone else; and she might be better off trying to fix the problems within her own business first.

    Yes, Dell and EMC have some major work ahead, but they haven't had a decade of poor decision making behind them. It's early days; they may well find it challenging (I'd be very surprised if they didn't), but I think that it's a bit too early to be gloating over their sudden demise.

  4. Otto is a bear.

    Hmm ...... In other news

    Poundland is taking over Harrods, well not, but EMC likes to be a premium supplier and Dell, not so much. It does seem a strange marriage, but then if EMC needs to be bought, who else, Cisco?, Lenovo?

    Maybe a bit of commoditization of the high end storage market will be no bad thing.

  5. PleebSmash
    Facepalm

    Memristors, The Machine, 3D printers...

    If Dell starts making big promises like HP, that's the time to start worrying.

    1. Mage Silver badge
      Facepalm

      HP R&D

      Also wasn't HP the driving force behind the loony Itanium design.

      I like R&D, but HP spun out their optical, semiconductor chips, test gear etc years ago. They have zero resemblance to the test gear company Hewlet and Packard founded.

  6. Anonymous Coward
    Anonymous Coward

    Lets not forget Palm!

    By far the easiest comparison was their re-venture into the handheld market. In which they bought a dying Palm and heamoraged money trying to force that to work, wasting tonnes of time on WebOs. After a couple of weeks of selling which. They abandoned the palm hardware and gave away WebOs.

  7. dogged

    I'm starting to see a pattern in the leadership of HP.

    They appoint somebody who seems to be "safe" and then they go batshit within about 8 months. Every time. Quicker if you happen to be Leo Apotheker.

    I can't even blame them anymore. It looks to me like Carly Fiorina left the company as a huge poisoned chalice, a root of infection that just won't go away. All we can do is watch it eat itself away and destroy people who might have been perfectly sane and maybe even competent if only they worked somewhere else.

  8. AdamT

    MW management style

    Having read some of the various claim/counter-claim documents in the HP vs. Autonomy spat I still can't get over the description of the high level "Executive Committee" meetings: "Ms Whitman ... repeatedly adopted the management approach of ... playing country music to the meeting instructing the senior executives attending to take the meaning of the country music songs and apply them to their own management methods".

    Sounds like HP is in safe hands ...

    1. Shadow Systems Silver badge

      Re: MW management style

      The problems truely began when the song "Take this job & shove it, I ain't workin' here no more!" started to play.

      *Sarcastic Cough*

  9. Anonymous Coward
    Anonymous Coward

    A woman scorned it would seem as she couldn't close the EMC/HP merger last year.

    1. Anonymous Coward
      Anonymous Coward

      "A woman scorned..."

      You would have thought they would have learnt a lesson from the Carly Fiorina fiasco. But nope, another woman...

      1. Anonymous Coward
        Anonymous Coward

        At least you were explicit...

        Well at least you made your criticism explicitly misogynist, whereas most others here have just implied their misogyny.

        By all means criticise Whitman for her actions, but not for her sex please.

        1. Dadmin
          Linux

          Re: At least you were explicit...

          Thank you for that! Let's forget the unimportance of gender here and focus on a person so out-of-touch with reality that they bother to spend $41 million of their own US dollars to try and become the governor of California. And failed by a wide margin. This is not someone who can make rational decisions with money because they have already been given far too much and seem to waste it with abandon. I guess being "frugal with funds" is something they tell the US tories to keep voting for them, forget the wage gap. There's nothing to see here! Move along citizen. Buy more HP kit. It's not crap. Yada yada yada...

          1. HonestAbe

            Re: At least you were explicit...

            @Dadmin: Exactly. There is no shortage of over-hyped failures in either gender. The issue here shouldn't be men vs. women. It should be geniuses vs. fools. A fool is someone who doesn't understand how much they don't understand. Whitman is their poster child.

        2. J. R. Hartley Silver badge

          Re: At least you were explicit...

          Ok AC love

      2. Anonymous Coward
        Anonymous Coward

        "You would have thought they would have learnt a lesson from the Carly Fiorina fiasco. But nope, another woman..."

        True, but presumably she was bargain priced....

  10. Chris Miller

    Because a thing seems difficult for you, do not think it impossible for anyone to accomplish. - Marcus Aurelius (Meditations Book VI)

    1. Vector

      ...unless you can steal their customers. Then rant far and wide!

      -Machiavelli (ish?)

  11. Hans 1 Silver badge

    The thing is, HP buyz stuff and then drops it, every other player in the market tries to make the best out of an acquisition. Even Oracle is not doing that bad after their Sun acquisition...

  12. PhilipN Silver badge

    Horrible

    Is that what we may now expect from the head of a renowned company with impeccable provenance? Not only obnoxious but I have known interns who could write a more perceptive rally-the-troops memo than this.

    Ugh!

  13. Anonymous Coward
    FAIL

    The biggest wagon is the empty wagon is the noisiest...

    ...The consul a horse, oh, Meg, I think you're lost...

    ...lost.

  14. Gene Cash Silver badge

    Interest?

    Is the interest really that big a charge?

    The deal was bankrolled by Dell himself, who's not going to charge himself interest, and Silver Lake, who has a sweetheart relationship already. Since they're already making the big bucks, they might not want to hobble their racehorse.

    HP has a vested interest in spinning that number as large as possible, and I wouldn't trust Meggie baby if she said the Atlantic was wet.

    Of course, Dell is private and doesn't have to tell anyone.

  15. W. Anderson

    One critical point of the Dell/EMC merger not mentioned by Whitman is the VMWare component - worth $30 plus billion dollars by most credible estimates - and an entity that competes 'tooth and nail' with Microsoft Virtualization and Cloud Offerings.

    Just how Dell - as a purported concubine of Microsoft (Microsoft has more than $4 billion stake and significant influence and some control in Dell), will handle this dilemma is anyone's guess. I suspect that Microsoft may 'force' Dell to sell off VMWare or sell VmWare to them (Microsoft) for peanuts, so that Microsoft can force feed all their Virtualization and Cloud Computing clients (VMWare users) a diet that is considerably more expensive and provides significant indigestion.

    Either way, Dell is unlikely to be the winner, with most current VMWare clients hosted on UNIX/Linux foundation, which is a No-No to Microsoft, who will almost guarantee considerably poor performance and reliabiliy of Microsoft- VMWare on UNIX/Linux than on Windows.

    If owned by Microsoft, all software and contract license fees of VMWare are sure to double and triple compared to similar services of native Microsoft. Dell, as owner of VMWare may be forced by Microsoft to escalate all VMWare client fees and services.

    1. DougS Silver badge

      How could Microsoft possibly "force" Dell to sell VMware to them for peanuts? There is no carrot or stick big enough to induce them to take a $10-$20 billion loss on VMware selling it to Microsoft. If they have that kind of power, why not force Dell to sell their entire operation to Microsoft for $1?

      1. W. Anderson

        Dell & Microsoft - they are already together

        To commenter "DougS"

        Anti-trust. Clearly spelled out in Dell "privatization" move, by Federal Trade commission and US Department of Justice.

        1. DougS Silver badge

          Re: Dell & Microsoft - they are already together

          You obviously have ZERO understanding of what antitrust is, if you think that Dell owning VMware would have antitrust implications but Microsoft (who owns the number two hypervisor) owning VMware would not.

  16. Breen Whitman

    Why does HP hire these sad dried up husks.

    The founders must be rolling in their graves. Both were gifted graduate electrical engineers who started literally in a garage.

    Now its ya granny who does an excellent apple crumble is CEO.

    Not forgetting that other mad tart Fiorina or whatever.

  17. Stevie Silver badge

    Bah!

    Yep, shareholder value once again front and center in this vapid cheerleading exercise.

    Or did I miss the bit where Ms Whitman detailed (as far as she could without breaking confidentiality or compromising cutting-edge IP in progress) the exciting new game-changing technologies that HP will be revealing to the world soon?

  18. a_yank_lurker Silver badge

    Meg is probably correct

    Meg is indirectly highlighting a common senior management/investor fallacy of merging for the sake of merging. The Dell/EMC merger does not appear to really fit either company. It seems to be pushed by a need to do something grand to make Wall Street happy. Meg has some bad, hard won experience at such things.

  19. Chairo
    Meh

    Many years ago

    I had a job interview at HP. When asked, what would be important for me regarding the job, I answered "a good working atmosphere". They left the room to discuss internally and I heard manic laughter from the next room.

    They didn't offer me the job. I was not disappointed.

    I can imagine HP has trouble integrating other companies. I really can.

  20. Anonymous Coward
    Anonymous Coward

    Interest vs buyback FUD

    EMC is already making $3BB (2014) worth of stock buybacks per year (to keep wallstreet happy). That will stop if it goes private. This the interest payments actually leave ~$500M MORE per year for R&D (which EMC already massively invests in). This interest conversation is just FUD and she knows it.

    http://marketrealist.com/2014/08/why-emc-accelerates-share-buyback-plan-3-billion-2014/

  21. W. Anderson

    The VMWare portion ofDell/ EMC merger is a non-go for Microsoft.

    DougS and the other yokels on TheRegister forums who are quick to defend Microsoft and it's slavish partners like Dell never explain - if Dell is not a Microsoft minion, why does the company not manufacture any "non-Windows" products that are significant sales channels in the technology marketplace? ChromeBooks, Android tablets and/or smartphones sales, when combines with those of Apple constitute approximately 93% of the Mobile ecosystem (compared to Microsoft Windows measly 4% -5 %) that is overwhelming the Windows Desktop PC and mobile market.

    Therefore it is rational and understandable, given Microsoft's $4 plus billion investment in Dell that the VMWare portion of EMC acquisition - that competes aggressively and dominates Virtualization space over Microsoft's Hyper-V virtualization, presents a conundrum for Dell as Microsoft's concubine.

    Dell even antagonizes and strongly discourages Linux implementations on their Server system, other than very profitable agreements with companies like Oracle, whose enterprise customers Dell cannot afford to anger. The vast majority of Social Media infrastructure and Cloud Computing Services in USA and Internationally are Linux based (read every, repeat every Gartner, Forrester, IDC and other credible reports on this issue), so Dell has proven to be a Microsoft dupe.

    1. DougS Silver badge

      Re: The VMWare portion ofDell/ EMC merger is a non-go for Microsoft.

      I love how not agreeing with you makes me a Microsoft apologist in your mind. You need only look at my posting history to see that is definitely not the case (and I've run Linux on my desktop since the late 90s, even before the first time someone predicted it would be the "year of Linux on the desktop" :))

      VMware is arguably the most valuable part of what Dell has acquired. Maybe they will spin it off as an independent company, which is something that many EMC investors have been clamoring for. What they won't do is sell it to Microsoft (would probably not be allowed due to antitrust anyway) and most certainly won't sell it for less than its worth to Microsoft so they can kill it. Companies may do dumb things when it comes to mergers, but simply shuttering a $30+ billion business is not something anyone is going to do.

    2. Anonymous Coward
      Anonymous Coward

      Re: The VMWare portion ofDell/ EMC merger is a non-go for Microsoft.

      "The vast majority of Social Media infrastructure and Cloud Computing Services in USA and Internationally are Linux based "

      Social Media, yes, cloud computing not so much. Microsoft have overtaken even Amazon in cloud revenue now.

  22. Anonymous Coward
    Anonymous Coward

    And her opinion matters?

    Hewlett Packard Enterprise Services floats off from HP Inc in two weeks with none of the recognised logos and all wrapped and ready to be bought up and swallowed. No-one left here seriously expects to be working for an independent company six months from now. 30,000 of us definately wont be around as the perennial axe continues to swing.

    Whitman, like all the rest with their snouts in the trough, will take her obscene payoff and run. She can take her sour grapes about EMC with her.

    Me? I'm waiting for whoever takes over to end the final salary pension of the few of us still on them then I'll take the payoff and go and work for a company that isn't rendered incompetant by its own bureaucracy, obsession with headcount and overall inability to let managers manage and techies tech.

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