EMC buy will help Dell India turn $3-billion company in 2 years

Dell’s announcement to buy enterprise storage maker EMC for $67 billion could boost the world’s second largest PC maker’s pace of growth in the Indian market, analysts said.

With revenue of over $2 billion from India in the last fiscal, Dell is the fastest growing company among its peers. It expects to cross $3 billion over the next two years, which until yesterday could be seen as an ambitious target but not so much anymore.

“The India market at this point of time is opportune for a Dell-EMC deal to take place considering India is still a host to large number of organisations who are yet to shift workloads to the cloud. The deal would put the company in a sweet spot as they would be providing end-to-end infrastructure in terms of both devices and storage,” said Sanchit Gogia, chief analyst at Greyhound Research.

“EMC Big Data analytics software would be a good addition to Dell’s portfolio of solutions. EMC’s Pivotal software would give Dell a good lead in complex cloud computing and data warehousing capabilities,” he said.

Will take on rivals

The deal will also allow Dell to compete better with rivals IBM and HP in large enterprise deals. “The acquisition will give Dell the kind of muscle power that it long needed to go big in the enterprise market,” said Nareshchandra Singh, Research Director at Gartner. “Dell has been traditionally strong in India in the mid-market segment while EMC has its strength in the enterprise space. This deal gives Dell a scale that it lacked in India while competing with IBM and HP and will help them in large end-to-end deals,” he added.

Dell, which has a workforce of over one lakh employees globally, has about 27,000 people working in its India offices. EMC, on the other hand, has 3,500 of its global workforce of 60,000 working in India.

While Michael Dell on a conference call said the layoffs would be minimal, Dell India can be impacted.

“With the deal size being large in nature, the financial implications will be felt throughout the company. In order to sustain the cost of the merger, Dell can look at workforce cuts. India specifically has substantial workforce under Dell, the consolidation of offices might cause disruption,” Gogia said.

However, Dell has been hiring in India even while it lay off elsewhere, which may be a breather for its Indian employees, at least for now.