HP CEO Whitman: Dell-EMC Will 'Cause Chaos In The Channel'

Hewlett-Packard CEO Meg Whitman Monday morning told HP Enterprise employees that Dell's $67 billion acquisition of storage leader EMC is sure to cause a lot of pain for Dell-EMC channel partners.

"This move is going to cause chaos in the channel as they bring together two different programs and approaches," said Whitman in an email to HP Enterprise employees.

The channel angst will be exacerbated as Dell-EMC attempts to bring together two different product portfolios, said Whitman.

[Related: What Will A Merged Dell-EMC Look Like?]

"Bringing two portfolios together will require a significant amount of product rationalization, which will be disruptive to their business and create confusion for their customers," said Whitman. "Customers simply will not know if the products they are buying today from either company will be supported in 18 months."

Whitman said integrating EMC and Dell, with a combined $75 billion in sales and 200,000 employees, will be "a massive undertaking" and an enormous distraction for employees and their management teams as "two very different cultures come together, leadership teams shift and an entirely new strategy is developed."

Whitman also pointed to the $2.5 billion in debt Dell will pay in interest on $50 billion in debt as taking away from research and development and other "business-critical activities which will keep them from better serving their customers."

Whitman said the Dell-EMC deal is a "validation" of HP's decision to split in two. As of Nov. 1, Hewlett Packard Enterprise will officially be on its own with its own stock.

"I wanted to take a quick moment to tell you why I (and you should too) believe this is a good thing for Hewlett Packard Enterprise and an opportunity for us to seize the moment," said in the email. "This is validation for the strategy that we have laid out and I am not surprised that others would try to emulate it. But, the reality is that we are two years ahead of the game and it will be difficult for others to catch up."

The CEO of a CRN Solution Provider 500 company that partners with EMC, Dell and HP said there are likely to be integration issues but he is confident that Dell-EMC will be able to overcome them.

"Meg makes a lot of good points," said the CEO, who did not want to be identified for fear of alienating one of his key vendor partners."It is going to come down to how well they are able to integrate the companies. In the short term, there may be some chaos, but in the long term I think they will be successful merging them together."

PUBLISHED OCT. 12, 2015