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Dell vs. Hewlett Packard Enterprise - Does size really matter?

James Henderson | Sept. 6, 2016
The Dell-EMC acquisition runs against recent trends toward exiting product businesses or disaggregation

“Although IBM, for example, continues to sell technology components and on-premises solutions, the company moved to subscription and service models, where its focus is helping customers meet their desired outcomes with capabilities such as Bluemix cloud-based services.”

Amidst the “as a Service” transition however, Woollacott believes that VMWare remains the wildcard in the Dell-EMC tie-up.

“VMware, which faces market challenges in open-source competitors, will provide key software assets and customer entry points to the new Dell-EMC,” he added.

“VMware’s virtualisation-based, software-defined data centre capabilities will form the tip of the spear for Dell-EMC solutions and its guidance could also lend a hand to a new Dell-EMC subscription service model.

“Yet, VMware remains independent, therefore works with a range Dell competitors that may also benefit from an independent-minded VMware.”

Meg Whitman - CEO, Hewlett Packard Enterprise
Meg Whitman - CEO, Hewlett Packard Enterprise

In the green corner…

Since the Dell deal hit the front pages of tech media around the world, HPE CEO, Meg Whitman, has pounced on countless opportunities to question Michael Dell’s grand vision for the future of the industry.

Citing ongoing confusion within the market, Whitman said HPE “decided to get smaller while they got bigger”.

“We decided to lean into new technology while they’re doubling down on old technology in a cost takeout play,” said Whitman, during an analyst call in March.

Read more:VMworld 2016: VMware hybrid Cloud strategy key to Dell-EMC progress

“We’re super-focused on being fast and nimble for our customers. So both strategies may work. I happen to like our hand better than the Dell-EMC hand.”

Yet despite rival vendors lining up to pour scorn on the acquisition, Woollacott believes customers will take the EMC-Dell tie-up in their stride.

However, loyalty will be tested in the short to mid-term with HPE, IBM, Lenovo, Cisco, Oracle and others expected to launch customer take-away campaigns immediately after the finalisation of the deal.

Specific to HPE however, Whitman entered 2016 seeking to apply its newfound independence to execute in a more agile manner on customer transformation initiatives as well as competitive displacement opportunities.

As customers accelerate spending in areas such as hybrid cloud services and hyper-converged platforms, and competitors such as Dell, EMC and Lenovo navigate significant business model evolutions, 2016 remains a critically opportunistic year for HPE to secure its existing installed base and target net new accounts.

“During the remainder of the year, we expect portfolio and investment discipline and the centralising and modernising of HPE’s go-to-market approach,” Technology Business Research senior analyst, Krista Macomber, added.

In line with objectives outlined by Whitman in 2015, Macomber believes such properties will “remain top of mind” for HPE as it seeks to improve its cost structure and secure its position as a transformation change agent for customers.


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