By Charles King, Pund-IT, Inc. November 11, 2015
Like other major events, Dell’s stated plan to buy EMC for $67B has fallen off the front pages since it was announced on October 12. That’s perfectly natural from a news cycle perspective, since media organizations thrive on dishing up fresh material and opinions.
So unless something new or newsworthy arises, the 12-18 months of hard, practical work required to bring the Dell/EMC deal to closure will mostly occur offstage. But for those who watch IT more closely and carefully, what may appear to be unrelated events occurring during that long process can offer continuing food for thought on what will likely become the IT industry’s largest-ever merger and acquisition (M&A) effort.
I was reminded of that this week by an EMC press release announcing that Nina Hargus has become the Chief Marketing Officer (CMO) of EMC’s Information Infrastructure organization, making her responsible for the global structure, strategy and execution of marketing for EMC’s core storage-based solutions. That includes enterprise (Symmetrix) & mid-range (VNX) storage products, Isilon solutions, emerging technologies (cloud storage, ScaleIO, etc.), data protection & availability (Avamar, Data Domain, Networker, etc.), and information intelligence (Documentum, Project Horizon, etc.).
Hargus is a terrific choice for the role as she deeply understands EMC’s solutions and strategic plans. For the past three years, she has been CMO for VCE, where she helped the converged systems group achieve outstanding sales growth and success. Prior to that, she ran marketing for EMC Global Services (including leading the integration/marketing of five acquired companies). Earlier still, Hargus was a senior manager in EMC’s Global Alliances and Channel Marketing groups, and also held roles in engineering and product line management.
In other words, Hargus has both the experience and seasoning necessary for the far larger task of leading EMC’s overall marketing efforts. But why is that important and how does it relate to the Dell deal? Because her knowledge of core markets and customers makes Hargus a key asset to EMC in the months ahead, and to Dell after the acquisition is completed. Moreover, her proven marketing success with enterprise customers should prove highly valuable as Dell’s expands its own enterprise-facing efforts. And Hargus is just one executive occupying what many would argue is one of the IT industry’s deepest leadership benches.
As such, Hargus underscores the role that “human assets” can play in helping M&A efforts succeed. In fact, it isn’t an understatement to suggest that deals which fully leverage the talents of acquired companies’ executives and personnel find success more fully and more often than those that do not.
Interestingly enough, there’s clear evidence that Dell and EMC both understand and follow this line of reasoning. Since 2001, EMC has completed over sixty acquisitions that helped it grow far beyond its storage roots and become a broadly-based purveyor of enterprise computing solutions and services. The company largely avoided substantially reducing headcount in the companies it acquired, and in most cases key executives remained with EMC beyond the post-acquisition integration process and continued adding value.
A good example of this is Rob Mee, who founded Pivotal Labs in 1989 and ran the company until it was acquired by EMC in 2012. In 2013, EMC added assets of its own and from VMware to Pivotal, then named then-VMware CEO Paul Maritz to run the combined organization. Mee remained on the group’s management team, gaining additional experience until earlier this year when Maritz became Pivotal’s Chairman and Mee was elevated to CEO.
Dell’s M&A efforts have been even more significantly evolutionary than EMC’s. Prior to Michael Dell’s return as CEO in January 2007, the company had completed just five acquisitions in over two decades of operations. But since 2007, Dell has acquired over two dozen companies, many of which allowed the company to establish and build leadership positions in existing and new markets.
For example, the 2009 purchase of Perot Systems jump-started Dell’s professional services business, and resulted in the company becoming and remaining one of the world’s largest suppliers of IT services for healthcare. In a different vein, the 2010 acquisition of Boomi provided Dell robust data integration technologies that are valuable parts of the company’s hybrid cloud solutions portfolio.
Dell has pursued numerous other, similarly transformational acquisitions, including EqualLogic and Compellent (storage), KACE and Quest (systems software), Wyse (cloud and client computing), SecureWorks and SonicWall (security), and Force10 (networking). All along the way, those acquired companies’ leaders and personnel helped their organizations excel within Dell, thus benefitting the larger organization.
As a result, in less than a decade, Dell expanded beyond being an innovative leader in personal computing to becoming a purveyor of end-to-end IT solutions with a substantial focus on mid-market businesses. The purchase of EMC marks the next logical step in Dell’s evolution. But the enterprise focus of the deal and EMC’s long experience with large business customers underscores the substantial value that it should provide.
Add in EMC’s executive and management talent and you can see why Michael Dell and company are so high on the acquisition. Respecting that kind of hard earned expertise and using it to improve their own organization is deeply ingrained in the company’s DNA. If its past M&A efforts are any guide, Dell clearly recognizes the value that EMC personnel add to the planned acquisition, and understands the crucial roles they will play in its overall success.
© 2015 Pund-IT, Inc. All rights reserved.