Dell-EMC - how many other similar-sized mergers have worked, asks Nimble's Ajay Singh

Dell's big takeovers typically followed by the departure of key tech guys, warns Nimble

Nimble Storage has questioned whether Dell's merger with storage giant EMC will prove successful, warning that customers may suffer as Dell cuts costs to make its purchase pay and that investment in technology could be squeezed.

"Dell has always been known as the 'Wal-Mart of IT' - making IT cost-effective, efficient, cheap. It squeezes every bit of margin that it can, but it doesn't innovate. They've never created anything innovative," said Ajay Singh, vice president of product management at Nimble Storage.

He continued: "If you consider Dell's past acquisitions, none have been massive: EqualLogic, Compellent, vRanger. And the core teams have left shortly after the acquisitions. EMC is by far Dell's largest acquisition; it's enormous. Based on the history and culture of the company, people are concerned whether there will be continued investment in developing new products."

Furthermore, the history of big deals in the technology industry doesn't necessarily inspire confidence, he suggested.

"Sun-Oracle - Sun never recovered from that. They lost a massive amount of market share to IBM AIX in that one-year period when they were in limbo. DEC-Compaq-HP appeared a success, but it's nothing now. HP-Autonomy was only $11bn and everyone knows how that turned out. Oracle acquired Siebel, and that didn't do so well, either. I can't think of many positive outcomes.

"The acquisitions that seem to work best are when a big company with a sales and marketing machine acquires a small bit of technology, the next generation, and then putts it on its platform. EMC did several good acquisitions like that. They did it with Data Domain and Isilon," said Singh. However, they were relatively modest acquisitions by the standards of Dell-EMC, he added.

Furthermore, in addition to the ongoing questions over the financial viability of the deal, and how Dell will make it pay, there are also organisational questions the company has yet to answer, added Singh.

"It's merging two very different organisations; different in every way - culturally, their [different] strengths, their customer bases, which are not quite overlapping. So, it's going to be a very interesting proposition," he said.