Understanding The Significance Of Dell’s Acquisition Of EMC And The Emergence Of Dell Technologies

Dell and EMC intend to finalize the transaction whereby Dell acquires EMC on September 7, 2016. Under the terms of the acquisition, Dell and its owners Michael Dell, MSD Partners and Silver Lake, will acquire EMC Corporation. Meanwhile, EMC spin-off VMware will continue as a publicly traded company. The announcement to finalize Dell’s acquisition of EMC comes head on the heels of the receipt of regulatory approval for the transaction by China’s Ministry of Commerce after 98% of EMC shareholders approved the transaction on July 19. As a result of the merger of the two companies, EMC shareholders stand to receive $24.05 per share in addition to a tracking stock that represents their equity in VMware.  The newly created company, Dell Technologies, will operate immediately after the transaction is finalized. Dell’s acquisition of EMC signals the emergence of the “largest privately-controlled, integrated technology company” as noted in a press release. The confluence of Dell’s expertise in hardware and technology solutions for small businesses to mid-size organizations with EMC’s experience with enterprise customers, cloud computing solutions and security solutions means that Dell Technologies stands poised to benefit from the complementary synergies specific to the union of the two companies. The union of Dell and EMC promises to offer customers of Dell Technologies a rich portfolio of private cloud and big data solutions that draws upon an EMC corporate umbrella that includes Pivotal, Virtustream and VMware.

Expect the convergence of Dell’s experience with hardware and its relationship to small to mid-market companies, in conjunction with EMC’s storage, networking, cloud computing, big data and security solutions to enable Dell Technologies to offer enterprise-grade private cloud solutions geared toward the needs of small to mid-tier organizations as well as enterprises. Given EMC’s ownership of Pivotal and its concomitant specialties in big data analytics and the internet of things, the Dell-EMC merger has the potential to reshape the cloud computing landscape by giving Dell Technologies leadership in the hybrid cloud space while claiming Pivotal’s specialties in big data analytics and RSA’s suite of security solutions as further, notable feathers in its cap. Overall, the landscape for hybrid cloud computing stands to gain another significant player that has the means to tap into Dell’s relationships with small to mid-size companies that are increasingly ramping up their transition to the hybrid cloud. Moreover, with Pivotal under its wing, Dell Technologies promises to democratize big data and internet of things analytics by spearheading big adoption and developing progressively turnkey approaches to big data analysis. The implications of the Dell-EMC merger for the cloud computing landscape are huge, particularly in light of Rackspace’s recent acquisition by Apollo Global Management and the subsequent opportunity created in the private cloud market while Apollo Global Management and Rackspace recalibrate their long-term strategy.