Michael Dell: Dell-EMC-VMware Is A 'Dream Combination' To Drive Growth

Michael Dell called the planned $67 billion acquisition of EMC a "dream combination," with VMware and VCE keys to unlocking growth and scale for Dell to dominate the IT data center of today and tomorrow. During an interview on Bloomberg Wednesday from Dell World, the founder and CEO said the deal makes the Round Rock, Texas-based company "extremely well positioned for the IT of tomorrow."

"Most of what we are doing in the combination of Dell and EMC is about growth and revenue synergies," Dell said. He acknowledged in the interview cost synergies that will lead to layoffs, but stressed that revenue synergies with the EMC deal are three times greater than costs.

"With the combination of Dell and EMC, we have two highly complementary businesses," Dell told Bloomberg. "We become a leader in today’s current domain of IT -- from servers, storage, virtualization and PCs."

[Related: CRN's Coverage Of Dell World 2015]

Sponsored post

Stephen Monteros, vice president, business development and strategy, at SigmaNet, a Dell and EMC partner based in Greenbelt, Md., said Dell has set the table for success, providing new firepower and channel enterprise reach that would impact sales and profit going forward. In the interim, he said he believes Dell has a long road ahead absorbing EMC and its federation of VMware, VCE, RSA and others.

"Is Dell and EMC a dream combination? It will be when it works. Right now it’s a good combination," Monteros said.

Dell and EMC are extremely well positioned to offer solutions as the IT industry continues its "digital transformation" toward one that stresses hardware but also converged infrastructure, software-defined data centers and hybrid cloud, Dell told Bloomberg. ’EMC is well known for architecting solutions with the very top companies in the world. And Dell has incredible reach and breadth across businesses of all sizes around the globe. We bring together highly complementary go-to-market solutions,’ Dell said.

Dell’s comments come as VMware’s stock continues to be punished by investors. VMware shares plunged by as much as 14 points, or 20 percent Wednesday, compared to an earlier high of $59.90 a share. When asked about VMware’s importance to the EMC acquisition, Dell said virtualization is critical to the mega-deal.

Virtualization is software, and software research and development are key aspects of VMware, Dell said. ’When you build these ultra-powerful hyper-converged systems, there is an enormous amount of software that goes into those solutions,’ Dell said. With EMC, Dell acquires ’incredible software from VMware, Pivotal, RSA, Virtustream and VCE,’ he said.

Dell’s pending acquisition of EMC creates an IT juggernaut enabling Dell, the No. 2 server maker according to research firm IDC, to leverage EMC's dominance in the storage market, setting up the company to take on rivals Hewlett-Packard, Cisco Systems and Oracle. So how does Michael Dell feel about becoming larger as companies such as HP are splitting up?

’This is a business where scale matters. We have grown up in this industry and see the power of scale,’ Dell said. ’If you look at what goes into the data center it is microprocessors, memory and storage. Those are the same main ingredients you find in client systems, in the Internet of Things, the explosion of devices. That’s where scale matters. And when you have an explosion of devices, the connections between all of those nodes and the data center becomes even more important.’

The difference between Dell and HP, or any other public company, is that Dell is not beholden to activist investors or the expectations of shareholders, Dell said, calling it "the 90-day shot clock."

"As a partner working with a private Dell, it gives me a lot of confidence that the company is making the right IT decisions and not ones based on demanding investors," said Monteros.