Home » Challenges lie ahead for Dell, EMC merger

Challenges lie ahead for Dell, EMC merger

By John Katsaros

Oct. 14, 2015

Wow — You had to check the calendar to make sure that it wasn’t April first. This is going to be fun – watching how Dell and EMC combine these companies in a meaningful way.

Just getting the strong personalities of the senior executives to work together could be an impossible task.  EMC is a collection of companies stitched together that, from the outside looks like weird hybrid with many heads looking in many different directions.  A deal like this is meant to produce a leaner organization and gain market share.  

How you make this happen, how anyone makes this happen will require a superman (or Superwoman).  Dell and EMC are huge companies each with many business units – EMC consists of EMC, VMware, Greenplum, Pivotal, VCE and RSA to name a few.  They each (Dell and EMC) have over 70,000 employees.  

 

But most important is that upper management of these companies have very strong personalities and have moved to the elite category of industry “Rock Star” after very successful careers. Joe Tucci (CEO, EMC). Pat Gelsinger (CEO, VMware), Paul Maritz (CEO, Pivotal), Scott Yara (Pivotal), Bill Cook (Pivotal/GreenPlum), Praveen Akkiraju (CEO, VCE) and AmitYoran (CEO RSA) to name a few.  It’s probably fair to say that none of these superstars ever expected to work for (and report to) Michael Dell.

 

Can you imagine the situation where Dell (the person) needs to settle a disagreement over product line creep between two of these guys…they’re not used to losing.  Sadly, most of them will probably move on to other things by this time next year.

 

The sales forces will be another problem.  Most of the business units have expensive sales forces – outside sales individuals earn $100,000 base plus $70,000 bonuses – And there are thousands of these individuals working for business units on both sides.  Any change, even a minor one, in the sales commission plans will be hotly contested. 

 

On the other side, most likely the investors paying for all of this look at the high cost of sales and expect to see significant reductions from sales re-alignment.  Even if there are no immediate changes to the sales teams just the rumors alone are enough to be very disruptive.  Already people in the know say that VM sales individuals are updating their resumes and setting up interviews. Do you think HP or anyone else selling into the enterprise might start poaching? 

One thing for sure — it’s going to be interesting to have a front row seat. Let the fun start now!!!