Why Dell's EMC Buyout Plans Spell Channel Turmoil

By Michael Vizard  |  Print this article Print
Dell EMC acquisition

NEWS ANALYSIS: The impact on the channel will be significant for Dell and EMC partners—as well as vendors and solution providers that will compete with the combined entity.

What Will Happen to VMware?

A major element of the deal is the status of VMware. While Dell plans to take EMC private, the VMware business unit, which owns AirWatch, a provider of mobile management services delivered via the cloud, will continue to operate as a public company owned by Dell.

In the future, Dell may opt to sell VMware to help fund the deal, or assuming that key vendor partners, such as Hewlett-Packard, Cisco and IBM, are willing to trust Dell, continue to operate VMware as a semi-independent entity in much the same way it operates today under EMC.

As the head of the combined entity, Dell said there are no immediate plans to cut its staff and that Dell itself is starting to get comfortable with EMC's federation model under which EMC has been managing both its core company and its units including VMware and Pivotal, which focuses mainly on application development frameworks.

Given that it will take at least a year to sort all this out once the deal is closed in the mid-2016, the disruption to the IT channel will clearly be significant not only for Dell and EMC partners for years to come, but also just about every vendor and solution provider that winds up competing with the combined entity.

Michael Vizard has been covering IT issues in the enterprise for more than 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.