Venture Capitalist: Dell-EMC Deal Spells 'Turmoil' for Channel, Customers

/**/ /**/

Dell’s decision to acquire EMC has been heralded as the biggest tech deal in history, but venture capitalist and enterprise expert Chris Lynch said that’s not to EMC’s advantage.

Lynch spent significant time at Cisco, HP, and Vertica before jumping into the tech investment world at Accomplice (formerly part of Atlas Ventures).

’I think that Dell, as a company, doesn’t have the strategic girth of EMC and the EMC executive team, and my concern is that it’s a good deal for Dell, but not necessarily for EMC’s investors, and for the channel, and for customers who are going to go through a lot of turmoil as the company is absorbed by Dell,’ Lynch told CRNtv.

Lynch predicted a ’clash of cultures’ between the two companies, and that the size of the deal itself will be a major distraction from actual innovation. He also forecasted an exodus of talent from EMC as the deal continues to play out.

The former HP vice president used HP as an example of why mergers of this magnitude fail. He pointed to HP’s M&A strategy before the company’s decision to split into two.

’One way to think about it is, the messaging that you’re getting from Dell and EMC on the Dell and EMC deal is the opposite of what you’re hearing from HP. So HP is saying ’we’re going to be leaner, meaner and more efficient by breaking up,’ and Dell’s saying ’we’re going to be better and greater by aggregating more assets.’ And it’s sort of inconsistent.’

’If history is a predictor of the future, it didn’t work out for HP,’ he said.

PUBLISHED OCT. 19, 2015