Little boxes made of ticky-tacky: What Dell's record-busting $67bn EMC deal means

Dell’s acquisition of EMC is large by several measures: a $67bn purchase price – the most ever paid in tech. The claimed joint revenue for Dell and EMC is $74bn and the current joint workforce is 140,000 – with 40,000 being sales staff. Even the statements as to “why” Dell is buying EMC are big – yuuuge - with Michael Dell at …

[Andy The Hat]

R&D budgets?

Anyone else curious how Amazon spends $12,5bn purely on R&D? Even the BOFH knows that much beer would be noticed on expenses ...

Blue Origin isn't on the Amazon account either ... unless they are doing research into really express deliveries so Amazon can pay BO ...?

[Anonymous Coward]

Re: R&D budgets?

What is considered "R&D" for tax purposes in the US is rather liberal. A software company can write off all their developer salaries/benefits/etc. as R&D for instance. They might have a way to write off a lot of the cost of deployment of their computing capacity since they're developing them themselves rather than buying rooms full of Dell blades as Dell would prefer.

Without being able to break down exactly what various companies are spending the money on it is hard to compare R&D budgets, since none of the companies listed in the article (except maybe IBM) is doing what we used to call "basic research" that led to the creation of things like the transistor and the laser.

[Anonymous Coward]

Hope it also results in the end of the EMC name - no longer getting involved in confusing conversations with system admins looking for advice on there EMC problems.

EMC Engineer

( That's Electro Magnetic Compatibility )

[MotionCompensation]

40,000 sales staff

Any organization that employees that amount of sales staff has completely missed the point of the cloudy world we're in now.

Does anybody know how many people Amazon employs for AWS sales?

[Anonymous Coward]

Re: 40,000 sales staff

AWS has a lot of sales people, probably closing in on 1,000 around the world... a large salesforce and growing at any rate. Google is rapidly building a world class sales org too.

I don't think sales is any less relevant in the cloud world. They are just selling managed services instead of components parts. IBM, Accenture and the other legacy managed services companies have always had large sales staffs. If you are spinning up a few instances, you don't need a sales person and there is no ROI for the company to hire sales people to convince you use cloud A instead of cloud B. If you are talking thousands of instances and millions of dollars, no one is going to pop a credit card number in for that transaction.... You need custom NDAs, custom SLAs, intergation planning, volume based discounts... and the cloud company wants to make sure you see a convincing presentation to use cloud A instead of cloud B or C.

Having written that, EMC has always had a crazy large salesforce. Much larger than their competitors. Definitely a sales driven company.

[Anonymous Coward]

I think this is going to be a mistake for Dell and the investors. EMC, of course, made the right deal for themselves at the right time. Just as their storage business was beginning to lose to cloud competitors, they punted the business at peak price. VMware also has a very uncertain future in the cloud world. AWS and Google are not going to be using VMware or EMC or any of their proprietary competitors. The last thing you want to be selling at this point is proprietary infrastructure. AWS and Google are going to continue to use open source everything and commodity hardware. Anyone who tries to compete with them using EMC storage and VMware is going to get slaughtered on cost. There is a long tail in enterprise tech, so it isn't going to happen overnight, but it will happen.

[Anonymous Coward]

"current joint workforce is 140,000 – with 40,000 being sales staff."

I sincerely hope that 40K includes customer support, field marketing and perhaps a few other functions. Otherwise it sounds very sales-heavy and technologist-light.

[EMC is the Best <3]

The Walking Dead

These old big infrastructure companies are the walking dead. All the old hardware manufacturers with crappy glued together "integrated systems" and appliances and "private clouds". They will die. What will happen is that Amazon or Googlephebet will get their SW and whatever cheapo ultraminimal commodity HW they're using this week into the datacenter. These massively scalable systems will have the same tech that these real cloud/internet companies use in house and will totally annihilate the shoddy super stale ways of EMC, Dell, Oracle, HP. Also, they will actually transparently scale to the cloud without filthy janky interconnects and piles of licensing and infrastructure middleware.The tech of the internet companies is totally superior to that of the infrastructure companies and the brainmine is ridiculously deeper. This comes from someone who has worked in and sold infrastructure for 20 years..

[Anonymous Coward]

Re: The Walking Dead

Hmm, I'm not quite sure. This is just a phase in the decentralization-centralization continuum and the pendulum currently is swinging back into the centralization space.

However, keep in mind that the advances done in this centralization phase, will feed the next decentralization phase, and there we go. Back and forth and back and forth.

So no, I don't believe this is the end of the giants. They will just adapt, wait, and grow again once we hit decentralization again.

[Anonymous Coward]

Re: The Walking Dead

I don't think so. I agree with the decentralization-centralization bit. This is a move back to centralization. I don't think this is a constantly swinging pendulum though based on the milieu of the time. Basically, you had IBM mainframes, which worked well but were very expensive compute... then you had PCs architecture, which worked poorly (as an architecture) but were relatively inexpensive so people had to deal with the inefficiencies to make mass market compute work... now you are going to have cloud which will work well and be inexpensive compute. It seems like progress more so than architectural fashions.... It is kind of like asking will we ever move away from centralized electricity distribution at utilities and towards everyone creating their own power again, I doubt it.

[Anonymous Coward]

Re: The Walking Dead

I agree with the walking dead. The cloud has some huge cost advantages over proprietary on premise. Google and AWS (potentially others) are going to use zero percentage licensed software in their infrastructure. They are going to use inexpensive, custom built scale out and clustered servers. That is a massive cost savings. They have the talent to create fully automated stack builds with zero human intervention. They have enormous economies of scale. This doesn't mean there will be no IT in house, but they will be different skills than racking and standing up servers, infrastructure.

It is possible that people will be able to rebuild all of this on prem, but, even if they do, if they want to seriously compete or even be in the same ballpark as the cloud providers, they cannot use EMC, VMware, MSFT, etc... so these traditional IT companies are in a tough spot. It is not like EMC is going out today or next year, but over the next decade or so.

[Speltier]

The Rentiers Are Coming!

There is a huge market for race to the bottom clouds. However, how many of these clouds are fully certified umpteen (expensive) ways? Oh, right, you wanted cheap... plenty of market for that. But will it pass audit?