Partners Would Welcome EMC Deal With HP Or Dell

Solution providers Monday said they would welcome a potential merger between storage giant EMC and either Dell or Hewlett-Packard.

The solution providers were commenting on a Wall Street Journal report that EMC, under pressure from an activist investor and facing the potential retirement of CEO Joe Tucci, had held merger and acquisition discussions with both HP and Dell.

[Related: EMC's Tucci Addresses Question Of Potential VMware Spinoff On Q2 Financial Call ]

EMC, HP and Dell have all refused to comment on the report.

id
unit-1659132512259
type
Sponsored post

"I think it would be a great deal for either HP or Dell," said Bob Venero, CEO of Future Tech Enterprise, a Holbrook, N.Y., enterprise IT solution provider, No. 211 on the CRN 2014 Solution Provider 500 list and a partner with EMC, HP and Dell. "You would be buying a great customer base with a lot of loyalty. I think it would be a smart play for either HP or Dell to absorb EMC."

Venero was one of several solution providers who said the deal would allow them to put more muscle behind a larger vendor with a deep infrastructure portfolio vs. having to spread out certifications and investments across multiple vendors.

Douglas Grosfield, president and CEO of Xylotek Solutions, Cambridge Ontario, said he would welcome a deal by Dell to buy EMC.

"If the merger were to happen, I would prefer it if Dell made that leap," said Grosfield. "Dell has really made major leaps forward in the last couple of years in terms of their understanding of the channel market and the relationship they have to have with us as a VAR."

An EMC/Dell deal would "really simplify things for Dell partners to see an ease of the process for accessing the EMC product line," said Grosfield.

NEXT: EMC Deal With Dell Would Give Dell An Enterprise Edge Vs. HP

A CEO for a large Dell enterprise partner, who did not want to be identified, said he sees a potential EMC-Dell deal as giving Dell a big boost in winning over enterprise accounts vs. rival HP. "Scooping up EMC's legacy storage business would be a great fit for Dell's storage portfolio, allowing them to crack the Global 500 market where it's struggling to gain traction," said the CEO. "Nobody ever gets fired for buying EMC storage."

The CEO said there has been speculation for some time within the channel that EMC was looking to split off its software business from its legacy storage hardware business."From EMC's perspective, it has had an extremely hard time winning the SMB market,’ he added. ’Under Dell's control, I could see a lot of EMC partners selling EqualLogic and Compellent."

As for the impact on VMware, Xylotek's Grosfield said he sees VMware as a stand-alone entity. "VMware stands alone," he said, commenting on EMC's 80 percent ownership stake in VMware. "They rule the virtualization space and they pretty much always have. I don't see that changing in the near future. It might be a good time for them to stand alone entirely and, as a VMware partner, I think regardless of which way they go, I don't think it would have an adverse effect on us, or any material effect, for that matter."

Venero said it remains unclear if such a large deal could be pulled off by either HP or Dell. That said, he views continued consolidation in the technology market as inevitable.

The Wall Street Journal report that EMC held talks with HP and Dell comes after hedge fund Elliott Management bought a stake in EMC last July. It also comes with longtime EMC CEO Tucci set to retire early next year.

EMC and its board of directors have yet to name a successor.

The only word from EMC on Tucci's retirement is a 2012 proxy statement that said the company had entered into an "employment arrangement with Mr. Tucci to remain with the Company through at least February 2015."

KRISTIN BENT & TOM SPRING contributed to this story.

PUBLISHED SEPT. 22, 2014