DELL EMC Merger is ‘Wait and Watch’ for channels and analysts

A state of uncertainty exists for tech OEMs, channel partners and analysts on how the mega deal unravels with more details in near future.

The Dell EMC merger announcement announced earlier this month surprised and shocked — one and all — of the technology industry and the corporate world. The deal size being a mammoth $67Bn.

The complete spectrum has been, is being and would be affected including Dell, EMC and other OEMs, their channels and end customers.

The channel partners too are quite cautious on their future roadmap with various OEMs.

With EMC’s acquisition, Dell has gained a significant breakthrough in its efforts to enter the enterprise storage market, a market where Dell has traditionally struggled in, says Santhosh Rao, Principal Research Analyst, Storage technologies and strategies, Gartner. Dell can now position itself as an end to end solutions provider in the enterprise segment of the data center market, he adds.

The enterprise partner companies in India that garner majority of their revenues with HP are concerned. Dell will get the advantage at the moment because they will have more customer base and better range to sell, feels Gurpreet Singh, CEO of Arrow PC Network which works mainly with HP.

“The deal will impact HP Business as EMC Product and Dell reach will be difficult to integrate initially as the DNA of both vendors are different,” says Manoj Sharma, CEO of Delhi based MM9 Information Technologies.

Forrester report ‘Quick Take: Dell Buys EMC, Creating A New Legacy Vendor’ highlights the new value proposition of the merged entity. Glenn O’Donnell, Vice President & Research Analyst, Forrester says, “Dell-EMC combination is a core data center infrastructure titan . . .Notably, EMC contributes its traditional strength in storage, VMware’s virtualization portfolio, and VMware’s NSX software-defined networking (SDN) technology, and Dell adds its weight in x86 servers.”

Four questions about the Dell-EMC merger

Regenersis is a partner organization purely into aftermarket services business. With this merger, we see bigger opportunities from Dell coming our way in terms of services, says Suresh Kalburgi Shankar, MD, Regenersis India.

Dell is emerging as the biggest enterprise player in the market, as per Singh of Arrow PC Network. However he adds, HP has a history of innovation with newer solutions to stay competitive and the preferred choice of customer.

O’Donnell at Forrester informs, the combined firm will use its collective install base (experts value EMC’s on-premises infrastructure business alone at approximately $100 billion over the next decade) to compete effectively with titans Cisco, HP, Huawei, and Lenovo for this still-enormous legacy market.

Change of Equation

Canalys a global technology market analyst firm with distinct channel focus does not foresee exact visibility of Dell in this aspect. But from the tech giant’s earlier channel strategy as per Jordan De Leon, Analyst, Canalys this will be a great opportunity for Dell to embrace some of EMC’s best practices in channel management.

Such transitions take a fairly long time as per Rao at Gartner. But he adds, “In order to succeed, Dell would need to reassess its channel strategy after evaluating the new product portfolio resulting from the acquisition and ensure redundancies are removed”.

The extended reach and long term relationship with well entrenched customer base has always been HP’s strength as we continue to work on the strong differentiator with the entire HP portfolio, says Sharma at MM9 Information Technologies.

Arrow PC Network is also working with Dell since a year besides being a loyal HP partner (now mainly with 3PAR). We might explore Dell but not with EMC at the moment, says Sharma.

Another big partner of HP based out of Bengaluru, on condition of anonymity, said, “We are still trying to understand the impact of this acquisition on the markets and channels. We will then relook our vendor alliances if needed.”

“Designated channel accounts, clear rules of engagement, and management of conflicts are areas where Dell needs to improve on, and where EMC has excelled. EMC also brings a strong global channel leadership team, and this could prove to be one of the most important (yet least recognized) assets of acquisition for Dell,” says Leon at Canalys.

Will the channel ecosystem of EMC and Dell take into impact of the merger announcement and change their GTM as soon as possible?

The scenario looks uncertain, says Rao at Gartner as the channel partners and customers are expected to be tread cautiously until further announcements are made.

“We doubt most ‘loyal’ HP and IBM partners to align with Dell now as per Leon. Certainly not during the transition period. But many partners will lnow ook with greater interest at Dell, particularly given Dell’s aggressive approach to the channel, adds Leon at Canalys.

The technology ecosystem including channels and research analysts expect the real impact to see the day of the ligh in Dell EMC merger surfaces with more detailed tech roadmap and channel strategy.

It will be interesting to know about how the key questions will impact the channel ecosystem

– How will the channels realign themselves ?

– How the both entities Dell and EMC create common pool of channel management ?

– How will the merged company ensure partner profitability, deallocking etcetra ?

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