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What does the Dell takeover of EMC mean for VMware?

Two of the largest hardware vendors have agreed to merge, but where does that leave the biggest name in virtualization?

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Chronicling the Dell-EMC merger news

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The rumors of EMC shopping around for a buyer finally came to fruition last week when Dell announced it had agreed to buy the storage giant. The mammoth deal in which Dell will pay $67 billion for EMC has turned many heads and has customers asking how it will affect them. Of particular concern is the future of VMware, the virtualization company in which EMC owned an 81% stake. So, this month we're asking our Advisory Board members what they think of the Dell takeover deal and how they expect it would affect VMware and VMware customers.

Brian Kirsch, Milwaukee Area Technical College

With the introduction of virtualization, many hardware companies had to rethink business models and revenue streams. Gone are the days of endless hardware sales and upgrades. Few companies were affected more than Dell and HP. While HP is currently in the midst of a split for various reasons, Dell took a different approach – focusing more on acquisitions. Over the past years, Dell has purchased Quest, Wyse and now EMC in what would appear as an effort to bolster its virtualization market share.

With the purchase of EMC, Dell has also gained the grandfather of virtualization in VMware. While no one would doubt the technology and innovation that VMware has shown over the years, the real crown jewel might be its foresight into the data center. Over the years, VMware has shown an insight into where the data center is going rather than where it was or currently is. This strategic vision has not been hardware-focused but a software-centric approach. Many would say VMware was late to the hyperconverged market with EVO:RAIL when compared Nutanix. However, in all fairness, the hardware architecture was never something VMware has focused on.

The vision for the software-defined data center never included hardware specifications. When you look at VMware’s latest efforts with software-defined networking, it doesn't come with a VMware hardware platform. However, hardware platforms and partnerships do seem to be one of Dell’s strengths. EMC was too storage focused for VMware, but when you combine Dell’s server platforms with Wyse thin clients and EMC storage under a VMware software umbrella, you start to see a complete data center picture. With traditional data centers the only piece of the puzzle that is missing might be the networking, but maybe that piece is already in place with NSX.

  All of this is best case, with consolidation, layoffs or spinoffs possible, this will be a turbulent time for what is now one of the world's largest technology companies. VMware has already had its challenges with Amazon Web Services and Nutanix, so will VMware’s vision be lost as Dell tries to integrate and stay connected to it’s customers? Only time will tell. Unfortunately, that time is limited as Amazon Web Services continues its march to putting the traditional data enter out to pasture.

Christian Mohn, EVRY Consulting

So, Dell is taking over EMC, and therefor  gaining control over VMware. I'm not going to pretend that I understand the financials of the deal, nor even acknowledge that I've tried to understand what tracking stock is. However, I do understand that this is a huge deal.

I don't think that this deal will have any immediate impact on VMware at all. By all accounts, VMware will continue to operate on its own, and do its own thing, much like it has been while being controlled by EMC. After all, VMware came up with VSAN –  a direct competitor to EMC's "traditional" storage offerings – while  under the EMC federation umbrella. It would be downright stupid of Dell to not continue down the path of the software-defined data center that VMware has laid out, as it would undermine a huge part of the reasoning behind buying EMC in the first place. My gut feeling is that VMware will be allowed to continue to innovate, and bring potentially disruptive technologies to market, even if it means its software will be competing with Dell hardware. 

The Dell takeover is huge. Things are going to change, as the Dell and EMC organizations and products are consolidated. Dell and EMC's rivals are going to use this to spread the normal fear, uncertainty and doubt, and try to use it to their advantage. But, as far as VMware goes, I don't think this changes a single thing. If anything, it might even make VMware more autonomous than it has been since the EMC acquisition in 2004. Perhaps Dell will sell or spin it out on its own, to help reduce the debt acquired when taking over EMC. That might be wishful thinking, but I really hope that is the case.

  Maish Saidel-Keesing, Cisco Video Technologies Israel

It was bound to happen, and it finally did. Someone has acquired EMC. There were talks about HP a while back, but it seems that Dell now has won the prize.

  There has been a lot of speculation about whether this is good for EMC, if this is good for Dell and even if this is good for VMware. 

  I would like to look at this question from the perspective of  the customer. 

  Big Dell customers will only benefit from this move. They will have more options and offerings in the future that will make a compelling case and an all-inclusive solution from the new Dell mothership is an interesting potential future offering. Think VCE, but this time they have the whole stack: compute, storage and hypervisor. I expect we will see some news in the EVO family (RAIL/RACK) offerings in the future.

  EMC customers will see some consolidation. There are some similar (or overlapping) storage offerings between Dell and EMC, and it remains to be seen which solutions will survive and how this will influence the storage market.

  In the short term, VMware customers won't see much change.. VMware executives have a vision of where they want the company to go and where they want to lead. As a customer, this acquisition will likely not have much effect on me. For the long term, unfortunately I think it is too soon to say. There will undoubtedly be some opportunities for consolidation or reorganization. As most of us all know, when there is a new boss in town, things will change.

  The technology space is never boring. Change is the only constant.

Next Steps

The Dell takeover of EMC is not without risk

Can Dell rescue spiraling software sales?

How the Dell takeover might affect VMware's EUC business

This was last published in October 2015

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How do you think the Dell takeover of EMC will affect VMware?
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The complication of VMware being owned by Dell is that it's long been platform-agnostic, and how true is that going to be once Dell owns it?
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