Search
Homepage This page's url is: -crn- Rankings and Research Companies Channelcast Marketing Matters CRNtv Events WOTC Jobs HPE Discover 2019 News Cisco Wi-Fi 6 Newsroom Dell Technologies Newsroom Hitachi Vantara Newsroom HP Reinvent Newsroom Lenovo Newsroom Nutanix Newsroom Cisco Live Newsroom HPE Zone Tech Provider Zone

Go Big, Win Big: Dell Technologies And Its Partners Gear Up For Growth

What started out as a call between Dell CEO Michael Dell and CEO Joe Tucci resulted in the largest merger in the history of the IT industry. And now Dell Technologies partners are predicting balance-sheet-busting growth and capitalizing on the opportunity to sell lucrative new product lines.

The seeds of the biggest merger in the history of IT were sown in a friendship that began 22 years ago between Michael Dell and Joe Tucci.

"I've known Joe since 1994 -- way before he went to EMC," said Dell Technologies founder and CEO Michael Dell, recalling the start of the relationship with former EMC president and CEO Tucci that has forever changed the enterprise IT landscape.

"He's been a great friend and somebody I've always trusted and admired. He continues to help me and the company. He's just a great person."



The creation of Dell Technologies -- a $74 billion global IT powerhouse and the largest privately held technology firm in the world -- was a long time coming, a process that can be traced back to the turn of the millennium, Michael Dell said.

[Related: CRN Exclusive: Dell Technologies CEO Michael Dell On Growing The Dell EMC Channel, The Importance Of Scale And His Vision For The Industry's Future]

In 2001, EMC and Dell created an alliance that would last 10 years. Then, in 2009 toward the end of that partnership, members of the boards of Dell and EMC met to discuss a possible merger that failed, at that time, to materialize. Later, in 2014, Michael Dell placed a fateful phone call to his friend Tucci that ultimately led to the close on Sept. 7 of Dell's $58 billion acquisition of EMC.

"How did I feel on Sept. 7? Tremendously excited. Magically energized," Dell said. "What we're doing is epic, it's legendary. Having said all that, it doesn't happen all by itself. We have a lot of work to do, and it's just the very first day of our new company. We're humbled by the responsibility that we have to customers, to our partners, to our 140,000 team members we have in the company. When you think about the world impact the company has, we're humbled by that. We're very energized by what we're doing."

What Dell is doing is creating a global IT conglomerate that stitches together Dell and its family of companies with EMC and the businesses that made up its "Federation," including virtualization kingpin VMware, RSA, Pivotal and Virtustream, not to mention converged and hyper-converged infrastructure powerhouse VCE.

Under the Dell Technologies umbrella, the PC, or "client" business is known simply as Dell while the enterprise business is called Dell EMC.

The blockbuster merger is a flag in the ground for Michael Dell's vision of what his company should be: a global IT firm that is both large and nimble and can take advantage of its scale to provide products and services from the individual consumer to the very largest data centers in the world, all while maintaining its commitment to innovation. Dell, who started the company that bears his name from a dorm room at the University of Texas in 1984, hasn't been shy about the company's "Go Big, Win Big" mantra.

That vision runs counter to that of key competitors, namely Hewlett-Packard, which took the opposite approach when it split into two separate companies last year: HP Inc., the company that sells PCs and printers, and Hewlett Packard Enterprise (HPE), which sells enterprise infrastructure.


At one time, HP was said to have considered acquiring EMC, but since its split, HPE CEO Meg Whitman has criticized the Dell-EMC merger, saying it will make the resulting company slower and less nimble, while HPE has the ability to move quickly and stay ahead of industry trends.

The merger meant Dell had to take on about $47 billion in debt, a move some might see as risky, but the company's CEO said he's not bothered by it.

"Risk is in the eye of the beholder. Maybe my appetite for risk is different from somebody else's. That's fine. I don't care," said Dell.

"We've got tremendous ability in innovation in solving customer problems, and we're more relevant and innovative than ever before," he said when asked why he believes his EMC bet will pay off. "I've been all over the world talking to the largest customers, the smallest customers, the partners of all sizes. The reaction to this combination, the creation of Dell Technologies, is overwhelmingly positive from customers and partners. We've got competitors that aren't that happy, but it's overwhelmingly positive."

Marius Haas, Dell Technologies' president and chief commercial officer, said HPE has misread the infrastructure market.

"The customer is looking for fewer technology partners, not more. The customer is not looking to become the systems integrator of the different solutions that are in the market," Haas said.

The new Dell Technologies' capabilities are beyond compare, he added.

"No one has the broad range of capabilities that we have as Dell Technologies. Customers are naturally going to gravitate toward the partners they can trust, the technology providers they can trust, and the ones that will provide them with the broadest range of capabilities. If you want to pick on one competitor, one that claims to get smaller and nimbler, the problem is their business is getting smaller as well. Every line of business is declining. It's a testament that maybe customers are not looking to go in that direction because they're only answering a few of the questions that the customers are trying to solve. In our case, clearly we're going in a different direction.

"Dell Technologies' portfolio "is second to none in the industry in being able to address almost all -- if not all – of the core technology trends that are important and relevant to our customer base. It's our job to bring that together in a way that is clear in how it solves business problems for our customers in conjunction with our partners in delivering that," Haas said.

The combined Dell-EMC sells to 98 percent of the Fortune 500, spends $4.5 billion on research and development annually, does business in more than 180 countries and is in a leadership position in 20 of research firm Gartner's Magic Quadrants, the company said.


Dell Technologies will demonstrate the full force of its enterprise prowess with a number of product launches at what is being billed as the biggest enterprise technology event of the year -- Dell EMC World, which takes place Oct. 18-20 in Austin, Texas.

Michael Dell is far from the only one feeling energized about the potential for Dell EMC. The company's channel partners say they're hiring at an unprecedented pace, predicting balance-sheet-busting growth and capitalizing on the opportunity to sell lucrative new product lines.

Scott Winslow, president of Winslow Technology Group, a Waltham, Mass.-based solution provider that has been all-in with Dell, said that before the merger his biggest competition was EMC. Now, he's forecasting significant growth in both headcount and revenue as he aggressively takes on EMC's enterprise storage product lines.

Winslow Technology Group's growth before the merger was already 25 percent to 30 percent annually. Winslow said he expects that number to jump to 40 percent, and he's not waiting around for that to happen. Winslow Technology Group has hired 10 people over the past 10 months, increasing its headcount by a third.

Winslow Technology Group has also begun selling EMC's hyper-convergence portfolio, he said. "It's all going to start with hyper-converged. Blocks, racks and rails. We've already sold one of each of these in the last 90 days, so we've been successful already. EMC used to be our primary competition, but what's strategic for Dell and good for our EMC brethren is compute."

Likewise, Dan Serpico, CEO of FusionStorm, a large San Francisco-based solution provider that already worked with both Dell and EMC, said his Dell business has grown significantly in recent years and his EMC business is poised for much greater growth now that the company is privately held and not doing battle with activist investors like Elliott Management. The firm waged a high-profile campaign in 2015 for increased shareholder value up until the merger was announced.

"Our Dell-only business has gone from $1 million to $140 million in five years," Serpico said. "Our EMC business hasn't had that same growth, but the opportunity there is very significant, particularly because one of the real advantages is that they eliminate the challenges and lack of focus they had because of Elliott Management. They get to focus on go-to-market strategy, their partner community, R&D. ... I see a return to where EMC was before, and it's an enormous opportunity."

On the Dell side, Serpico said servers are likely to drive growth in the coming years. "The growth opportunity around servers over the next three years is something like $11 billion, that's a 12 percent CAGR. You have to be making sure you understand what that opportunity is, or what Dell thinks that opportunity is. It requires us as partners to change our thinking. Servers have typically been lower-margin opportunities for us.

"The collaborative business, the fully integrated stack that complements the EMC-Dell merger, is something we fully expect to take advantage of," Serpico said. "There's a very real market appetite for integrated solutions, and that's why you're seeing integrated solutions becoming a bigger part of today's offering, whether it's large partners like us, or [distributors]. Some of it is around holistic stacks like what Dell and EMC can offer, or drawing from a wide variety of technologies. It's becoming a bigger opportunity."


Serpico said Dell EMC World is the perfect place to begin taking advantage of those opportunities.

"I'm trying to help position FusionStorm internally by leveraging the relationships we have. We've been very successful in that landscape," Serpico said.

"Partners need to go meet people, and not just Michael [Dell]. Dell EMC World becomes a very important opportunity for them. They should be meeting other people. Those relationships need to be deeper and broader. [Dell] has bigger fish to fry. There are people in the trenches that are very important to partners' success, and striking up that relationship has real value. Even as CEO, I have relationships with their people, not just [Dell EMC President of Enterprise Sales] Billy Scannell, or the regional leaders, but the regional sales team. Those things are very important. You have to do that, and your team has to do that."

Michael Tanenhaus, CEO of Mavenspire, a large Dell solution provider based in Annapolis, Md., said he's already started the process of meeting Dell EMC leadership and trying to get to know all the key players.

"We expect massive growth just because of the variety of ways to go to market, and the variety of solutions we have," Tanenhaus said. "We've experienced near-triple digit growth, and we expect not to move away from that. There's a lot of opportunity to talk about what's new and different. That lands us opportunities."

For now, Mavenspire is focusing on integrating EMC technology that's easy to bring into the fold, according to Tanenhaus, beginning with VxRail and other hyper-convergence solutions.

"There are immediate technologies that make a lot of sense for our organization. They're very easy to integrate into the story," Tanenhaus said. "VxRail, hyper-converged technology. Doing data center architectures. That's a very hot concept. VMware as a company is a dominant player in the virtualization space. That's pretty easy, especially because we've sold Nutanix and Pivot3 and other solutions.

"Isilon is pretty easily positioned as a NAS-based platform that you scale out as you need. It's very similar to the Dell SC [Series storage] story. Those things are very natural. There are things in the data protection unit that are very natural. Cloud and OpenStack are also pretty natural. Then you can pull in tech from Pivotal, which we're already into training on, and those are the easy first steps. It's been interesting to recognize where they will position them. If you have a ready solution you don't have to integrate, it's an easy conversation. You can do that with hyperconverged, now you can do it with cloud, and it's easy to tell a story and work with a client on what their real need is, and that's very valuable," he said.

Dell's Haas said Dell EMC will open new doors for solution providers.

"When I talk to partners, partners have a specific key differentiation they're investing in. We're offering the opportunity to complement what they're looking to do with the broadest range of capabilities, and enabling them to go hunt for new incremental business together with us," Haas said. "It's a very strong value proposition."

Michael Dell, for his part, said the size and scale that Dell Technologies is bringing to partners and customers with $4.5 billion in annual R&D matters greatly in the cloud era. "You see that in the level of innovation coming out of Dell-EMC-VMware," he said. "That's what it's all about. Innovation, customer impact."

Back to Top

Video

 

sponsored resources