Many EMC customers are concerned that Dell’s pending $67 billion acquisition of the data storage giant will be a distraction and ultimately unsuccessful.
That’s the takeaway from a report this week by 451 Research about what could be one of the biggest technology deals of all time.
Forty-two percent of EMC’s customers that were polled said the merger “is not aligned with the goals of their organizations,” the survey found. Meanwhile, 29% said that the deal could be distracting for the two companies.
The findings highlight that some EMC customers are confused by the deal, which would combine two technology titans. It also signals that both EMC and Dell will have hard work ahead of them to reassure customers about the acquisition’s benefits or risk losing some of them to rivals.
EMC Federation (EMC) is a collection of six independent business units that is one of the biggest suppliers of data center technology along with data analytics, security, and consulting services. By buying EMC, Dell is trying to branch out from its roots in PCs and laptops to become an even bigger seller of business technology.
For the report, 451 Research surveyed 447 executives responsible for their company’s technology buying to gauge their immediate reaction to the Dell-EMC deal. Their responses, which came less than 24 hours after the deal was announced, provide a window into thinking across a large swath of business technology customers, their feelings about the acquisition, and perception of the companies themselves.
Both Dell CEO Michael Dell and EMC CEO Joe Tucci have tried to reassure customers by issuing statements explaining, from their perspective, why merging the two companies makes sense.
In his letter, Tucci wrote that “The combined company will be far more efficient and effective to operate as a private company,” a reference to Dell’s status as privately-owned. He also said that products from both companies would more easily work with each other and therefore be more valuable to customers.
A Dell spokesman said that company has contacted its existing data storage customers. Some of them may be concerned that Dell will no longer support those products and instead replace them with EMC gear.
Part of the problem has to do with image. The report found that 43% of EMC customers view Dell mostly as a PC supplier, which doesn’t bode well for them buying Dell’s enterprise products.
In a blog post, 451 Research said that the findings show that there is “a very real concern of disaffecting EMC-only customers with their limited knowledge of Dell.”
On the other hand, 42% of Dell customers view Dell as an “enterprise systems supplier” comparable to EMC, according to the blog post. That suggests that those customers would remain loyal to Dell.
Additionally, Cisco (CISCO) CEO Chuck Robbins and David Goulden, the CEO of EMC’s storage business EMC II, issued a joint statement on Thursday pledging their continuing support of the EMC Federation company VCE. VCE, a maker of data center appliances, was formed in 2009 through a partnership with Cisco, EMC, and federation member VMware (VMW).
Analysts had speculated about what would happen to VCE after the deal because of Cisco’s stake in the business. At least for now, VCE will operate as if business as usual.
According to the statement: “Cisco and VCE also have long-term engineering, resale and support agreements in place to enable our joint collaboration and business. With that shared commitment, you will experience no change in the pre-sales and post-sales engagement with VCE.”
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