Dell Closes Largest Acquisition In IT Industry History, Channel Partners Ready To Dig In

It’s official. Nearly a year after it was announced, the landmark acquisition of EMC by Dell is complete, creating Dell Technologies, a more than $70 billion, privately held global IT behemoth and channel powerhouse with designs on dominating markets from budget PCs to high-end data center infrastructure and the cloud.

From Austin, Texas, Chairman and CEO Michael Dell finalized the transaction, making him head of the largest privately held technology firm in the world.

With the acquisition, Dell can address markets from its traditional strengths in consumer PCs, servers and small- and midsize-business data centers to the largest data centers in the world and red-hot segments like enterprise hyper-converged infrastructure. EMC also owns about 80 percent of virtualization powerhouse VMware.

[Related: The 10 Biggest Channel Challenges Facing Dell After Acquiring EMC]

Now, solution providers are eager to begin hearing specifics about how Dell and EMC's wide range of products and services will be knitted together and how partners can capitalize on what is perhaps the industry’s largest and most diverse portfolio.

Dan Serpico, CEO of FusionStorm, a large solution provider that works with both Dell and EMC, said the closing of the deal signals that Dell will now be able to answer questions openly.

"The important thing is all the questions everyone has -- partners, employees, customers -- they all start to get settled," Serpico said. "Everybody was in a holding pattern, and now the leadership can talk openly about the stuff they want to do. They have great ideas, and now the cover comes off, and to some degree it’s easier. Things start to happen, you get more information, more opportunity. I expect it to start to open up."

Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, one of Dell's top partners, No. 167 on the CRN 2016 Solution Provider 500, said he is confident the new Dell Technologies is poised to take the channel and customers to new enterprise heights.

"This is going to go down as one of the largest and most impactful acquisitions in IT history, not only for the partner community but for the end-user community as well," said Venero. "There is no question in my mind Michael and his enterprise dream team are going to pull this off and do it in a way that is going to benefit its partner and customer community."

Venero, who coincidentally is scheduled to be in Austin, Texas, for a top customer briefing at Dell headquarters the same day as the formal launch of the new Dell Technologies, said his day one message to his Future Tech sales team is: "You now have one of the deepest technology arsenals available to help support and enable all customers globally no matter the size or scale. Dell Technologies goes from the smallest client devices to the largest enterprise data centers globally and everything in between – a full turnkey enterprise solution offering."

While the Dell and EMC channel programs will be run in parallel at first, new global channel chief John Byrne has committed to creating a single, integrated program by the start of Dell’s next fiscal year, Feb. 1.

Uncertainties around what that program will look like and how it will operate, are still a concern for partners.

"I want to see what real decisions they’re going to make," said Paul Neyman, president of Waypoint Solutions, a Houston-based Dell solution provider. "What’s the partner program going to look like? What’s deal registration going to look like? I’m cautiously optimistic, but it’s going to boil down to the compensation plans they put together because I’m more worried about infighting between teams than between partners. There are so many moving parts that it could get dicey. We’ve embraced EMC. We’ve started training, we’ve started engaging their field folks."

Byrne told CRN in June that Dell and EMC account executives would have their compensation rejiggered to incent them to work cooperatively and to work with channel partners. About 60 percent of Dell’s partners are also EMC partners, and Byrne said he’ll focus on encouraging the remaining 40 percent to sell the complete Dell Technologies portfolio.

Michael Tanenhaus, president of Mavenspire, an Annapolis, Md.-based solution provider that works with Dell and more recently with EMC, said working with a combined Dell-EMC allows partners to break into accounts that may have been loyal to one or the other vendor.

"It’s a huge opportunity to explain the bigger picture, and that’s big in bastions that are wholly one or the other," Tanenhuas said. EMC, he said, "could never do a whole solution, there always had to be someone else. Dell has always been whole solution, they’re all about putting it together in one solution. It’ll be interesting to watch it come together into one."

"They’ve had time to help us understand the next task, and the next task," Tanenhaus said. "We’re meeting with EMC field sales people and Dell sales people, and everybody seems to be on the same page."

The merger combines the $50 billion PC and midmarket powerhouse Dell Inc. with $25 billion data storage giant EMC, creating the largest, privately held end-to-end IT conglomerate in the world. The deal includes VMware, which remains a publicly traded firm. As part of the transaction, Dell Technologies issued a tracking stock tied to VMware’s performance.

Michael Dell, who started the company in his University of Texas dorm room, will lead the company. Joe Tucci, EMC’s longtime chairman and CEO, will leave the company.

The deal was announced last October, and new Dell Technologies branding was introduced during the annual EMC World conference in May. Under Dell Technologies, the PC business will be known simply as Dell while the enterprise business will be known as Dell-EMC.

EMC shareholders approved the deal in July, and the transaction was granted its final regulatory approval by Chinese anti-trust authorities in late August. Dell paid $24.05 and 0.111 shares of a tracking stock tied to VMware’s performance for each share of EMC stock in a deal worth about $65 billion.

To make the deal happen, Dell was prepared to take on as much as $49.5 billion in debt. The Round Rock, Texas, company also defrayed the cost by selling off business units including Dell Services and Dell Software.