Remember the BUNCH? No, not the Brady Bunch or the Fun Bunch from when the Redskins were good, but the mainframe BUNCH from the 70s. The acronym was the nickname for all of IBM's mainframe competitors. IBM was, by far, the most dominant mainframe vendors and, because of this, the other competitors – Burroughs, UNIVAC, NCR, Control Data Corporation, and Honeywell – were “bunched” together.
The mainframe era was an interesting period in IT because most organizations bought their entire compute solution from a single vendor, usually IBM. But then IT systems opened up, IBM lost its stranglehold on the industry, and the vendor community exploded. Customers had a level of choice never seen before.
However, it seems as time goes on, we are going back to the future where the big IT vendors are gathering more and more assets and attempting to become “one stop shops” for their customers.
The proposed $67 billion purchase of EMC by Dell and its deep-pocketed partner, Silver Lake, creates another massive IT company to compete with the likes of Oracle, IBM, HP, and Cisco. In this era, though, there’s no de facto standard like IBM was in the mainframe days, so this new group of multi-billion-dollar IT companies is competing with each other instead of a common foe. Based on the names of these organizations, the new BUNCH could be called HIDOC.
The point of commonality for the BUNCH was mainframes, but for HIDOC it’s the software-defined data center. Based on the over-abundance of hype surrounding SDNs and SDDCs compared to the relatively light deployment numbers, I think it’s fair to say that shifting to a SDDC is a complex, risky proposition. Because of this, every vendor has built or is building a turnkey solution. For many customers, the single vendor solution is a better approach, and now Dell and EMC have the portfolio to compete.
The combined Dell-EMC organization certainly has the potential to change the IT landscape. Unlike the Compaq-HP merger, which had significant product overlap, there is very little in Dell-EMC. EMC had solutions geared towards the large enterprise. while Dell sold more to the SMB market. In fact, even the way the two companies go to market are quite different, with Dell heavily leveraging on-line distribution and EMC being system integrator and reseller-focused. Dell has taken a number of shots at the enterprise and EMC rolled out a number of mid-market products, but neither could crack the code on those respective markets. The coming together of the two companies can deliver any kind of computing solution to any organization.
Keeping VMware an independent organization is the right approach. VMware is the dominant player in the virtualization market, and rolling it into Dell could hurt its position as a neutral vendor. As long as it remains independent, there shouldn’t be any concern that HP, IBM, or other VMware partners will terminate the relationship they have.
One of the more interesting EMC Federation companies that Dell-EMC should leverage is VCE. The former joint venture between VMware, Cisco, and EMC has a core competency in making things that are complicated simple. Given the broad portfolio of the two combined companies, rolling out solutions that are easy for customers to deploy and manage should be a focus area, and VCE can make that a reality.
Dell went private so it could revamp the company without having to worry about having to meet quarterly goals. Merging with EMC certainly short-circuits the revamping process. Expect more acquisitions and partnerships, as turnkey has now become the way.