Bulky vs. slim: Dell EMC and HPE paths raise innovation questions

Users mull a vastly different IT buying landscape, after Dell Technologies completed the largest technology deal in history, while HPE sells off another part of its business.

It is decision time for enterprise IT buyers in the data center who are now presented with two opposite strategies...

from major IT suppliers: Bigger is better; smaller is smarter.

Two of the biggest names in enterprise IT continue heading in opposite directions, after Dell completed its deal to buy EMC and Hewlett Packard Enterprise (HPE) sold off most of its software business. But industry watchers remain mixed over how to view each strategy through the lens of what matters to enterprise users' needs.

"On one hand, Dell and EMC are betting the farm that they can make it work by walking away from a federated approach, and HPE is saying it is such a complex market that we are going to spin off some things with the right partners and focus on what we do best with the core data center," said Dana Gardner, president and principal analyst at Interarbor Solutions LLC in Gilford, N.H.

The real competitor is the public cloud, even as Dell and HPE head in different directions, Gardner said.

"I'm actually relieved HPE is getting back to what everyone knows they do well, and that's infrastructure and platforms," said Patrick Moorhead, president and principal analyst at Moor Insights and Strategy in Austin, Texas.

The smaller company without much of its software means HPE has the potential to move much quicker on things they can make "a real impact," such as its composable infrastructure product, Synergy, he said.

Darryl Walwyn, infrastructure manager at Tokio Millennium Re AG in Bermuda, is both an HPE and VMware customer. He said he believes Dell will keep its pledge to fundamentally leave VMware intact, and he does not expect to see much difference in VMware's product direction under Dell.

I'm actually relieved HPE is getting back to what everyone knows they do well, and that's infrastructure and platforms.
Patrick Moorheadpresident and principal analyst, Moor Insights and Strategy

He also does not expect his buying habits to change with a combined Dell EMC, and he will continue to make decisions on a product-by-product basis.

He is an HPE hardware customer, but uses EMC's backup, archive and disaster recovery software, Data Domain, because he said it was the best backup product available.

Dell Technologies' now-completed $60 billion purchase of EMC Corp. this week -- well below the initial $67 billion valuation -- creates an IT behemoth, with $74 billion in combined revenues. The deal brings VMware, Pivotal, VCE and RSA under the Dell Technologies' umbrella, with the enterprise side of the business called Dell EMC.

Meanwhile, HPE performed what it called a "spin-merge" of most of its software products to Micro Focus in an $8.8 billion deal, further paring down the longtime IT systems stalwart.

Being the biggest vendor isn't viewed by everyone as being best. One former EMC customer who already was looking elsewhere before the deal because of poor service -- and will continue to stay away -- is Patrick Welch, network services manager for the Mississippi Department of Revenue.

Welch said he felt he didn't spend enough money with EMC to get the company's attention. Prior to the Dell-EMC announcement in October 2015, he needed to replace his VNXe3100 and VNXe3300 storage systems, but he didn't consider EMC because of a "total lack of attention to detail and [to] the customer," calling it a "sore subject for us."

Even after the deal was made public, EMC was still not in contention for his business, he said.

He said he is, however, contemplating Dell Compellent storage, and he is curious about whether Dell will keep it as part of various storage offerings from Dell EMC.

Dell and EMC "are committed to our product families" under the newly combined Dell Technologies, CFO Tom Sweet said in a call with press and industry analysts as the deal was finalized Wednesday.

"The vision from Michael Dell is sharper, in my eyes," said a senior director of engineering at a multinational software corporation in Palo Alto, Calif., who heard both Dell and HPE CEO Meg Whitman speak at HPE Discover this summer. "He made it clear from the beginning that it is a merger, but it is his company."

HPE dropped its public cloud, but Dell has Virtustream and vCloud Air, said the senior director of engineering, who requested his name and company name not be used because he is not authorized by the company to speak publicly.

He said he finds EMC salespeople are more open and sometimes speak against the company's products, while, from HPE, he doesn't see any immediate use for its composable infrastructure product, Synergy.

Not all agree with that sentiment. Synergy is an area where HPE "can change the game, not just participate," Moorhead said.

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 [email protected].

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