What’s a storage giant to do to stay in the game if it’s spent the past several years neck-deep in working out an enormous acquisition? For newly public Dell, the answer should be going back to the M&A field.
Our co-founder and CTO, Laz Vekiarides was an executive at Dell, brought on board when they acquired EqualLogic in 2008 for $1.4 billion. He is familiar with the workings of Dell, and used this knowledge to speculate in a recent article on what might be in store for Dell after its return to the public markets.
In short, now that Dell is public again, thanks to a controversial reverse merger with VMware, it needs to move beyond the massive challenge of integrating EMC, which it bought for $67 billion in 2016, and start bringing innovative storage solutions to market. Putting product and technology development on the back burner for two years is understandable, but slower innovation in Dell’s product line could mean it watches from the sidelines as competitors move past it. This is particularly vital as the very nature of how IT approaches technology purchases is changing from a hardware-centric model to one based on hybrid cloud services.
According to Stratistics MRC, the global cloud storage market will be worth $207 billion by 2026, just seven years from now. Dell could try to develop new, services-based solutions internally, but the latency issues inherent in any cloud service are not simple to overcome. To grow fast enough in services to keep up with competition from companies such as HPE, NetApp and Pure, Dell will need to turn to the M&A market to acquire innovators. That kind of activity will likely spur similar M&A action from competitors, increasing valuations and accelerating exits in the storage startup space.
Want to read more? Check out Laz’s recent op-ed at VentureBeat, where he explains, in-depth why M&A is vital for Dell in its new public form, and what that will mean for the storage technology market in general.