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Arun’s takeaways from EMC World 2016

EMC continues to be a pragmatic company, as always. At EMC World last week there was a lot of discussion about the upcoming acquisition by Dell but what I found more interesting is how EMC is visualizing covering the four quadrants defined by Traditional Vs. Cloud Native Apps on the horizontal axis and On Premise Vs. Off-Premise on the Y-axis. Plenty of new announcements on the Cloud Native/On Premise combo this week. Ditto with Off-Premise/Traditional with Virtustream. We will write more extensively on these and other new products but the matter of strategic importance is how EMC is covering these spaces, many through acquisitions. This will be its major contribution to Dell, post acquisition, I believe.  

EMC made it clear that none of these activities will occur at the expense of protecting the flanks of Traditional/On-Premise, which will remain the mainstay for revenue for years to come. This space will be protected with scale-out, cloud enablement, flash and software-defined enhancements to the whole portfolio. And of course, that includes hyperconvergence. 

This is an extremely crucial time in the history of EMC. Assuming all goes well on the acquisition front, Joe Tucci will move on to bigger and better things. Lots of farewell ceremonies this week for him. He leaves a solid legacy and deserves every bit of praise for creating the independent storage industry, almost from scratch and leading it for decades. 

EMC and Dell representatives did a lot of selling on why Dell and EMC combination is more than the sum of the parts. While I believe the companies have different strengths and weaknesses and the combination can indeed make for a stronger company, no one must under estimate the complexity of such “mergers.” To be sure, Dell has a solid handle on selling volume products through channels, running a profitable business on 25% margin, amazing supply chain control, access to networking technologies that will increasingly become important to the combined company, and much more. But the EMC mindset is very different. It thinks more strategically in terms of markets and technologies. It prefers to acquire and not resell. It thinks in much higher % for R & D than Dell does. It is unafraid of jumping into a market early and building it. These are different traits and a different way to think. How well these mindsets will come together remains to be seen. On a pure logic basis one can see how the differing skill sets can create a behemoth. The challenge will be to run these businesses almost separately and yet take advantage of size and scale. 

All I can say at this point in time is that EMC's product arsenal for “tomorrow’s” products is looking pretty darn solid. Its investments in cloud native technologies is stronger than for any other major supplier in the market today. Its investments in Pivotal are beginning to take shape, even if the payoff remains in the future. I was pleasantly surprised by the introduction of ECS-based Virtustream Storage Cloud offering. This will provide a resting ground for a ton of data that would have otherwise gone to AWS from Isilon, VMAX, VNX and Data Domain. And on the traditional side, while VNX and VMAX will continue to be under pressure, the all-flash portfolio and the converged and the hyperconverged solutions will offset them. Unity, the new mid range array announced at the show looks like a good replacement (over time) for VNX. We will analyze it in more detail soon. But at $18K for an all-flash array, it will certainly push back on the Nimbles and Tintris of the world. Of course, at higher performance levels, XTremIO is solidly positioned against its rivals, namely Pure, IBM FlashSystems, Solidfire and HP 3PAR. 

EMC is as solidly positioned as can be imagined, given that the infrastructure market is undergoing total metamorphosis right in front of our eyes. These are complex times for infrastructure solution suppliers regardless of any other factor. The added pressure of the “merger” both presents an incredible opportunity and a tough challenge. But EMC has broken all traditional rules in the past and has almost always came out a winner. And when it didn’t it quickly changed direction or acquired unapologetically (Data Domain comes to mind). The vendors in the industry have learned to underestimate EMC at their own peril. So while the challenge is huge and in many ways Dell will now be in charge, I remain confident in EMC’s contribution to the “merger.” The next 18 months are crucial as product lines are selected/discarded, supply chains are combined, organizations are aligned and systems are consolidated. But I remain confident that EMC is as strongly positioned for tomorrow as any of its major competitors is. Metamorphosis affects every vendor so no one has the upper hand, per se. How Dell Technologies (the new name for the combined entity) orchestrates the transition from yesterday’s infrastructure to tomorrow’s will dictate success or failure. But given EMC’s past, I would not bet against it. Its executive strength was evident at the show and will be a real asset to Dell, in my view. 

But above all this was an historic EMC World in that it would be Joe Tucci’s last, assuming all goes well with the acquisition. I spent a few minutes with him and listened to his farewell speech. Unquestionably, he deserves much of the credit for EMC’s gigantic success. He is a classy guy who set the bar high for his employees, gave them a ton of freedom but expected great results and got them. My hats off for what he has achieved. He leaves a strong legacy as he moves on to the next stage of his life. We wish him all the best.


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