Woke up and saw this: IT'S OFFICIAL: Dell just bought EMC in one of the biggest tech mergers ever - Yahoo Finance that is a big change!
Dell acquires EMC
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Elliott Management did it again.
Looks like they are behind the deal. EMC may tighten grip on VMware - Fortune
Couple month ago, they send a open letter Elliott Sends Letter to Citrix Board of Directors | Business Wire to Citrix which result Mark Templeton (Citrix CEO) to retire. Citrix Systems CEO Mark Templeton to Retire - WSJ
Couple weeks ago, Citrix try to sell itself as a whole to Dell but looks like it goes no where. Exclusive: Citrix in last-ditch attempt to sell itself - sources| Reuters
A single hedge fund company shaken up the virtulization community we are known of as of today. It affect both VMware and Citrix (they cover server virtulization and desktop virtulization market over 90%). Dell on the other hand has been purchase a lot companies in the past couple years. Quest, Force10, SonicWall, Compellent, Wyse, etc. They are not having an easy time to integrated them. They are also known by eliminate partners. We shall see how the industry react.
BTW, it does push HP to a corner.
Looks like they are behind the deal. EMC may tighten grip on VMware - Fortune
Couple month ago, they send a open letter Elliott Sends Letter to Citrix Board of Directors | Business Wire to Citrix which result Mark Templeton (Citrix CEO) to retire. Citrix Systems CEO Mark Templeton to Retire - WSJ
Couple weeks ago, Citrix try to sell itself as a whole to Dell but looks like it goes no where. Exclusive: Citrix in last-ditch attempt to sell itself - sources| Reuters
A single hedge fund company shaken up the virtulization community we are known of as of today. It affect both VMware and Citrix (they cover server virtulization and desktop virtulization market over 90%). Dell on the other hand has been purchase a lot companies in the past couple years. Quest, Force10, SonicWall, Compellent, Wyse, etc. They are not having an easy time to integrated them. They are also known by eliminate partners. We shall see how the industry react.
BTW, it does push HP to a corner.
Third paragraph: Dell Said to Discuss Buying EMC, VMware Stake to Add Storage - Bloomberg Business
EMC owns something like 81% of VMWare. According to the Bloomberg pundit I heard today, they are rumored to sell down some ownership and leave about 70% remaining. I think Dell would do well to buy EMC then sell off the stake in VMWare to pay down debt but remain say a 5% ownership to allow for a better working relationship as far as the law allows.
edit: Not an accountant, but I think, Dell could, if it bought EMC and VMware, convert some debt into ownership in VMWare and avoid taxes that way.
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Very good point. During VMworld one of the big thing was VMware to buy EMC. Dell buy EMC and sell VMware share back to VMware.
Dell's tracking stock offer for EMC disappoints - Yahoo Finance
This is interesting...
"The Dell-EMC deal includes a provision that allows EMC to seek a better offer, a so-called go shop clause, for the next 60 days. Analyst Kulbinder Garcha at Credit Suisse said a better deal could materialize from Hewlett Packard (HPQ), after it splits up next month, or Cisco Systems (CSCO). "HP Enterprise could become again interested, and we continue to believe a Cisco-EMC combination would create an IT powerhouse," Garcha wrote in a report on Monday."
This is interesting...
"The Dell-EMC deal includes a provision that allows EMC to seek a better offer, a so-called go shop clause, for the next 60 days. Analyst Kulbinder Garcha at Credit Suisse said a better deal could materialize from Hewlett Packard (HPQ), after it splits up next month, or Cisco Systems (CSCO). "HP Enterprise could become again interested, and we continue to believe a Cisco-EMC combination would create an IT powerhouse," Garcha wrote in a report on Monday."
Dell, from what I hear, needs/very much wants EMC's data portfolio. I see a DELL/EMC selling off VMWare to the highest bidder to pay down debt. But the other players mentioned in your quote are probably much better suited from a balance sheet perspective to fight Dell.
Side-note: how does this play into an industry that is going away from brand-name boxes to a more generic hardware, specialized software world? What if the open platform initiatives take off and hardware becomes even more commodity due to standards and software takes a front seat even more? What would a big iron firm like a Dell w/ EMC do in that environment?
Side-note: how does this play into an industry that is going away from brand-name boxes to a more generic hardware, specialized software world? What if the open platform initiatives take off and hardware becomes even more commodity due to standards and software takes a front seat even more? What would a big iron firm like a Dell w/ EMC do in that environment?
in somewhat related news, HP and Sandisk are teaming up to bring memristor based disks to fruition. Could have a disruptive affect on firms if it lives up to the hype.
HP and SanDisk join forces to finally bring memristor-like tech to market | Ars Technica
HP and SanDisk join forces to finally bring memristor-like tech to market | Ars Technica
It is ironic if this is the route Dell takes to 'bastardize' the 'crown jewell' in VMware (highly innovative/game-changing tech all the time across the entire portfolio) to keep a monolithic/BIG IRON company that has constantly been struggling to stay at the forefront and re-invent themselves. Maybe I just don't value BIG IRON SAN gear as much as some others may but that behemoth of a beast seems awfully long in the tooth for the long-haul IMHO. Keep VMware, keep hot after the hyper-converged/SDDC efforts, kill off your garbage compellent/equalogic line and press on (~end sarcasm)
That's what I think they might do but not what they should do. This deal of finalized is huge. Will take years to work out the synergies. Maybe debt isn't an issue for them. They might enjoy the cash cow that VMware is.
I just don't know how relevant these vertically integrated companies are in the new cloud everything space. nah there will be a use for in house boxes and local data centers. Overall though I think the own-your-own-hardware market will shrink and as such Dell will have to compete for the cloud hold outs. I know STH did their own cost break down on AWS vs owning but clearly there's enough companies out there where the numbers add up. Even my firm is moving some infrastructure to Azure and we are old
School.
I just don't know how relevant these vertically integrated companies are in the new cloud everything space. nah there will be a use for in house boxes and local data centers. Overall though I think the own-your-own-hardware market will shrink and as such Dell will have to compete for the cloud hold outs. I know STH did their own cost break down on AWS vs owning but clearly there's enough companies out there where the numbers add up. Even my firm is moving some infrastructure to Azure and we are old
School.
Owning vs Cloud is pretty much the same biz decision as own vs lease for planes and that market still makes my head spin. As an example, Emirates will buy an Airbus 380 for ~200 million, turn right around and sell it in a lease buyback to a financial firm on a 14 year term that generally comes to ~300 million total (half the time directly at customer delivery with Emirates putting no money down). AFAICT, the reason they do this is that it prevents them from having to invest capitol or assume any debt. They due have a binding lease requirement, but its accounted for completely differently from a capital asset related debt. This in turn keeps their credit rating top notch, etc.
Same thing for the cloud, no upfront capital investment along with not having to do super rigorous capacity planning. Instead of tying up cash or debt in datacenters or machines, they can use it for other things. Also, generally when you are buying you have to buy for capacity expansion as well that may or may not be required, while with something like AWS, if you need to expand or contract you can do it at will. So you can end up renting less hardware than you would have to get if you were buying and you get better credit rating/less debt load/more cash.
The downside is that you don't control the machines nor the data. There are still many companies/areas where not controlling the machine or data is basically verboten. Things like proprietary/confidential data are a no go for external cloud services. Getting the lawyers to sign off on putting say HIPPA data on the cloud would generally be rather difficult. Getting the lawyers to sign off on government data in the cloud would equally be hard. That's not to say you can't use cloud like systems but they just have to be self hosted which there is a large market for (an example is the NSA/CIA cloud that runs off the AWS stack but is hosted in a private cloud with strict security guidelines).
Certainly though I agree that EMC has to be basically a legacy play and doesn't seem to justify the costs.
I may have to revive this. Colo'd infrastructure (not build your own datacenter) v. cloud.
AWS, MSFT and Google are not just building a hosting platform though. They are building more and more application functionality. For example, DynamoDB is not a bare VM, it is a SaaS application.
TBH - I think there are a lot of companies that it is just easier to cloud v. DIY. How the big vendors will need to change from "what's your budget" high list / high discount selling to something that is better able to compete is the interesting part.
EMC to pay Dell $2 billion as breakup fee in go-shop period - Yahoo Finance
even more interesting article
even more interesting article