Michael Dell today revealed the new names, and yes we are talking multiple names, for the artist formerly known as the Dell-EMC deal. EMC will be deprecated for the main branding Dell Technologies, but will live on for the enterprise brand Dell EMC while the client services business will be called Dell, Inc. according to multiple reports.
Confused? I’m sure you’re not alone, but Dell was reportedly very excited about the new brands as he spoke about them on stage at EMC World in Las Vegas today. I suppose when you spend $67 billion, a few extra names makes sense — more names for your buck. Other brands like VMware, Virtustream, RSA and Pivotal will also reportedly live on.
If you aren’t familiar with the deal, it has gone through some twists and turns, but last October Dell surprised the world by announcing it was buying EMC for $67 billion in what’s believed to be the largest technology acquisition in history. It involves a mountain of debt, approximately $40 to $50 billion, depending on which reports you believe, and it will likely require selling off pieces of both companies to pay the deal.
We’ve already seen Dell sell its services division, formerly known as Perot Systems, to NTT Data for $3.05 billion and spin off SecureWorks in an IPO last month. We’ve seen EMC announce layoffs while rumors swirl it’s trying to sell its content management product, Documentum, ahead of finalizing the sale to Dell. We’ve seen VMware suffer wicked stock price swings since the deal was announced, and announce layoffs of its own.
We might not have seen the last of these various side deals ahead of the closing. With that much debt, it’s clear Dell will have to sell off some more of these pieces to help pay for the deal. It’s entirely possible we will see it sell off at least part of its stake while maintaining majority control in VMware. EMC owns approximately 80 percent of VMware, which operates as an independent company.
Dell believes by combining with EMC and getting bigger, it will put it in a position to compete in the enterprise market. It’s not clear that’s a valid thesis or if Dell can justify the debt for buying EMC. Only time will tell if it got a reasonable return on its investment.
What we didn’t know until today is what the new company will be called. It’s worth noting that the deal still isn’t official, but it is expected to finally go through some time later this year if there are no other glitches or shoes dropping, that is.
