Tag: EMC

Dell’s EMC debt rising

emcTin-box shifter Michael Dell always knew that his outfit’s debt was going to be a bit high after buying EMC, but it is starting to look like it is getting heavier.

Dell’s debt was high after the company went private, but now it seems that the Wall St bond market will need higher interest payments to fund the deal. While there is still enough cash in the kitty to get hold of EMC, it means that there could be a fire sale of overlapping business soon after the sale takes place.

All this is because the weak quarterly results at Intel and the poorly received debt sale by disk-drive maker Western Digital are pushing up the costs of Dell’s coming debt issuance. Basically the bankers are a bit nervy about investing in hardware at the moment.

Dell’s ability to raise money through selling off some businesses is also suffering. His SecureWorks IPO is now priced at $14/share instead of the original $15.50 – $17.50 range, reducing the likely inflow of cash to Dell, and thus reducing its future debt needs less than it must have hoped.

All this could add tens of millions of dollars to Dell’s annual interest expense, something that Dell needs like a hole in the head. It is thought that to deal with the problem, Dell is going to have to flog anything not nailed down in the two companies. There are overlaps between the two companies which can be safely flogged off, but it is more likely that more cuts will have to be made.  It is expected that there will be large numbers of former EMC or Dell staff looking for jobs when the agreement goes through.

EMC ponders selling Documentum

emcEMC is looking to sell its Documentum software unit in a move that parallels Dell’s efforts to sell off assets ahead of the companies’ pending merger.

According to Bloomberg, EMC had agreed to a Dell plan to shop the Documentum software business to prospective private equity buyers as part of an effort to offset the cost of acquiring EMC. However it is equally possible that EMC wants the cash to buy something nice.

Few EMC partners sell Documentum. EMC partners work at the infrastructure level, rather than the application level with document management. Documentum software tracks corporate documents. EMC acquired the company in 2003 for about $1.7 billion.

Dell expects its acquisition of EMC to close between May and October. Dell has been flogging off assets to offset the cost of the transaction. The acquisition deal is worth around $60 billion. Dell intends to take on as much as $49.5 billion in debt in order to complete it.

It has flogged off Perot Systems business to NTT Data of Japan for about $3.1 billion and is trying to find a buyer for SonicWall security business and Quest software.  This should get it $4 billion.

 

EU gives Dell deal the thumbs up

Happy man portrait

Happy man portrait

Tin box shifter Michael Dell is going to be given unconditional EU antitrust approval for its $67 billion bid for data storage company EMC.

Dell unveiled the deal in October last year, the largest ever in the technology industry sector, and designed to enable Dell to better challenge rivals Cisco Systems Inc, IBM and HP in cloud computing, mobility and cyber security.

European Commission spokesman Ricardo Cardoso has so far said nothing, but leaks in Brussels [shurely that should be sprouts.ed] claim that the when the Commission gives its ruling on the deal by February 29 Dell will be a happy bunny.

 

Dell founder and Chief Executive Michael Dell took the company private three years ago with the help of private equity firm Silver Lake.

The computer maker has arranged a debt package for up to $49.5 billion to help finance the EMC deal, the second-largest M&A financing on record.

 

VMware share drop hurts Dell’s EMC bid

Michael DellTin box shifter Michael Dell is warning investors that the $14 billion drop in the market capitalisation of VMware is playing havoc with his attempt to get cash for EMC.

A Dell spokesman said the total value of the blockbuster acquisition has dropped by about $10 billion from its original $67 billion, to $57 billion.

In an SEC filing, Dell noted that “the market value” of the VMware tracking stock has “declined, thereby reducing the implied value of the stock portion of the merger consideration”.

On October 9, the last business day before the Dell-EMC announcement was made, VMware, 80 percent of which is owned by EMC, had a market capitalisation of $33.2 billion and a stock price of $78.65 a share. Now, its market cap is about $19.2 billion, and its stock price is hovering around $45.54.

A Dell spokesman said the EMC acquisition price of $24.05 per share was “locked, that doesn’t move, but because VMware has moved down, the value of the portion of the merger consideration linked with the tracker is going to be in that range of decline”. Whatever that means.

Dell plots more buy-outs

michael-dell-2Michael Dell has said that even more “significant” consolidation could be on the cards in the tech space, hinting that his firm could continue its shopping spree.

Dell is in the midst of a mega-deal to acquire EMC for $67 billion, which is expected to close some time between May and October.

Speaking at the company’s FY17 Field Readiness Seminar in the US, a transcript of which has been filed with the US Securities and Exchange Commission, Michael Dell told staff that the EMC deal might not be a one-off in the industry.

“Customers need a trusted partner in this journey; in navigating this period of incredible change; and we will be the best partner for companies and organisations of all sizes,” he said.

“Customers face a real challenge in funding the digital transformation, and what they have to do is make the existing infrastructure more efficient to be able to fund the digital transformation, and we’re going to help them do exactly that. During this period, I also expect there to be significant consolidation. And we’re very well positioned to be a consolidator.”

Elsewhere at the FRS event, Dell (pictured) urged his staff not to pay attention to media reports suggesting the EMC deal could fall through, branding such articles “click bait”.

“You may have read a story that questions if this deal is going to happen. If you have, you’re wasting your time,” he said.

“The media business is under a lot of stress and their business model is sort of cratering. And what they do to survive in those tough times is they create something called click bait. They create an inflammatory headline – so and so was impregnated by aliens, or whatever, click on here to read about this story, see some ads, try to get some money. So don’t fall for that, OK?

“There’s going to be those kind of stories, just like there were during the privatisation. Do you all remember when we were going private there were all kinds of stories and they basically turned out to be nonsense? So don’t waste your time with that.”

He added that his company is “absolutely” going ahead with the deal according to the original timeline and terms “at full speed ahead”.

EMC UK bigwig defects to Pure Storage

swimming-ratIt seems that not all are happy with what is happening at EMC now that Dell is fairly certain to get his paws on the company.

Gary Matson began working at EMC in October as district manager after joining from Arrow.  Now he has left the company after four months to lead Pure Storage’s UK and Ireland (UKI) channel.

His new job  is as a sales professional with Distribution, Vendor, SI, and ISV experience  working with partners to deliver IT solutions.

Neither Pure Storage nor EMC were immediately available to confirm the move or comment, but Matson updated his LinkedIn profile this week.

For those who came in late,  Pure Storage and EMC are rivals and there is much bad blood between them. A number of EMC staff have defected to Pure Storage over the past year or so.

In fact his this time last year, EMC’s former UK boss James Petter cleaned out his desk and headed over to Pure Storage . EMC’s chief marketing officer Jonathan Martin left the company to take on the same job at Pure Storage.

Pure Storage is big on the channel. In a recent 10-Q filing published last month. It promised to continue to invest in the channel programme and boost its global channel network.  To be fair, so is Dell and EMC, but it is unclear why EMC is losing its talent to such a smaller outfit.

Dell, EMC prepare for channel merger

Sarah Shields, DellEMC and Dell have gone into overdrive in the expectation that the two companies will merge.

Sarah Shields, general manager of Dell UK, said that both companies had put senior members in place to work on the integration plans. She said that EMC products are complementary to Dell’s.

“The integration is a bit of a no-brainer,” she said. She said there are some obvious synergies and she herself was looking at the EMC programmes already in place.

“From our point of view it’s business as usual and so far it’s looking very positive,” she said.

She said that Dell shifted its business model to include the channel eight years ago, and although she declined to give figures, said channel business accounted for 40 percent of the company’s revenues.

She said that while business worldwide had been challenging last years, Dell had continued to grow. She said that both channel revenues and units were both positive.

EMC staff “making stuff up” about Dell sale

pinocchioA furious EMC president of global sales Bill Scannell told his sales teams to stop making stuff up about the company’s coming merger with Dell.

According to Channelnomics  Scannell told his staff not to “veer from the script” after the $67 billion acquisition by Dell was announced earlier this month. He slammed some of his staff for saying the wrong thing to customers.

He said that he had seen a couple of things happening in the field where people are veering from the script and kind of making things up.

“That’s not healthy, that’s not going to allow us to make this a painless and very successful merger… Understand what you can and can’t say now prior to the closing, realising this could be another six to nine months before we get the regulatory approvals and the shareholders’ sign-off to do this merger.”

Scannell told his staff to focus on quarterly business and exceeding customers’ expectations. They needed to sure they understand what we’ve said publicly about this acquisition and that it is all is going to be great.

If the deal goes ahead, EMC will go private but VMware – in which it owns an 80 per cent stake – will remain a publicly listed company.  This means that EMC will not have to worry about shipping products at the end of the quarter to make the quarterly revenue numbers.

This is going to have huge impact on savings from inventory with EMC, Scannell said.

Dell-EMC deal will rock the channel boat

Dell logo* DELL has confirmed it will take over EMC for $67 billion.  VM Ware will continue as a publicly traded company.

It now looks almost certain that Dell will announce it is taking over EMC today – a move that will cause ripples right throughout their respective channels.

The deal, said to be worth over $50 billion, is expected to be concluded either today or tomorrow, although EMC, being a listed company, will have to be offered to other prospective suitors.

A prospective suitor this time last year was HP, but HP Inc and HP Enterprise aren’t that interested any more.

For Dell, there are clear advantages to the acquisition. It has been building up its channel portfolio for several years now and at last week’s Canalys Channels Forum, senior executives said that at least 70 percent of its business was now going through two tier distribution. The acquisition will also put Dell into the top league, along with IBM and HP one and two.

Dell has also had a pretty smooth path when it’s taken over other countries, managing to successfully integrate them in a comparatively short period.

Obviously, there will be some consolidation involved and doubtless some people will be made redundant as part of the proposed takeover. But sorting out the channel implications will require some deft and delicate moves on Dell’s behalf. Reports suggest that EMC’s VM Ware division may itself be subject to either a sale or some equity investment.

HP should buy EMC

INDUSTRY HP 1Analyst Raymond James has created a flap over his idea that now is the perfect time for HP to buy EMC.

James believes an acquisition deal between HP and EMC is a “distinct possibility” as HP inches closer to its company split date in November. The two companies agreed, at least once before, and had more than a year’s worth of merger talks before giving up, mostly on the matter of price.

Channel partners of both companies said the deal makes sense and would be beneficial to them and it is looking like other analysts agree.

Such a deal would improve HP’s cloud portfolio with VMware and Virtustream services, while EMC and Pivotal would boost the converged infrastructure and analytics side of the portfolio. HP provide some good mobile tech.

HP is splitting the enterprise divisions from the PC and print side of the business, and is certain to have that done by Christmas. HP CEO Meg Whitman has indicated further acquisitions and so it is possible that EMC is on the table.

HP Enterprise of the new HP – will be a lot more aligned with the current EMC and VMW businesses in terms of end-market focus.

A united company is worth $2 billion more. HP would kill off its 3Par storage over time, and EMC would shelve its Content Management in favour of HP’s Autonomy.

 

 

 

EMC names new channel supremo

kevin_sparks_emcEMC has confirmed Kevin Sparks is to replace Russell Poole as director of alliances and channels for the UK and Ireland.

Poole has been doing rather well for himself climbing the greasy pole within EMC. He replaced Terry Beale as EMC’s head of channel just last August has been promoted to the position of senior director, enterprise sales for EMEA.

Sparks joined EMC five years ago and was most recently the vendor’s cloud and service provider sales manager. He has 22 years of experience in technology sales and marketing, including leadership roles at Ericsson and BT, before joining EMC.

He has to evolve EMC’s channel business in the UK&I which has been getting better of late and might be showing signs of opposable thumbs.

EMC has been trying to transform its relationships with the channel and distribution businesses over the last few years. Sparks’ will “work closely with the partner community to help them find additional value from their relationship with EMC” which we guess means a generous drinks cabinet for thirsty channel partners.

 

Back up kit worth over a billion

emcboxThe market for customised backup appliances reached $1 billion worldwide in the fourth quarter of last year.

This market represents standalone disk products that use software, disk arrays, server engines, and more specifically data coming from backup software.

IDC said that the market for this kind of kit rose by four percent in 2014 and generated revenues of $3.26 billion.

Annual capacity in 2014 rose by 42.8 percent compared to 2013 to a staggering 2.68 exabytes.

Liz Conner, a research manager at IDC, said reasons for the rise in revenues included better software, data tiering, file sharing, data analytics and more investment in integrated systems.

In the fourth quarter, top of the storage pile was EMC with 63.8 percent market share, dwarfing the other players Symantec (11.5%), IBM (6.7%), HP (4%) and Quantum (2.3%).

 

VCE widens its portfolio

Pic Mike MageeVCE, which specialises in converged infrastructure, said it has added a raft of software and hardware products aimed at customers looking to move to a hybrid cloud model.

The company said its Vscale architecture offers speed and simplicity for data centres. The VxBlock Systems use Cisco Application Centric Infrastructure or VMare NSX for software defined networking.

Its VCE Vision Intelligent Operations 3.0 is an update to its management software with unified intelligence across many VCE converged infrastructure systems.

It supplemented these announcements with VCE technology extensions – pre-tested and pre-validate hardware – the announcement means that businesses can add storage and computing resources including EMC and Cisco products.

Further VCE said that it has launched the Federation Enterprise Hybrid Cloud, making it easier to build scalable systems.

VCE said it is now shipping the Vblock System 540 and the System 740 in volume. These products were announced last October.

 

Hyper scale data centres give storage boost

emcboxIDC said that the storage market ended well. In the last quarter, worldwide enterprise storage systems revenue grew 7.2 percent year on year to amount to close to $10.6 billion.

And capacity shipments rose by 43.7 percent compared to the same quarter the previous year to represent 99.2 exabytes.

Eric Sheppard, a research director at IDC, said spending on enterprise storage grew in most markets worldwide with factors including demand for midrange systems using flash memory and systems designed for hyper scale data centres.

EMC was the top dog in fourth quarter, with a 22.2 percent market share. That company was followed by HP (13.8%), Dell (9%), IBM (9%) and Netapp (7.2%).

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EMC warns of the perils of masses of small data

zxzzzzd1Guy Churchward, head of EMC’s $20-billion core technologies division, has warned that small data is going to cause even bigger headaches than the big stuff.

Taking to the Economic Times  Churchward said that data challenges for the Internet of Things or driverless cars were huge,

He said that millions of driverless cars, and billions of other internetconnected devices will not be Big Data. “What you have is not big data, it is actually `small data’ – because what it is, is billions and billions of small data objects.”

EMC expects IoT to create a sprawl of billions of autonomous devices, which will create security, storage and management nightmares in future.

Churchward warned that  “small data sprawl” will take the challenges of Big Data and make them 100x more difficult.

Security, storage, management and applications would be completely different in a world filled with billions of devices, each of which will have its own big data. None of the currently available tools and applications would work in such environments.

Part of EMC’s over $2.3-billion research and development budget is being used to address this `small data’ problem but the company thinks that it will take between three to five years to start bearing fruit.