Dell’s New Virtual Arm

Dell-VMware-acquisition

Dell has never been one to shy away from making bold moves.  The computer hardware giant basically rewrote the rules when it came for businesses and even individual consumers to purchase new devices.  Its long time standing CEO, Michael Dell, basically built the company from the ground up and in the middle of the Lone Star state no less.  As the years rolled on and the adoption of computers began its sharp incline throughout the world the company grew and grew.  At one point, Dell employed more than 100,000 people across the globe.  Dell was instrumental in bringing computers to the masses and gave corporations a convenient way to refresh their machines.  Partnering with the likes of Microsoft, they were able to deliver fully built devices that were ready to be powered on and hit the ground running.

 

With the success of the PC hardware sales, Dell soon expanded into servers, network switches and storage devices in the mid 1990’s.  For several years Dell PowerEdge servers, loaded with Windows NT, dominated the marketplace.  More cost efficient than its closest competitors, the PowerEdge was the go to server solution for many companies throughout its reign.  Fast forward a decade or so and Dell (along with its partner Microsoft) were faced with an upstart from the northeast.

 

On its own VMware, regarded as the best virtual server provider in its time, was a force to be reckoned with.  It made the biggest splash just as the virtual server sector was in its infancy.  Its solutions were elegant, simple and easily adapted to the systems and strategies of many a corporation.  The whole IT industry was abuzz when EMC2, a prominent server builder from New England, acquired VMware in 2007.  This made EMC into a server powerhouse and was quickly put on Dell’s radar.

 

For almost a decade the two companies enjoyed a friendly rivalry in the server and virtual server space (at this point Microsoft launched their own, albeit floundering, virtual server solution).  This continued until August of 2016, when a momentous occasion took place, Dell and EMC merged.  Some in the industry say that it was inevitable, while some cannot believe that the two powerhouses actually went ahead and did it.  The merger was a $67 billion (USD) affair, the largest in history with the banner of EMC forever lowered on September 27, 2016, and being absorbed into the Dell brand.  After reeling from the shock and awe that came from the deal, insiders were quick to set their sights on EMCs prized possession, VMware, and its role in Dell.

 

Initial reports from both sides of the table seem to be positive.  Before the merger, EMC left VMware to virtually operate as its own entity.  This was a good thing, as it allowed the company and its solutions to develop organically and untainted by outside influences.  However, it seemed that the last couple of years were a bit tough on the books due to the financial instability that EMC was suffering.  Therefore, VMware management was ecstatic when the merger was inked as it has the possibility to give them much needed stability and more importantly, Dell’s legions of customers and partners allows them to increase their reach by many folds over.

 

For Dell, the benefits could not be clearer.  By merging with EMC and, in effect acquiring VMware, they have solidified their dominance in both the physical and virtual server space.  It seems to almost all that there is nothing but clear skies ahead for both Dell and VMware, but there is a storm brewing in the horizon and it should not be dismissed.  Remember that Dell and Microsoft has forged a strong, almost brotherly, bond over the decades.  Well, Microsoft directly competes with VMware with its Azure Stack fronted with Hyper-V, as VMware’s CEO, Pat Gelsinger, was quick to note.  This puts Dell in a bit of a predicament.  The ink hasn’t even dried yet on this $67 billion deal and your new virtual arm is already at odds with your longtime friend and ally.  The kicker is that Microsoft shows no signs of backing down or acquiescing to VMware.  Many believe that this is due to their veritable ace in the hole, the Cloud.

 

While virtual servers have been around for nearly two decades, the rise of Cloud services and Cloud solutions is relatively new.  However, with the pace of adoption at an all-time high, more and more corporations and consumers are looking towards the Cloud at an accelerated rate.  VMware’s cloud solution, vCloud Air, is (to put it nicely) lacking.  Microsoft’s Azure, however, is thriving rather well.  Microsoft is, afterall, Microsoft, they are a titan in their own right and are not afraid to throw around their weight, as is evident by the video that was released by Satya Nadella, the CEO of Microsoft.  In this video, Nadella acknowledges the merger but goes on to say that it has enjoyed it partnership with Dell and doesn’t expect things to change.  Indeed, according to Nadella, Microsoft is looking forward to the expansion of its cloud solutions within Dell.

 

No one really knows when the storm will hit but at some point Dell will have to make a critical choice.  Should they choose to back VMware (for which they spent several billion dollars to acquire) they may jeopardise a decades long partnership with one of the biggest names in the industry in Microsoft.  Only time will tell, but for now all parties seems to be in good spirits and are eagerly awaiting the rewards of this merger.  The acquisition of EMC and VMware has allowed Dell to shed its old mantle of “hardware giant”.  It is now capable of so much more.  It has become a titan of the industry.  Such is the advantage that VMware brings to the table that even Larry Ellison, Oracle’s chairman, confided that were Oracle not already developing its own cloud solution, it would have competed with Dell for the control of VMware.

 

Article by David Share from Amazing Support