Slashdot Mirror
Dell To Buy EMC For $67 Billion (nytimes.com)
im_thatoneguy writes: After days of rumors, the NY Times is reporting that Dell will in fact be acquiring storage company (and VMWare parent) EMC in a record $67B deal being financed by a consortium of banks. Dell has confirmed the deal on their website.
Under the deal, Dell will pay $33.15 a share, which represents a premium even on top of EMC's current value, which had already jumped on initials rumors of a $50B acquisition last week. However, insiders say the deal won't be a straight forward cash buy-out of stock holders. Instead, EMC investors will receive about 70% in cash and the remainder in what's called a Tracking Stock, which will track the performance of just the VMWare Division within the new organization.
Under the deal, Dell will pay $33.15 a share, which represents a premium even on top of EMC's current value, which had already jumped on initials rumors of a $50B acquisition last week. However, insiders say the deal won't be a straight forward cash buy-out of stock holders. Instead, EMC investors will receive about 70% in cash and the remainder in what's called a Tracking Stock, which will track the performance of just the VMWare Division within the new organization.
VMWare seems like the unit that would actually be making money. However the licenses are really expensive, there are much affordable alternatives out there, but there are still too many muckety-mucks out there who think the most expensive product is still the best, and they should only get the best. However those free/cheaper solutions may or may not be as good, but you may be able to deal with greater growth for less.
Not that VMWare is bad, it is a good product, it is just really expensive, to the point where you can consider getting additional low end servers vs virtualizing them.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Who cares? It is not my debt, it is my company's debt. I can take a vacation to Hawaii, while the company crashes and burns (ie sheds/restructures debt through bankruptcy proceedings).
If you believe this kind of deep leverage will not affect the cultures at these companies, from the top down, you're probably mistaken.
Pretending this is my office full of bitter coworkers..
It certainly depends on the use case. Datacenter power and rack space is expensive. If your cost is $100 / month for the additional power and rack for your extra server the vmware package starts to make sense. But yeah, when you get all the bells and whistles VMware can get crazy expensive.
I think the core virtualization services are tough to beat. Where I work we do both VMware and Hyper-V, and while Hyper-V is pretty close in features most of us that work with both prefer VMware -- there are just too many weird cases where Hyper-V just doesn't work right, but it is popular among cost-cutters.
Not that VMWare is bad, it is a good product, it is just really expensive, to the point where you can consider getting additional low end servers vs virtualizing them.
The problem with this is that with virtualization you get VM backup and a lot of storage efficiencies you'd never get with single servers, not to mention high availability or hardware replacement. I'm pretty sure low end licenses like Essentials Plus are still cheaper even at 3-4 VMs than additional physical hardware, especially if you have to do better than "low end servers". I'm sure there's some extreme cheapskate math that works in the more hardware method, but you sacrifice a lot of flexibility and you have to also deal with great switching port counts.
IMHO, the problem VMware has is largely that the problem of virtualization is mostly solved and it's hard to grow the business without coming up with lots of add-ons.
VMs are rarely the correct answer for environment isolation anyway. VMs are when you absolutely need to run a different OS than the host. For everything else, use jails.
Really, the one thing that made VMWare suddenly appear expensive was Microsoft's move to support the same basic functionality built into Windows Server via Hyper-V. Until that happened, your only other "enterprise-grade" solution came from Citrix and had a price tag comparable to VMWare.
VMWare is still available in a free version though, if all you need is the need to virtualize a number of systems on a single server. (That's all we never needed at my previous job working for a small manufacturing firm. We built one high-spec rack mount server and virtualized 5 of the older physical machines to consolidate it into one box with more drive space and usable RAM.)
And if you start considering paying VMWare's price for all of the "vmotion" licensing related to moving VMs between virtual servers, etc.? Depending on what you actually need - you might be able to save some money just going with VMWare "essentials" instead and combining it with the 3rd. party Veeam backup software. Veeam partnered up with VMWare so their backup product can utilize some direct hooks in VMWare itself, to do things that are usually off limits to other applications not made by VMWare.
This is only true if you don't count the tax bills that the government forgave. http://www.wsj.com/articles/SB...
So in terms of what we lost from GM alone, the bill is closer to $60 billion. To prop up their unions, instead of letting another company come in and run them better. What a deal.
Dell has a history of doing a weird/terrible job at merging in company acquisitions. I'm looking at you Compellant/Equalogic, Wyse, Force10. I suspect EMC is going to be another one of those standalone assets for some time just because at the scale EMC operates, the contractual obligations to their large customers is going to make change slow.
Looking at the storage assets alone, it's a bit strange to merge 3 competing companies together when they really havn't merged the first 2 after several years. The general vibe I've gotten from other peers is to stay away from Dell Storage with a 10ft pole, but EMC hardware was pretty good for traditional storage. When looking at the EMC storage products it's relevant to note the significant differences under the hood when it comes to VNX/VMAX/Isilon coming from the old Data General acquisition in 1999 and the new XtremIO arrays which was a totally different company until 2012.
I do look forward to them eventually gutting whatever hair-brained system manages their support system. After years of working with EMC, I'm fleeing not because they make a poor product or a person does a poor job. Rather, it's because their SR management system is horrible. I shouldn't have to keep my support district manager's cell phone handy when they decide to route my SR into oblivion. I've worked with Dell for a long time as well and at least I can generally talk to a knowledgable human being without have to go through a checklist first.
From a customer account perspective I'm also hopeful. I've had my account rep change 3 times in 2 years; none of which have actually made the trip across the US to see us face-to-face. On the other hand, recently Dell has made several relationship improvements. I actually see my dell rep and his engineer 2-3 times a year. This makes a huge difference in my opinion on the sales/account team.
As a VMware customer as well, I don't see a significant difference in what will happen. EMC has generally been hands off when it comes to steering VMware. The only real advantage I've seen them take with their ownership is getting to be the first out of the gate with new VMware features, but it's not locking others out. If EMC was to take a strong hand in steering the VMware ship VSAN would never have seen the light of day and vVols would be an EMC exclusive. Likewise form VMware's perspective EVO:RAIL wouldn't have allowed any other partners to produce solutions if they weren't trying to be neutral.
I'm hoping that Dell doesn't cannibalize or kill of the EMC Twinstrata acquisition. It will also be interesting to see what Dell does with some of the other EMC assets like RSA, Pivotal, Avamar, Data Domain, the plethora of hosting solutions, Greenplum, Mozy, Watch4Net, & Iomega.