The $67 billion acquisition of EMC by Dell announced Monday drew a sharp response from one of the new networking goliath’s future competitors.
Meg Whitman, CEO of Hewlett-Packard and soon to lead a newly created Hewlett Packard Enterprise, trashed the deal in memo to employees Monday.
She called the merger, which will create a huge company in the space HP sells to, “a good thing for Hewlett Packard Enterprise and an opportunity for us to seize the moment. This is validation for the strategy that we have laid out and I am not surprised that others would try to emulate it. But, the reality is that we are two years ahead of the game and it will be difficult for others to catch up.”
The deal will saddle Dell with debt while creating big headaches as Dell tries to merge two companies with $75 billion in revenue and nearly 200,000 employees. “This will be a massive undertaking and an enormous distraction for employees and their management team,” Whitman predicted.
“All of this at the very moment when we have completed our journey to create two new, focused companies,” she wrote.
Analysts said the deal should have minimal impact on another Silicon Valley company — VMware. EMC owns most of the stock in the Palo Alto virtualization software company, but has operated it hands-off. VMware will remain a public, independent company following the sale, Dell said.
Glenn O’Donnell of Forrester Research said Dell might have to sell some of its VMware shares to finance the EMC acquisition, but that would simply mean ownership of VMware would be more widely distributed.
Photo: The exterior of Dell’s offices in Santa Clara in 2012. (Associated Press)
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