Little boxes made of ticky-tacky: What Dell's record-busting $67bn EMC deal means

Re: R&D budgets?

What is considered "R&D" for tax purposes in the US is rather liberal. A software company can write off all their developer salaries/benefits/etc. as R&D for instance. They might have a way to write off a lot of the cost of deployment of their computing capacity since they're developing them themselves rather than buying rooms full of Dell blades as Dell would prefer.

Without being able to break down exactly what various companies are spending the money on it is hard to compare R&D budgets, since none of the companies listed in the article (except maybe IBM) is doing what we used to call "basic research" that led to the creation of things like the transistor and the laser.

Re: 40,000 sales staff

AWS has a lot of sales people, probably closing in on 1,000 around the world... a large salesforce and growing at any rate. Google is rapidly building a world class sales org too.

I don't think sales is any less relevant in the cloud world. They are just selling managed services instead of components parts. IBM, Accenture and the other legacy managed services companies have always had large sales staffs. If you are spinning up a few instances, you don't need a sales person and there is no ROI for the company to hire sales people to convince you use cloud A instead of cloud B. If you are talking thousands of instances and millions of dollars, no one is going to pop a credit card number in for that transaction.... You need custom NDAs, custom SLAs, intergation planning, volume based discounts... and the cloud company wants to make sure you see a convincing presentation to use cloud A instead of cloud B or C.

Having written that, EMC has always had a crazy large salesforce. Much larger than their competitors. Definitely a sales driven company.

Re: The Walking Dead

Hmm, I'm not quite sure. This is just a phase in the decentralization-centralization continuum and the pendulum currently is swinging back into the centralization space.

However, keep in mind that the advances done in this centralization phase, will feed the next decentralization phase, and there we go. Back and forth and back and forth.

So no, I don't believe this is the end of the giants. They will just adapt, wait, and grow again once we hit decentralization again.

Re: The Walking Dead

I agree with the walking dead. The cloud has some huge cost advantages over proprietary on premise. Google and AWS (potentially others) are going to use zero percentage licensed software in their infrastructure. They are going to use inexpensive, custom built scale out and clustered servers. That is a massive cost savings. They have the talent to create fully automated stack builds with zero human intervention. They have enormous economies of scale. This doesn't mean there will be no IT in house, but they will be different skills than racking and standing up servers, infrastructure.

It is possible that people will be able to rebuild all of this on prem, but, even if they do, if they want to seriously compete or even be in the same ballpark as the cloud providers, they cannot use EMC, VMware, MSFT, etc... so these traditional IT companies are in a tough spot. It is not like EMC is going out today or next year, but over the next decade or so.