back to article Dell buys out EMC in mega-super-duper $67 BEEELLLION deal

Dell has confirmed it is buying storage giant and virtualisation player EMC in a deal valued at $67bn, as we reported earlier today. Privately-owned Dell is scooping up the publicly listed EMC in the industry’s biggest ever tech buyout. The buyout breaks the record established by the $25bn Hewlett-Packard-Compaq deal in 2001 …

  1. Anonymous Coward
    Anonymous Coward

    Sparc?

    "Sparc and one-time x86 rival Sun Microsystems entertained a similar vision when buying StorageTek for $4.1bn in 2005. Sun reasoned it could sell systems to the StorageTek base, who had previously bought IBM, HP, Dell and EMC."

    The deals aren't entirely comparable. Sparc was dying as far back as 2005, while Dell sells commodity Intel based servers. Dell's real problem? I can't remember the last time I saw a Dell box in a server room. In the carrier space, at least, HP pretty much rules (and I don't know why, bearing in mind I've just used the word 'commodity').

    1. Anonymous Coward
      Anonymous Coward

      Re: Sparc?

      Agreed, HP are almost always behind on the tech curve compared to Dell but having tried to explain that to people they STILL buy HP while acknowledging that Dell systems are better, cheaper and more feature complete. Image is a hard thing to change, you only have to look at HP trying to destroy their own (and failing) to see that.

      1. Anonymous Coward
        Anonymous Coward

        Re: Sparc?

        According to IDC, Dell has a larger share of sales in NA for x86, over HP, IBM, Cisco, Quanta and Supermicro.

        People buy HP because HP has a more mature sales channel and a lot of this business is conducted through sales channels rather than direct (or through Dell resellers). I expect this will change as Dell sells more through the channel they have been building.

        Secondly, IT Purchasing doesn't have an understanding of industry standard / commodity technologies and has been hoodwinked into thinking most IT hardware is special (it's not) or unique (it's not).

      2. Anonymous Coward
        Anonymous Coward

        Re: Sparc?

        HP is always behind! Seriously! Not a single reputable analytical company acknowledge that. Then you failed to mention in what it is always behind! You cant just throw a statement and expect it to be right!

        1. Anonymous Coward
          Anonymous Coward

          Re: Sparc?

          "You cant just throw a statement and expect it to be right!"

          Fair enough, examples...

          They were a whole generation behind on out of band management using the iLO/DRAC to do firmware and software updates, and therefore integration with config management systems. They were many many years behind offering drivers in a format SCCM could use easily. They adopt the latest CPUs later, offered disk tiering/caching a generation later than Dell, internal SD/USB boot was later, I've yet to see half height SSD on HP kit, they were a generation behind on very small integrated systems (i.e. the little 4 blade chassis things I can't be arsed to look up).

          They were later on increases in CPU and memory scaling as well as much later introducing the latest versions of DDR memory at a time when it was a bottleneck (remember when all the DIMMS got moved and we suddenly got a bunch of new slots?). They were also years behind on LOM modules being swappable, with 10GbE on montherboard very late indeed, and the PCIe lane reshuffle to give increased bandwidth where needed was later than Dell (useful for PCIe Flash scenarios).

          In fact, almost every example I can think of in the last 3-5 years HP introduced after Dell with the exception of Moonshot which is extremely specific use-case hardware.

          Don't get me wrong, HP make great kit which rarely goes badly wrong. They are just lagging in innovation and integration compared to Dell these days. By quite a margin.

    2. Jay 2

      Re: Sparc?

      Loads of Dell kit in our server rooms, not had too many problems with them. Though since acquiring a product from our parent company there's loads of HP abou now too.

  2. AndyM
    Mushroom

    RIP Compellent/EqualLogic

    Can't see Compellent or EqualLogic surviving this, or will VNX be the one that gets put out to the pastures.

    Going to be some hard decisions to reduce the storage platforms all owned by Dell now.

    1. Anonymous Coward
      Anonymous Coward

      Re: RIP Compellent/EqualLogic

      Probably a strategy to avoid taking Compellent out back and doing the kind thing. If Dell has enough storage offerings it doesn't need to admit Compellent is a one trick wonder with a pretty crappy party trick. The lack of forum posts when searching for info on Compellent issues says all you need to know about their sales stats. That and the number of Compellent issues in the first place, I've never met a happy customer or a returning customer and I've met a few.

    2. Zed Zee

      Re: RIP Compellent/EqualLogic

      It's simple: Dell will stop making its own sh*te brands and no one buys and adopt EMC across the board instead.

      What it's not accounted for in the acquisition is that not only is traditional storage (SANs and LUNs) being eroded by Cloud Computing but it's also being eroded by different and new local storage solutions.

      For example, having local drives is cool again, thanks largely to Open Source projects, such as Hadoop, GlusterFS and Ceph, and closed source ones, such as SAP HANA. These are all clusters of local, cheap SATA/SAS drives, so who needs a SAN?

      1. boatsman

        Re: RIP Compellent/EqualLogic === I dont think so....

        " Dell will stop making its own sh*te brands and no one buys and adopt EMC across the board instead."

        in fact, everybody buys it. in volume, Dell is the biggest. But margin is much lower.

        I think the plan is to take over EMC's customer base, make them happy with software defined storage at much lower prices. running on cheap sh**te from DELL.

        High end storage is a shrinking niche, which explains why EMC has a problem, not Dell.

        The margins that EMC has, are going to melt away very quickly in the next 5 years, because nobody wants to buy their sh**te again unless they have to for this or that niche purpose, you see.

  3. Tech Curmudgeon
    FAIL

    Another one bites the dust

    Where do I start? Incompatible cultures: EMC is east coast. Dell is not quite west coast but most definitely not east coast like EMC. Dell has a poor track record of integrating it acquisitions and creating synergies with existing products - this will be no different. Poor sales folks now have to contemplate yet another product line. Then there is the inevitable layoffs, cuz doing more with less is the Dell way. What's the game plan here? Does MSD think that EMC customers have never seen a server before?

    Dell: Your one stop shop of horrors.

    1. Preston Munchensonton
      Facepalm

      Re: Another one bites the dust

      Dell may not be West Coast, in terms of geography, but anyone who's ever wondered by we should "Keep Austin Weird" can tell you first hand that they're definitely Left Coast.

      Cost cutting isn't the Dell way. That's a common business practice that must be part of the management toolbox. If not, you'd wind up with another ever-growing bureaucracy that now overruns the central governments of the US, the UK, France, Germany, etc. So long as they don't cut people who actually are producing value (and so long as they try to prevent them from being scared away, which is the more likely scenario), there won't be nearly the poor impact that these types of deals invariably include.

      Personally, I remain highly skeptical. Very few people have high-enough aptitudes to effectively run such a large group of people. Like much of IT from the 90s, the decline is finally catching up and deals like this won't reverse those trends. They need ideas and people who can think, not more bean counters figuring out a way to fit a square organizational peg in a round financial hole.

    2. K Silver badge

      Re: Another one bites the dust

      Amen... they practically destroyed Quest, 4 years on things like vRanger and Foglight need taking out the back and shot. Personally I like their hardware, but Dell just don't get software.

  4. IHateWearingATie
    Unhappy

    Majority of large aquisitions fail to provide value

    This will not be an exception.

  5. Mondo the Magnificent
    Meh

    Valid points..

    The reason Sun couldn't mae a success of StorageTek is because the channel was the foundation that StorageTek was built upon. Sun ignored this and even pushed resellers out of deals that Sun believed they (the resellers) were not qualified to close.

    Dell does understand the channel though and have made a success of it with Euqallogic, although to be honest, Dell did approach Equallogic end users 'after the deal'

    Dell then bought Compellent Storage, heavens knows why,because at that stage Dell were working quite closely with EMC in the UK, but the Compellent purchase resulted in the Dell/EMC partnership grinding to a halt...

    Let's see how this pans out in the long term, Dell are a lot more savvy than Sun Microsystems were and this could be the difference, but I wonder if the "EMC" name will be retained in the long run?

    EMC is an old and trusted name in the Enterprise storage game, let's hope Dell don't follow Sun's piss poor example and make a cluster fuck of things...

  6. Pascal Monett Silver badge

    So this is a $67 billion roll of the dice

    About to turn into a $67 billion bonfire.

    Since Y2K company acquisitions have gone crazy, and practically none of them have been successful (ie made big bucks for the acquirer).

    I applaud the balls it took to decide to throw away that amount of money. It'll burn brightly, and might just be seen from the Moon.

    1. DougS Silver badge

      Re: So this is a $67 billion roll of the dice

      They don't happen because they make big bucks for the acquirer, but because they make big bucks for the investment banks that arrange them. This will be a fee of what, $3 billion or so? I wonder how many Wall Street bankers are checking listings on $10+ million Long Island homes right now.

      Since the bankers already played this game by taking Dell private, it was pretty easy to sell Michael Dell on this acquisition. Probably appeals to his ego, and he doesn't have to care too much if it is flops because he'll still be a billionaire either way.

  7. Mtech25
    IT Angle

    If i was in charge of Dell

    I would use that 67 Beeeellllion dollars to create new Technology and patents, maybe even buying up a couple of new patents sure it may be a risk but I suspect throwing it all at EMC might be a bigger one.

    1. Mage Silver badge

      Re: If i was in charge of Dell

      create new Technology and patents?

      Making patents is easy. Esp. in USA.

      Creating new tech that actually makes money is really really hard. Apple is very successful, yet ALL their products technology previously existed from other companies. They created a better experience, did better marketing with stuff that matches the marketing perception. It's no use being brilliant at marketing junk, even with innovation in it in the long term (Sinclair, Amstrad, though Amstrad stuff was much better made than Sinclair, but they were let down by their plastic cased PC, was it HDD issues? ).

      We are at the commodity, the 1990s VCR & HiFi phase of computers, tablets, phones etc. All Dell can really do is do what they do better than competitors. They aren't the kind of company that's going to invent a new kind of storage (IBM maybe, but where is HP's memristor?). Perhaps they could develop a new Linux Distro with a better WINE to replace Win10. But I was involved with Dell's attempt to sell Linux based systems in 1999, and I'm sceptical that they can do that. OTH, who knows, perhaps MS will be distributing Linux to access their Cloud services. They did once own and sell Xenix and do have their own Linux flavour for Azure switches.

      Dell do product development with other people's proven technology. I can't see them doing "blue sky Research".

      1. jgarry

        Re: If i was in charge of Dell

        Since you asked about memristor: http://www.bit-tech.net/news/hardware/2015/10/09/hp-sandisk-reram-memristor/1

    2. James Micallef Silver badge

      Re: If i was in charge of Dell

      "If i was in charge of Dell I would use that 67 Beeeellllion dollars to ..."

      Dell DON'T have $67B, that's (mostly)* coming from the VC firms, so the VCs are presumably going to have a good chunk of Dell debt or equity.

      Although presumably Dell could still buy plenty of whatever they want to buy even with a couple of $B

      *I'm not sure if I missed it in the article but I don't think it was specified who's fronting how much of the wonga.

  8. Steve Davies 3 Silver badge

    Have the Shareholders agreed to this deal?

    If not therything is up in then everything is up in the air until it is?

    Has due-diligence been done yet? After the HP-Autonomy farce then I hope that it does not turn up any nasty surprises.

    1. Chavdar Ivanov

      Re: Have the Shareholders agreed to this deal?

      Dell is privately owned. No need for either.

  9. Anonymous Coward
    Anonymous Coward

    Elliot?

    wonder what the antitrust types would make of Eliot causing trouble over here and over at Citrix .....or the next logical step, the merger of the two?

    Actually, i'd rather see Cisco and Citrix stop dancing and find an aisle to walk down or better still watch Citrix sort itself out ....

    1. chivo243 Silver badge

      Re: Elliot?

      I always found citrix solutions to be a bit expen$ive, enough so, that my employer always passed on most proposed solutions involving citrix.

      It could work because nobody ever got fired for buying Cisco.

      1. Anonymous Coward
        Anonymous Coward

        Re: Elliot?

        Nobody ever got fired"

        5-10 years ago then yes, but if one of my guys brought Cisco these days, I'd fire their ass faster that a speeding packet! These days there are cheaper and superior alternatives, that offer better value for money.

  10. Mage Silver badge

    Growth?

    Sometimes it's not about growth but defending your position. I hope it works out better than Autonomy or the Maginot line.

    1. DButch

      Re: Growth?

      The Maginot line worked fine, it was France' neglect of the taxicab fleet that doomed them.

  11. CrosscutSaw

    What about the little people

    Is this good for the consumer, for us?

    Why do I have a bad feeling. Why do I hate this news.

  12. Zmodem

    replace EMC servers with dell and go for 100% uptime with no raid losses and putting your cloud account back to last week

    1. Zmodem

      EMC and the powered by dell logo, if the service is top notch, then the servers have to be top notch, and put DELL on your maybe list when its time to upgrade your local boxes

  13. Mikel

    The magic beans are in enterprise storage

    The ridiculous margins are amazing.

  14. J J Carter Silver badge

    Anyone here tonight who's a Dellionaire? Yep, quite a few I see.

  15. J J Carter Silver badge

    Dell is over 50!

    This 'cloud' business is for young men.

    1. Dixey

      Re: Dell is over 50!

      I could not disagree more. I am 55 and studying for a Masters in Cloud Computing. It is great to see all the old ideas and a few new ones come together in a "new" solution. I call on all aging techies get into Cloud! We need to get the young ones heads out of it and their feet back on the ground :-)

  16. Anonymous Coward
    Anonymous Coward

    EMC Stock Price?

    Why hasn't the stock price ballooned up to 33 bucks?

    1. Anonymous Coward
      Anonymous Coward

      Re: EMC Stock Price?

      because no-one wants to throw away $5/share.

  17. wsm

    Just a transaction

    Tucci (electronically) signed a message to EMC customers today that said, in part,

    "Michael S. Dell, MSD Partners, and Silver Lake are leading a transaction...Following completion of the transaction, Michael will lead the combined company as chairman and chief executive officer...this transaction will create a new leader in the most critical areas of the $2 trillion information technology market..."

    The word "transaction" was mentioned five times before Mr. Tucci concluded that it was all for the best.

    I wonder what he calls a takeover, a controlled merger, an avaricious acquisition or any other stock-wrangling extravaganza?

    It's only a world of transactions after all.

  18. ps2os2

    EMC

    I am happy management got rid of our EMC boxes last year. Hate to see what Dell is going to do here.

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