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Dell Closes $60B Merger with EMC

wsj.com

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Re: Dell Closes $60B Merger with EMC

#11

Post by kbenson »

johansch wrote: post #3
chollida1 wrote: post #2

The new company services 98% of all fortune 500 companies. That's a pretty incredible reach. And 140,000 employee's. If I were a betting main, I'd expect that number to drop in the very near term. Selfishly I'm very interested in following a private Dell,as tech tends to lead to huge companies in monopoly/winner take all verticals. Dell being private is a decent case study to see how well a private company does again…

I'm just fascinated by the fact that in 2016 there are still huge companies like this making their money on ancient tech that is insanely overpriced to the alternatives. (~20 years ago when I started working in software I thought I would eventually get how these enterprise software giants actually were worth it. The more I learn and age...) In the end I guess what companies like Dell and EMC do is to provide access t…

In some cases it's because stability and repeatability are more important in many aspects. At the level where enterprises are buying components to interface directly with people on a regular basis (e.g. workstations), having a slightly more powerful workstation (20%) generally does not compute into a person that is 20% more productive, but having a workstation that fails to function 20% of the time can definitely lead to a near 20% loss in productivity. Large enterprise providers leverage knowledge of failure rates over vast quantities of almost identical (comparatively very variances, at least) computers to ruthlessly identify any weak links in all parts of the computer, because their service contracts often make them responsible for these problems. This goes as far as creating their own mainboards and BIOS, RAID firmware, etc. Enterprises take advantage of this for both their initial good stability rate and ease of replacement when there are problems.

To put this in another perspective, the vast majority of people buy factory model cars, maybe with the occasional dealer add-on. People could buy custom made cars, and if it was common enough, they might actually achieve a cost lower than MSRP of what Ford, Honda, Toyota, etc sell, by slapping together the freely available parts (from an industry which would look more like the PC parts industry). The average quality would be a big question though, and I'm not sure a lot of people would be willing to deal with that for their workhorse vehicles, that need to be relied on to get them from point A to point B reliably.

Re: Dell Closes $60B Merger with EMC

#12

Post by tracker1 »

johansch wrote: post #3
chollida1 wrote: post #2

The new company services 98% of all fortune 500 companies. That's a pretty incredible reach. And 140,000 employee's. If I were a betting main, I'd expect that number to drop in the very near term. Selfishly I'm very interested in following a private Dell,as tech tends to lead to huge companies in monopoly/winner take all verticals. Dell being private is a decent case study to see how well a private company does again…

I'm just fascinated by the fact that in 2016 there are still huge companies like this making their money on ancient tech that is insanely overpriced to the alternatives. (~20 years ago when I started working in software I thought I would eventually get how these enterprise software giants actually were worth it. The more I learn and age...) In the end I guess what companies like Dell and EMC do is to provide access t…

It comes down to fixed resources and reducing operational costs. Yes, you could write your own iSCSI driver, running against a large distributed drive system, or other interfaces, but people don't. There's also a significant cost difference in manufacturing a run of 10k system boards vs 1M of them. Tooling alone is very expensive, and retooling more so.

EMC in particular is fairly custom hardware and software and still tends to deliver better value and consistency than the competition. EMC offers NAS options that has always been ahead of its' competitors. I say this as a passive observer as I've been in software development more than anything operational for the better part of two decades, but I remember in the mid-late 90's that what EMC offered simply had no competition at that time.

Today, it's entirely possible to build a software system similar to what S3 does in-house, but that isn't always what a given system/application, especially legacy systems, require. Not to mention a black box that's mostly closed vs needing specialized software management in-house. There are operational costs to this.

Using a single EMC device vs. hiring 3-5 FTEs making > 80k (120-150K after employer-side taxes) for 5+ years? That's a few million right there. This is often the trade off that EMC offers.

Dell itself offers consistency in broader terms... the same/compatible hardware across all employees... all the same docking stations, all the same monitors, etc. There's value in that as well.

Re: Dell Closes $60B Merger with EMC

#13

Post by tboughen »

B1FF_PSUVM wrote: post #7
chollida1 wrote: post #2

The new company services 98% of all fortune 500 companies. That's a pretty incredible reach. And 140,000 employee's. If I were a betting main, I'd expect that number to drop in the very near term. Selfishly I'm very interested in following a private Dell,as tech tends to lead to huge companies in monopoly/winner take all verticals. Dell being private is a decent case study to see how well a private company does again…

> services 98% of all fortune 500 companies. So it's a short list of ten for the other 2%. IBM, HP, ... ?? (Clarification: the ten who don't buy from Dell+EMC. Just curious about that. Direct competitors is my first guess ...)

No, because large companies buy computing goods and services from more than one business. There will be significant overlap.

Re: Dell Closes $60B Merger with EMC

#14

Post by icelancer »

B1FF_PSUVM wrote: post #7
chollida1 wrote: post #2

The new company services 98% of all fortune 500 companies. That's a pretty incredible reach. And 140,000 employee's. If I were a betting main, I'd expect that number to drop in the very near term. Selfishly I'm very interested in following a private Dell,as tech tends to lead to huge companies in monopoly/winner take all verticals. Dell being private is a decent case study to see how well a private company does again…

> services 98% of all fortune 500 companies. So it's a short list of ten for the other 2%. IBM, HP, ... ?? (Clarification: the ten who don't buy from Dell+EMC. Just curious about that. Direct competitors is my first guess ...)

AAPL.

Re: Dell Closes $60B Merger with EMC

#15

Post by petra »

jasonjei wrote: post #4

Dell tried to get into the cloud services market a long time ago, and didn't succeed. VMware is a weird case too, especially with containerization and cloud service vendors being cheaper to use than building your own cloud. If Dell is trying to make their own cloud, I wonder if they'll succeed this time. Some people have said that ship has sailed for them. Then again, a company like Google has made a compelling compe…

Maybe the idea is to get into the private cloud business, in hope that it will grow ?

Re: Dell Closes $60B Merger with EMC

#16

Post by TallGuyShort »

kchoudhu wrote: post #8
chollida1 wrote: post #2

The new company services 98% of all fortune 500 companies. That's a pretty incredible reach. And 140,000 employee's. If I were a betting main, I'd expect that number to drop in the very near term. Selfishly I'm very interested in following a private Dell,as tech tends to lead to huge companies in monopoly/winner take all verticals. Dell being private is a decent case study to see how well a private company does again…

> The new company services 98% of all fortune 500 companies. How is this not an antitrust issue?

Dominating the market is not illegal - anti-competitive behavior is. The former is still possible just by being really good at what you do and how you sell.

Re: Dell Closes $60B Merger with EMC

#17

Post by throwthisaway00 »

Dell will fail because of a systemic problem of hiring poorly skilled and educated engineers. An analogy to cancerous cells in the body multiplying and spreading is not such a stretch. Dell needs a very invasive treatment to eradicate gobs and gobs of worthless engineers and do-nothing mid-level management.

Re: Dell Closes $60B Merger with EMC

#18

Post by tracker1 »

kbenson wrote: post #11
johansch wrote: post #3

Earlier quoted context omitted.

I'm just fascinated by the fact that in 2016 there are still huge companies like this making their money on ancient tech that is insanely overpriced to the alternatives. (~20 years ago when I started working in software I thought I would eventually get how these enterprise software giants actually were worth it. The more I learn and age...) In the end I guess what companies like Dell and EMC do is to provide access t…

In some cases it's because stability and repeatability are more important in many aspects. At the level where enterprises are buying components to interface directly with people on a regular basis (e.g. workstations), having a slightly more powerful workstation (20%) generally does not compute into a person that is 20% more productive, but having a workstation that fails to function 20% of the time can definitely lea…

What's interesting is your auto comparison... At around $80k, having something custom built/rebuilt starts to become an option... At over $150k it's absolutely an option.

Though the majority of cars on the road have a street value of under $25k, and/or are under financing. Getting financing for a one-off isn't really possible unless you don't actually need the financing.

Re: Dell Closes $60B Merger with EMC

#19

Post by codemac »

B1FF_PSUVM wrote: post #7
chollida1 wrote: post #2

The new company services 98% of all fortune 500 companies. That's a pretty incredible reach. And 140,000 employee's. If I were a betting main, I'd expect that number to drop in the very near term. Selfishly I'm very interested in following a private Dell,as tech tends to lead to huge companies in monopoly/winner take all verticals. Dell being private is a decent case study to see how well a private company does again…

> services 98% of all fortune 500 companies. So it's a short list of ten for the other 2%. IBM, HP, ... ?? (Clarification: the ten who don't buy from Dell+EMC. Just curious about that. Direct competitors is my first guess ...)

They service those companies as well. Most of the fortune 500 don't buy one server or one storage system. They buy many of everything, and reward the best vendors with larger portions of their data centers, not exclusivity.

Re: Dell Closes $60B Merger with EMC

#20

Post by jhall1468 »

throwthisaway00 wrote: post #17

Dell will fail because of a systemic problem of hiring poorly skilled and educated engineers. An analogy to cancerous cells in the body multiplying and spreading is not such a stretch. Dell needs a very invasive treatment to eradicate gobs and gobs of worthless engineers and do-nothing mid-level management.

Now that the merger is complete a purge is inevitable. Whether or not they get rid of the correct employees remains to be seen.
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