Dell: Where Backup Goes to Die

As you no doubt have heard by now, Dell is buying EMC for $67B which represents the largest technology take-over in history.  Dell already had $12B in debt; the Wall Street Journal reports

Dell said the combined company “will focus on rapidly de-levering” in the first 18 to 24 months after the deal closes, which it expects to happen between May and October of 2016.

In case you’re not an investment manager, “de-levering” refers to a company’s decrease of its financial leverage.  The best way for a company to delever is to quickly pay off any existing debt on its balance sheet.

So what does this mean for backup?  And why the headline: Dell: Where Backup Goes to Die?

Dell has a history of buying backup companies.  Dell has bought AppAssure, SonicWall (with their CDP product), Ocarina (DR-series deduplication devices) and Quest (with vRanger and NetVault.)  This, combined with the company’s storage unit relationship with CommVault, has led to some interesting times for the customers of these products as Dell has attempted to sell and support the products.  Now with the EMC purchase Dell is buying EMC Networker, Avamar, Mozy, Data Domain, Data Protection Advisor among other assets.

What Dell and EMC backup products will get de-levered in all of this?  Or to put this more bluntly, what Dell and EMC products will be deprecated or even shut-down entirely in an attempt to reduce debt at the combined company?  It’s one thing to do M&A (Mergers & Acquisitions) in order to create new offerings to customers – it’s another thing when your M&A results in a plethora of overlapping products and your debt load is such that you officially announce that one of your first tasks will be to reduce that debt.

At one point EMC was so dominant in storage that there were those that said no one ever got fired for buying EMC.  Those days of course are long gone.  I wonder – how sound are your career prospects if you buy Dell or EMC backup products at this point?  Because at the end of the day, it doesn’t matter whether Dell decides to “de-lever” yet another backup product – what matters is how it impacts the careers of the IT professionals who made a decision to invest in those products.



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