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

VMware: Life after EMC

When EMC acquired VMware in 2007 waves were made in the technology world, primarily in the server sector.  VMware, after all, was by far the best in show when it came to cloud and virtualisation software and services.  It was a no brainer for EMC, who is a prominent player in the server build space.  The acquisition made EMC a power player in the cloud and virtual space overnight.  But in August of 2016 another such momentous occasion took place.  EMC bolstered by its VMware arm came face to face with one of the tech world’s biggest giants; Dell.

 

Dell has had a storied rise in both business and popularity ever since it was conceived by its owner and founder, Michael Dell.  After a 3-year hiatus from the company, Dell (the man) returned as the head of Dell in 2007 and the company has been on an upward trajectory ever since.  Dell (the company) has basically revolutionised the way consumers and businesses looked at their computer hardware.  Giving their customers the ability to customise their machines in the most hassle free way possible.  This, along with strategic partnerships, advanced marketing techniques and overhauling distribution practices, catapulted the company into the hardware giant it is today.  That’s why the $67 billion (USD) merger of Dell and EMC (the largest in history) is so significant.

 

More than just the mind-boggling dollar figure, the merger turned the hardware giant in Dell into a cloud and virtualisation powerhouse overnight, in a move reminiscent of EMC’s initial acquisition of VMware just under a decade ago.  The banner of EMC2 fell on September 27, 2016 and has forever been replaced by the trademark Dell’s logo, but what does this merger mean for the future of VMware, and more importantly what role will it play in Dell’s current environment?

 

 

According to both entities, the future is brighter for both VMware and Dell, that is after the initial hysteria and uncertainty.  Stock prices of both companies fluctuated significantly once the merger was announced.  Employees, managers and shareholders were unsure of what was to come next.  However, as the hours and days passed, official news and plans were revealed regarding the direction of both companies, and the market seemed to react positively.  Stock prices climbed back up and, if the trend holds, will surpass the pre-merger price in the coming months ahead.

 

For VMware, flying under the banner of Dell gives them much needed stability and reach.  Keep in mind, that VMware is a relatively young company when compared to the likes of EMC, Dell and Microsoft.  It has undergone and, in some case still is undergoing, growing pains.  With Dell’s guidance and backing, VMware can focus on growth and development without having to worry too much about mitigating the risk of both.  Dell’s enormous rolodex of clients (which is continuously growing thanks to Dell’s business development efforts) has been opened to VMware which exponentially increases their reach.  Remember that VMware is already in a class all its own when it comes to cloud and virtualisation services and this merger basically makes them almost untouchable.  Almost.  VMware CEO, Pat Gelsinger, was quick to admit that the only other competition out there is Microsoft with their Azure Stack fronted by Hyper-V.

 

But herein lies the rub.  Critics of the merger view Dell’s inextricable history with Microsoft as a potential for VMware’s downfall.  Almost since it started shipping out PC’s Dell has loaded them with Microsoft software.  For decades this has been standard operating procedure with each Dell box, laptop and server being powered or touched in some way by Microsoft.  Where then will Dell’s allegiance lie?  With its own product in VMware or with the company that it has partnered with for so long in Microsoft?

 

When it comes to server virtualisation it is almost an open and shut case with VMware dominating the market.  However, the emergence of the cloud space created a wrinkle in what was VMware’s absolute reign.  Microsoft’s cloud solution Azure is, for lack of a better term, blowing VMware’s solution, vCloud Air, out of the water.  To add fuel and confusion to the fire, Microsoft’s own CEO, Satya Nadella, posted a video stating that he acknowledges the merger but is looking forward to the continuous partnership that Dell and Microsoft has forged over the decades.  He also adds that Microsoft looks forward to expanding its cloud business with Dell.  In school yard parlance, they be fighting words.

 

So who does Dell ultimately side with.  With the merger, Dell now has a vested interest in the success of VMware.  However, in Microsoft resides a partnership spanning decades in which both companies have benefitted greatly.  VMware management has already stated that the merger will see a greater integration of VMware technology into Dell machines, but this will put Dell directly at odds with their decades long bedfellow in Microsoft.  The ball it seems is in Dell’s court, whether they like it or not.  Who will they back and who will they shun?  Turning their backs on Microsoft’s cloud solution may sour their relationship with software giant, but then again there are no “take-backs” when $67 billion worth of assets has already changed hands.

 

Pundits may argue that Dell may have got a bit more than they bargained for when they inked the EMC merger.  However, one thing is for certain, Dell got a bargain.  Oracle’s chairman Larry Ellison showed a bit of envy when discussing the merger, mentioning that were not Oracle already in the midst of developing their own cloud solution that they would have tried to outbid Dell to acquire EMC and VMware.  Dell and Ellison both believe that the acquisition was both logically and fiscally sound, and that the investment is very much worth it.  Dell is no longer the hardware giant of old.  With the undeniable might and power that it now possesses with the acquisition of VMware it has been transformed into a titan, something that is not often seen in any industry.

 

This article was contributed by David Share from Amazing Support. They provide IT Support in London and surrounding areas.