​EMC to leave Microsoft beef behind after Dell merger

VCE's outspoken president said he is willing to make a friendly wager that when EMC and Dell officially merge, Microsoft will be looked after.
Written by Asha Barbaschow, Contributor

Since Dell announced it was purchasing storage firm EMC for $67 billion in October, Chad Sakac, president of VCE, EMC's Converged Platforms Division, and the leader of EMC Global Systems Engineering, has been asked a lot of questions about how the joint entity will operate on a business-to-business level.

Speaking in Sydney on Tuesday, Sakac said that historically EMC and Microsoft have not aligned eye to eye with their point of view of the world.

"One thing that's interesting however is that Dell is Microsoft's largest single partner," he said.

Although Sakac said both Dell and EMC are operating at an arm's length from one another at the moment, the two companies have employed a "clean room" integration method, where both have discussed concerns such as how Microsoft will be treated.

"Through the clean room exercise, one thing that was funny was the question of who do you view as a competitor and who do you view as a partner, and on nine out of 10 of those EMC and Dell agreed. But there were a couple where we didn't see eye to eye, and one of them was Microsoft," Sakac said.

"I fully expect that as we come together into Dell Technologies over the coming months you're going to see a strong embrace of the Azure stack as a peer.

"There's probably going to be a Microsoft hybrid cloud and substantiation of the Azure stack on and off premises. I would make a friendly wager."

Speaking at EMC World in Las Vegas earlier this month, Michael Dell announced that after the merger is completed, the two companies will be known as Dell Technologies.

The company's new name is meant to "convey a sense of being a family of businesses and aligned capabilities," Dell said. "As far as family names go, I'm kind of attached to Dell."

Despite the EMC brand not getting a mention in the company name, Sakac said he is personally looking forward to moving through airport customs and saying he works for Dell Technologies, without having to explain what storage means to someone outside of the technology world.

He also said the combined entity has the ability to be the infrastructure partner for every organisation as the world moves through the next industrial revolution.

"At a scale, at a reach, at a set of resources that is unparalleled, the combined entity will be roughly around $80 billion in revenue size -- which means it's roughly the same size as Google in terms of its size, scale, and scope," he said.

"But the breadth of the portfolio is going to be very strong and as we bring these things together it will be interesting."

As Dell Technologies emerges, it will be the only private player in the market.

"How many of you know that if you want to buy something from EMC the best time to do it is basically the last day of the quarter? You could substitute EMC for HP, or Cisco, or IBM, or whomever. If you're a publicly traded company, you're only measured every 90 days through three metrics: Revenue, earnings per share, forecast. Those are the only three things that matter," Sakac said. "The stock market crushes you if you don't get all three of them right."

Sakac said being a publicly traded company is a huge impediment to navigating the transition from capital business models into a utilitised business model, which he said everyone is doing.

"The reason Microsoft can do it is because Azure is being born inside a giant $180 billion a year revenue stream. If you take a look at Amazon Web Services, AWS is an $8 billion business within a $100 billion retailer. In other words, trying to do it when your core business is being disrupted is an enormous impact," he said.

"So being able to do this as a private company will change the dynamic of how we take technology and innovation and commercialise it.

"We're going to have a business structure as a private entity where we're not hung up on [each] quarter. Think about how stupid that is that your whole partner ecosystem thinks in 90-day timeframes.

"We feel at EMC, at Dell, and as Dell Technologies that we've got a shot to do something really cool."

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