Dell is the future for EMC and, incidentally, for VMware. But how is this future going to be formed? Assuming the stockholders agree, the deal will go through. How will Dell ingest such a large organization with such a diverse product line that competes with Dell—not to mention VMware, which, while part of the Federation, is traded separately. Let us look at the landscape of EMC with regard to how Dell could create a powerhouse. What are the options available to it? We will do this by looking at each part of the Federation:
RSA
RSA is part of EMC proper but at the same time usually operates as its own business. RSA is primarily an identity business that has missed several major markets and is now struggling to stay relevant. One option for Dell is to spin off RSA as part of SecureWorks or as its own company. Another is to bring RSA up as a first-line entity within Dell, give it an R&D budget, and let it move in new directions. Unfortunately, given RSA’s track record with new technology, I am not sure how it will play in the new distributed, Internet of Things, hybrid cloud market as a legitimate security player outside the identity space.
VCE
VCE is an interesting set of products that competes directly with Dell core for switching, compute, storage, etc. What happens to VCE will depend on what happens within VMware with Dell, as well as on storage integration between the organizations. Initially, nothing will happen, but either VCE will be spun off with Dell the majority owner, or VCE could transition into the engineering behind all converged and hyperconverged solutions within Dell. The second seems more likely.
Pivotal
Pivotal is the joker in the deck. Geared for high-end customers, it has less-than-stellar adoption in Dell’s traditional market. Even so, it is a big player. For those wanting to move to fully cloud-native applications using Platform as a Service (PaaS), Pivotal is one way to go. The real question in my mind is how Pivotal and Boomi will play together with Photon Platform (coming from VMware). Will Pivotal be able to pivot in the new container world that seems to be taking over and filling the space set aside for PaaS? Dell may be better off spinning off Pivotal into its own company, majority-owned by Dell. However, if Dell wishes to embrace IoT, then it may need Pivotal to do so. Still, given the IoT market, Pivotal targets the high end only.
Virtustream
Dell will now own a very successful and very powerful cloud provider based on VMware technology using competing compute and storage systems. Initially, I see nothing changing within Virtustream, but now Dell has a usable, working high-end cloud for high-end products. Eventually, I see this offering becoming integrated with Boomi and other Dell cloud offerings, yet Virtustream will remain the core. Virtustream, with its security chops, should become a first-line player within the new Dell plus EMC.
VMware
As a separate corporate entity and separately traded, Dell will own 40% or so of the virtualization giant and has stated it wants to buy a bigger share. However, in the meantime VMware will go on as it has. VMware has the larger R&D budget and gives Dell an interesting way to assemble its products for the future within that R&D. VMware will not remain unscathed, however. VMware NSX (Nicira) and Dell compete in the SDN space. I see Nicira needing to be brought completely into VMware, and Dell may force that to happen. The Nicira executives still at VMware look at the world through their own lens, which is not the VMware lens. Hopefully, Dell can help make that happen.
Closing Thoughts
Dell has a big job ahead to fully integrate EMC into the Dell fold. That will take at least a year. What will happen to the parts of the Federation will be interesting. The ultimate question, however, is how Dell will deal with competing products from EMC. Will it choose to go forward with the best of breed or not? Even so, each part of EMC is an easier decision point for Dell: spin off or integrate? Spinning off may be the easier way to go for RSA and Pivotal, but not for the others.