What the Dell/EMC breakup means for the storage industry

Dell and EMC have both decided not to enter another formal alliance, a decision analysts say is a very significant change in the storage industry’s dynamics.

IDEAS International analyst Chris Ober said Dell learned a lot about the enterprise storage business through its EMC partnership, but now has work to do.

“It's more than just the products that they have in their portfolio, it's about getting the internal company culture (sales/marketing) right,” he wrote. “Now they have their own (acquired) product lines they need to leap frog from there. The change from traditional scale-up storage systems to the scale-out Equallogic & Compellent products should give them the 'moment in time' opportunity to do this.”

IBRS analyst Kevin McIsaac said the split was “no great surprise” and said it is a good move for Dell.

“I have been saying for about three years that the whole world is moving towards vendors who sell a full range of kit – not just vendors who sell servers or networks or storage. This is an affirmation by Dell of that model as HP and IBM have done.”

But EMC, he feels, now has a significant challenge ahead.

“The the real question is what happens to EMC in a market where in the long term I [as a customer] will go to a single vendor to buy all my parts,” he said. “I know EMC has an offering to do so today [through its VCE alliance with Cisco and VMware], but in the long run will that make EMC not so competitive?”

Ober also found a new challenge for EMC.

“With EMC it will be interesting to see what they have learnt over the years about the SMB market,” he wrote, adding that both companies also have plenty to do in order to evolve their product ranges.

“The bigger challenge for both companies is how they adapt to the next generation of storage (eg: the SCM model that SNIA promotes). That appears to be the next major disruptive technology in the storage space.”

This was first published in October 2011