Michael Dell: EMC Acquisition Sets Stage For 'Much Stronger' Relationship With Cisco

Dell CEO Michael Dell's enthusiasm for EMC converged infrastructure unit VCE may pave the way for a closer relationship with rival Cisco Systems.

"I do think VCE is a great business, and it sets the stage for a potentially much stronger partnership with Cisco going forward, which you might be surprised to hear me say," Dell said, "but their new CEO Chuck Robbins and I had a lot of good discussions in the last day."

Dell made his comments at a meeting of Dell employees at the company's Round Rock, Texas, headquarters the day after the company revealed its blockbuster $67 billion bid to acquire EMC, according to a transcript of the meeting filed with the U.S. Securities and Exchange Commission.

Before speaking with Dell, Robbins expressed a similar sentiment. "If you look at the partnership itself, I've talked to a lot of EMC execs over the past few days, and I expect that when Michael and I chat that we will talk about the need to continue our partnership," Robbins told Channel Co. CEO Robert Faletra in a one-on-one interview during The Channel Company's Best of Breed conference this week in Orlando, Fla.

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[Related Video: Cisco's Robbins Predicts 'Massive Period Of Instability' From Dell-EMC Deal]

Paul Neyman, president of Houston-based Dell partner Waypoint Solutions, said he's skeptical about the possibility of Dell and Cisco becoming closer partners. "Cisco's got to find a storage vendor to go partner with," Neyman said. "Dell might want to work more closely with Cisco, but Cisco might want to move away and not really move closer together with Dell."

VCE was established as an EMC-Cisco joint venture. Cisco still owns about 10 percent of the company. In the interview, Robbins said it was likely that Cisco would remain a partner in VCE.

Robbins and EMC Information Infrastructure CEO David Goulden reinforced the companies' commitment to VCE in a letter Thursday.

"VCE will be a very important part of the new combined company and EMC and Cisco are committed to working together to ensure that we continue to deliver the industry's best converged infrastructure customer experience," the executives wrote.

The backdrop to all the talk about strong partnerships is intense competition among hardware industry heavyweights fighting for market share as more and more customers move toward public cloud offerings like Amazon Web Services.

In recent months, Dell ramped up its attacks on Cisco, taking aim in interviews and marketing campaigns at Cisco's cloud offerings, software-defined networking systems and other aspects of Cisco's business.

At the same time, tensions between EMC and Cisco have also been on the rise, and TBR Inc. analysts said in a recent report that they expect the EMC-Cisco relationship "to be further strained by EMC's integration into Dell."

That tension was underlined by VCE's release in May of VxRack, a hyper-converged infrastructure system that relies on white-box servers rather than Cisco UCS servers. VxRack moves EMC into a red-hot hyper-converged market from which Cisco has been notably absent, though it partners with SimpliVity to sell UCS servers in its offerings.

Dell, however, said his company is prepared to both partner with -- and compete against -- Cisco and other industry heavyweights.

"There's a lot of EMC storage connected to HP servers. And there's a lot of EMC storage connected with IBM servers," Dell said at the Round Rock meeting. "Once the transaction closes, it will not be in our incentive to go and mess those things up."

PUBLISHED OCT. 15, 2015