Dell buying EMC: Is this the end times, or the road to salvation?

In any case, the enemy is now Amazon


This will hurt existing startups badly

There are a lot of startups that were never going to IPO. They were counting on being acquired. Two of the biggest acquirers in the industry just blew their cash load and won't be doing much purchasing for quite some time. What little Dell does acquire will be almost exclusively information security companies for the foreseeable future.

There are a whole lot of storage startup execs that are getting outrageously drunk right now. Or so my Skype would lead me to believe. Denial was short lived and mostly played out before the acquisition's formal announcement. Anger and bargaining seemed to last a day. The depression, however ... that looks like it's going to hang around for a good long time.

Help the startups Cisco and HP; you're their only hope.

This is great for new startups

A whole bunch of talented people who are experienced in the business-oriented aspects of running a company will be available very shortly. Yes, I'm talking about the inevitable layoffs. Dell and EMC are dancing around this in analyst calls, but readers of The Register have seen this movie before.

The cuts are coming, and they're going to be both savage and sweeping.

That isn't as bad a thing as you think. For all that there will be good people hit hard by this, the majority of them will get decent jobs without too much effort. All those startups are going to go bust as two of their biggest hopes for acquisition stop taking their calls.

These startups will shed experienced executives and engineers who will then go forth and make new startups learning lessons from their previous attempts. Among those lessons will be that you start the game with proper marketing, sales and back office staff if you want to have a hope in hell of surviving out there. Oh, and you treat them as valued parts of your business, not as burdensome necessities imposed by the investors.

Believe it or not, most startup execs learn this lesson after the first disaster. And they do then go on to try again. This is what makes Silicon Valley great. And what makes it terrifying.

VMware is a licence to print money

VMware needs a less political environment to shine. Under Dell, I expect this will happen. I fully expect a "hands off" approach that has far less interference than VMware experienced under EMC. If I'm right about this then there are good reasons for VMware CEO Pat Gelsinger to see a massive upside to this deal: the shackles are about to be removed from VMware and they'll be allowed to compete freely with everyone. Even Dell.

The beauty of being privately held is that you can do this sort of thing. Dell (the company) is maintaining only a 28 per cent stake in VMware. Dell (the man) intends to buy up enough of the remaining shares to call the shots.

Good.

Dell (the man) proved he has the [euphemism for genitals] to think long term when he took Dell (the company) private. I fully expect he sees the value of holding VMware at arms length and just letting it print money.

Like Yahoo's stake in Alibaba, it doesn't really matter if VMware competes with Dell, or even if VMware wins. What matters is that VMware makes oodles and oodles of cash and Dell (the company) gets enough of that to really invest in next generation technologies that will keep them alive through the coming industry consolidation.

Dell's enemy isn't overlap between the storage offerings of Dell, EMC and VMware. Dell's enemy is Amazon. If Dell is to survive it needs to out-innovate, out-price and out-think Amazon. Dell can only do that if it hires the best minds, does shedloads of R&D and has a stable source of income that won't go away if it fails to execute on some element of its other efforts.

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