The incredible IT hulk: Dell + EMC - did someone say 'synergy'?

The servers, the storage, the synergy - the skinny

In storage the overlaps are legion

• In high-end enterprise SAN ENC has VMAX and Dell has nada,
• In SAN generally Dell has Fibre Channel-focused Compellent and iSCSI-based EqualLogic, both in hybrid and all-flash modes, plus PowerVault, with EMC having hybrid and all-flash VNX,
• In virtual SAN, Dell has its EVO: RAIL offering while EMC has the much-stronger ScaleIO and ScaleIO Node,
• In new design all-flash EMC has XtremIO and Dell has nada,
• In NAS, Dell has its Fluid File System options for Compellent and EqualLogic arrays plus a Windows NAS system, while EMC has file access for VNX and its scale-out Isilon systems,
• In object storage, Dell resells Scality’s RING software while EMC has Atmos, ECS and ViPR’s object services,
• In converged, EMC has VCE (with Cisco UCS servers and networking) and VSPEX for systems and reference architectures while Dell has vStart, meaning nothing much,
• In hyper-converged EMC has ScaleIO NODE while Dell has its XC using OEM’d Nutanix software,
• In software-defined storage, Dell has reseller deals with Scality and Nexenta whereas EMC has ScaleIO, ViPR and, via VMware VSAN,
• In backup software Dell has AppAssure, NetVault Backup and vRanger compared to EMC’s Networker, Spanning, Mozy, and SourceOne archiving,
• In deduplication Dell’s Ocarina technology looks weak compared to EMC's Data Domain behemoth,
• Dell has a set of backup hardware products, both disk and tape, whereas EMC has its marketing-leading Data Domain products, plus Avamar and a Disk Library for mainframes.

Aaron Rakers, a Wall Street analyst at Stifel Nicolaus, says: “According to Gartner’s estimates, Dell has roughly a 6 per cent revenue share in the total external controller-based storage array market – revenue totalling approximately $1.4 billion on a trailing 12-month basis. This compares to EMC’s ~33 per cent revenue share with approximately $7.5 billion in trailing 12-month revenue (note: Gartner excludes software).”

He expects “the combined company to aggressively focus on portfolio integration to address the hyper-converged market – leveraging Dell’s positioning in the x86 server market (~21 per cent revenue share; ~$9.3 billion of TTM revenue) with VMware’s EVO:RAIL and EMC’s ScaleIO solutions.”

Rakers said the VxRACK hyper-converged product, based on ScaleIO, “is a self-contained system of servers and networking (ToR and spine switches) positioned as a complement to the VCE Vblock and VxBlock converged infrastructure platforms and is positioned as a high-end solution relative to the hyper-converged VSPEX Blue solutions.”

EMC management has noted that they believe the traditional midrange market will be increasingly cannibalised by hyper-converged solutions overtime. On the takeover call EMC emphasised that Cisco still has a role to play with converged systems and is committed to that. EMC sees growth in converged, medium and hyper-converged infrastructures.

In the cloud EMC pretty much rules supreme with Pivotal and VMware’s vCloud Air. On the takeover call Joe Tucci said Pivotal would go public in the “not too, too distant future,” implying it could happen, we understand, as early as 2016.

Current storage OEM and reselling storage providers to Dell now face potentially being wiped out by EMC product substitution. Server suppliers to EMC now face substitution by Dell server technology.