skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Ovum view

Summary

Dell's acquisition of EMC is based on two main principles. First, the new company would be a leader in four of the key technologies needed to underpin any digital transformation: servers, storage, virtualization, and PCs. Second, it will provide a technology platform that Dell can use to develop the new capabilities needed by organizations to operate in the digital economy.

Customers want fewer suppliers, not more

On stage in his opening keynote of Dell World 2015, Michael Dell stated that the rationale behind the acquisition was threefold. First, customers want fewer technology suppliers, not more, that offer a wide choice of solutions backed by good service. This view was backed up by the customers Ovum spoke to at the conference. However, these were Dell customers at a Dell event, so some degree of bias must be expected. Even so, the uniformity of their responses indicated that it was a real business requirement.

Second, a technology supplier needs to have an end-to-end capability in order to fully address the needs of its customers. Ovum considers that while this may be the espoused rationale, it is more likely that the driver is to allow Dell to benefit from any upsell and cross-sell opportunities in an increasingly margin-reduced infrastructure market. In fact, market data appears to confirm Dell's theory, as successful volume-based vendors have an attached PC business. Although this is not proof of future success, it does demonstrate the value of a PC business in creating a beachhead in new organizations.

Lastly, the acquisition extends the reach of both Dell and EMC solutions and allows Dell to serve net new markets. Dell is particularly strong in the mid-market-to-consumer space, while EMC has a significant presence in Global 2000 organizations, with VMware covering the market of large enterprises and Global 2000 companies.

Appendix

Author

Roy Illsley, Principal Analyst, Infrastructure Solutions

roy.illsley@ovum.com

Recommended Articles

;

Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700


Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

Email us at ClientServices@ovum.com

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at pr@ovum.com

Contact marketing - 
marketingdepartment@ovum.com

Already an Ovum client? Login to the Knowledge Center now