News Stay informed about the latest enterprise technology news and product updates.

Dell software biz jettisoned to advance EMC buy, users' views mixed

Handing off most of its software business to private equity firms is one more step toward Dell's mega-purchase of EMC, and it gives users both clarity and concerns.

In the wake of Dell Technologies sale of its software business, industry watchers are debating who figures to benefit...

the most from from the deal. Some believe that Dell itself will most benefit, others say the customers of the upcoming Dell-EMC-VMware stand to gain the most. Still others chime in believing that neither party will. 

Those seeing the upside say the deal eliminates overlap with VMware offerings -- most notably, the virtualization and management software from Quest -- thereby clearing a path for VMware to play a more integral role in the new company going forward.

"With this move, the [EMC] Federation can rely more on VMware and EMC's software, which gives everyone clearer marching orders moving forward," said Andrew Smith, an analyst with Technology Business Research Inc., in Hampton, N.H. "This should be reassuring to VMware and EMC users that Dell is investing more of a stake in their technologies."

The move also clears the way for EMC's recently announced Native Hybrid Cloud offering -- a turnkey platform for cloud-native application development designed to help IT and IT operations teams work more efficiently with developers -- to exert more influence. The platform pulls together a number of the EMC Federation's strategic offerings, including Virtustream and storage products from Pivotal, VMware and EMC. Dell also is keeping Boomi, which specializes in software as a service-based cloud integration and was bought in 2010.

"It's becoming clearer that their [EMC Federation's] cloud strategy is going to be built around that cloud-native architecture," Smith said. "You are starting to see some of the puzzle pieces of their cloud strategy fall into place."

Dell software sale adds clarity, but concerns remain

Some users are heartened by the Dell software sale, because it lends much-needed clarity to what direction the would-be Dell-EMC-VMware troika is headed and how it is going to get there, such as its hyper-converged infrastructure plans.

It's hard to know what Dell will commit to, and we don't want to be riding the wrong horse in that race.
Anonymous IT professionala large manufacturing company in Minneapolis

"We have been evaluating hyper-converged systems, including VMware's, for almost a year now, but the Dell-EMC deal muddies the water," said one IT professional with a large manufacturing company in Minneapolis.

"Dell has had its own [hyper-converged] systems for a while now, but they own VMware. It's hard to know what Dell will commit to, and we don't want to be riding the wrong horse in that race."

Another IT pro wondering what the Dell-EMC merger means for buying decisions is Mark Campbell, CTO of Unitrends Inc., in Burlington, Mass. He noted that Dell and EMC have long been considered safe choices for most products, but many buyers become uneasy when vendors are sold, making them question whether that vendor is dedicated to the market. Buyers are always concerned about the long-term direction of a company when they have invested heavily in a mission-critical product, he said.

Dell may be clearing the decks to acquire more competitive and up-to-date products, Campbell speculated. Quest and SonicWall were sold not because Dell was confronted with a too-good-to-be-true offer, but to help finance the Dell-EMC deal expected to be approved this fall, he said.

"They've [sold] Quest -- what's next?" Campbell said.

The sale of Quest does help simplify the offerings from Dell and EMC, but they still will offer similar or duplicate products. One example is EqualLogic storage, one of three storage area network offerings from Dell.

"They have a long way to go to get rid of all the overlap," he said.

One product included in this sell-off that surprised some was Statistica, Dell's analytics software, which appeared to be playing an increasingly important role in the company's internet of things plans. Some users and industry observers said they hoped Dell would continue to work closely with the product's new owners, Francisco Partners, a private equity group, and Elliott Management, a manager of hedge funds.

All about infrastructure

Dell is not getting entirely out of the software business. The company is holding onto Boomi, and AtomSphere is at the heart of Dell's plans to establish itself as a top-tier cloud broker.

The sale does, however, put an end to hopes of establishing a distinct Dell software identity, thereby becoming a more complete technology supplier.

Faced with declining margins in its server and desktop hardware business, three years ago, Dell decided it needed a significantly more competitive software and services portfolio to remain a viable IT competitor. To that end it, hired long-time IBM executive John Swainson to help turn Dell's software fortunes around, as he did with Computer Associates and IBM itself a couple of decades before. It also hired handful of other experienced software executives and made a series of strategic acquisitions to help with that transformation.

Despite those efforts, Dell failed to make the transition, due in no small part to the newer software executives unable to overcome the rigid, longtime hardware culture spearheaded by the sales organization.

"This marks the end of Dell's foray into building a software business," said one purchasing agent with a large insurance company in Hartford, Conn. "They have to go back to what they do best, which is focusing on infrastructure, which is what [Hewlett Packard Enterprise] also appears to be doing," he said.

Ed Scannell is a senior executive editor with TechTarget. Contact him at escannell@techtarget.com.

Robert Gates covers data centers, data center strategies, server technologies, converged and hyper-converged infrastructure and open source operating systems for SearchDataCenter. Follow him on Twitter @RBGatesTT or email him at rgates@techtarget.com.

Next Steps

How does VMware look in the merger?

Dell added a software vice president in May 2016

After Quest sale, these VDI vendors can fill vWorkspace void

Dig Deeper on Data center design and facilities

PRO+

Content

Find more PRO+ content and other member only offers, here.

Join the conversation

2 comments

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

What concerns do you have about the new ownership of Quest and SonicWall?
Cancel
I hope Dell lays out a clear road map for things. Far too long they have acquired and not laid out a vision for customers in plain sight. 
Cancel

-ADS BY GOOGLE

SearchWindowsServer

SearchEnterpriseLinux

SearchServerVirtualization

SearchCloudComputing

Close