So, the year-long merger talks between Hewlett-Packard and EMC have gone south, and the two will not be merging to create a tech company larger than IBM. And it wasn’t EMC’s $60 billion price tag, there’s still a lot of room in the Silicon Valley bubble yet.
They simply couldn’t agree on terms that would satisfy HP’s shareholders, or EMC’s investors who pushed for the merger to see their stock soar.
Where do they stand now, these two? Still rivals in the converged infrastructure market, they’ll continue to team up on complementary solutions that neither can offer independently. HP has the storage solutions, servers and desktops everyone wants, while EMC is virtualizing practically everyone’s data management through its crown jewel, VMware.
It’s good to keep your friends close and your competitors closer.
Now, it takes a triumvirate to make for good drama. HP and EMC are allies in a common battle against Cisco, which is currently being downsized and downgraded by CEO John Chambers as he prepares to retire in 2016. They’re missing targets, cutting thousands of jobs and losing share value, the equity they need to aggressively invest in their business and outpace the other two.
They’re a limping gazelle on the Serengeti, with two cats panting in the grass.
But don’t cringe just yet. This will take some time to play out. HP will remain the powerhouse it is, while EMC will run the world’s data centres. But here’s the kicker: I see a strong likelihood of Cisco and EMC merging. Give it two years.
What’s your take? Where do you see the converged, virtualized big data world heading? Please feel free to weigh in below.