Culture Clash Could Complicate Potential EMC Merger With HP, Dell

Should EMC buckle to investor pressure to sell its VMware business and then merge with a systems vendor or sell itself outright, the resulting combined company would be one riddled with corporate culture clashes, say solution providers who work closely with the companies.

That view of what might happen if EMC combined with a systems vendor came from channel partners in response to recent reports from The Wall Street Journal and Barron's that EMC held discussions with Hewlett-Packard and Dell about the possibility of combining with one of them either as a merger of equals or by being purchased outright.

Neither EMC, HP or Dell responded to requests for more information from CRN.

[Related: Do The Math: Investor Pressure Behind Possible EMC Merger, Acquisition]

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Despite pressures from investors who feel that pushing EMC to be acquired by or merge with a systems vendor, either as a whole including its 80 percent stake in VMware or after first selling that stake, such a move is far from certain given EMC's strong financial and market position.

However, just the thought of such a move stirs concerns among some channel partners who see a potential corporate clash when bringing EMC together with the systems vendors, some of which are currently major competitors to the storage market leader.

A move by EMC to merge with or acquire HP would reinforce Dell's strategy over the past couple of years of moving to become a major enterprise market player, said Sonia St. Charles, CEO of Davenport Group, a St. Paul, Minn.-based solution provider and longtime Dell partner.

However, there's much less certainty that the potential deal, which has been at the center of conversation among Dell partners since The Wall Street Journal first reported on it, could actually work from a cultural perspective, St. Charles told CRN.

"From a market-share perspective, it would change Dell significantly," she said. "But I'm not sure how it would culturally fit. How EMC and Dell do business, how they work with customers, is completely different. That's a significant hurdle to overcome. They have different marketing streams, different marketing."

From a pure business point of view, bringing storage market leader EMC into Dell would be a good move for Dell's storage business, said Michael Tanenhaus, principal at Mavenspire, an Annapolis, Md.-based solution provider and Dell partner.

NEXT: Messy Culture Issues, But Confusion Could Help The Channel

But in terms of corporate culture, such a merger would be hard, Mavenspire's Tanenhaus told CRN.

Customers are quickly moving to new solutions such as the cloud and hyper-converged infrastructure, Tanenhaus said. "With the vast majority of solutions for these trends, including Dell's, there is no centralized control of the storage part," he said. "But the EMC approach is centralized control."

There is also a big difference in the sales culture of the two, Tanenhaus said. "Dell focuses on end-to-end solutions," he said. "At EMC, the closest it comes to end-to-end solutions is VCE."

One Dell partner, who asked to remain anonymous, said that, in the event of a merger with EMC, Dell would finally get a sales team that truly understands how to sell storage.

However, that solution provider told CRN, corporate culture would be a real issue in bringing the two together.

"Dell's acquisition strategy to this point has been very good," the solution provider said. "Dell has bought a lot of good intellectual property. But this would be different. EMC would not be an intellectual property play, but a play for market share and customer base. This could be disruptive to everything we do."

Yet, while hoping such a deal never happens, the solution provider said the resulting confusion could benefit channel partners. "It could actually be good news for us," the solution provider said.

The CEO of a large HP and EMC partner, meanwhile, said an HP-EMC deal would create a cultural clash between the HP channel philosophy and the EMC channel philosophy.

"EMC buying HP would be like letting the fox into the chicken coop," the solution provider said. "It would be very difficult to try to merge the hyper-aggressive go-out-and-kill-something EMC culture with the HP culture. I just don’t know what would come of that."