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Proposed Dell-EMC merger leaves customers divided

Proposed Dell-EMC merger leaves customers divided
Analysts: Dan Harrington, Michelle Bailey, Simon Robinson


Almost all of the attention paid to the record-setting $63bn deal by Dell to acquire EMC yesterday focused on financial details. But what really matters is how their customers react to this news, and whether they believe Dell can meet their organizational needs long-term. In general, customer perception is encouraging: 31% of IT decision-makers describe the acquisition as a positive move, compared to 20% that see it in a negative light. Dell customers are particularly positive about the deal; however, there are strong concerns among the EMC customer base. More than 40% of EMC-only customers (those that currently buy no products from Dell but do buy from EMC) have a negative impression of the acquisition, compared to just 15% of Dell customers. These findings are based on the opinions of 447 enterprise IT decision-makers – part of 451 Research's Voice of the Enterprise community – polled less than 24 hours after the announcement.
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Deal Analysis: In massive play for storage and more, Dell bets $63.1bn on EMC to reshape IT landscape

Deal Analysis: In massive play for storage and more, Dell bets $63.1bn on EMC to reshape IT landscape

Analysts: Brenon Daly, Simon Robinson, John Abbott, Christian Renaud, Scott Crawford, William Fellows, Alan Pelz-Sharpe, Katy Ring, Matt Aslett, Chris Hazelton

Announcing the largest tech deal since the Internet bubble burst, Dell plans to pay approximately $63.1bn for EMC. The debt-laden combination would create a sprawling IT giant with multibillion-dollar businesses in many of the primary enterprise technology markets, including storage, information security, IT services, servers and PCs. (For context, Dell-EMC would be larger than Hewlett-Packard Enterprise (post-split), NetApp, Juniper Networks and Symantec combined.) Dell's bold transformational transaction is not coming cheap, however. The company is valuing EMC significantly more richly than it valued itself when it went private two and a half years ago.

Further, Dell's relatively pricey bulking up comes at a time when a number of rival enterprise IT vendors are slimming down. More to the point, several of these competitors are unwinding earlier blockbuster acquisitions they made in hopes of staying more relevant in a shifting IT market. The arrival of the public cloud has siphoned off billions of dollars that once flowed unimpeded to Dell, EMC and other first-generation technology firms. However, IT customers increasingly lack the appetite to buy, install and manage dozens of 'piece parts' and mold them into a cohesive whole. As a result, we can look at the combination of Dell and EMC as essential if the traditional IT model is to survive the onslaught from public cloud providers, most notably Amazon Web Services.

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