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Dell-EMC Deal Spells Risk and Uncertainty for OEMs

AudreyCox

"If you take two declining companies and put them together, they still remain two declining companies that will decline faster together. There is just going to be a ton of uncertainty. Regardless of any strategy, any execution, one thing is undeniable: All the focus of Dell-EMC for the next 18 to 24 months will be inward, not on their customers, not on their partners." This statement echo concerns expressed by industry analysts like Gartner’s Werner Zurcher, who told Information Week “the merger is likely to divert management attention from customer concerns and market dynamics for the next two years, or longer.” 

Integrating Dell and EMC will undoubtedly be a highly complex and disruptive undertaking. And OEMs are certain to be caught in the wake.  Dell and EMC have already shed assets and eliminated workers in advance of the merger. As a recent AustinInno article points out, “…there are likely to be a lot of redundancies that will lead to layoffs. EMC has already announced it is laying off people as part of a restructuring plan ahead of the deal. Dell has sold off and IPOed major assets it acquired over the past decade, such as Perot Systems and SecureWorks. But as the companies continue to align their businesses, it is likely we'll see more positions eliminated. Securities filings by EMC indicate layoffs are ongoing and will continue through the end of 2016.”

 

Asset Sales, Roadmap Changes and Product EOLs may Impact OEMs

Many Dell and EMC OEMs are concerned corporate restructurings, asset sales and product retirements will impact business.  With all the organizational chaos, product teams may lose focus and slip product roadmaps, forcing OEMs to delay programs and break customer commitments.   Worse still, many OEMs fear the products they are selling today could be discontinued or sold off to other vendors in the coming months.  And with good reason; Dell continues to shed assets to finance the acquisition.  In June the Wall Street Journal reported the company sold Dell Software Group, which provides advanced analytics, security and management software critical for major OEM opportunities like IoT.

 

Make the Move to Hewlett Packard Enterprise

Do you use Dell, EMC or VCE gear in your solutions?  Now is the perfect time to add HPE server, storage and networking products to your portfolio.  HPE delivers the stable platforms, dedicated engineering resources, and global distribution partners and support you need to succeed.   Avoid the Dell-EMC chaos with Hewlett Packard Enterprise!

 

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AudreyCox

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