 "There will be some cost rationalisation; some of this will be people: Howard D Elias")
What brings you to India now, since you are anyway busy with the integration of Dell-EMC?
I am here to inaugurate our second centre of excellence (CoE) in India. India is an important part of our overall global footprint. We have been in India for a number of years and our largest CoE is in Bengaluru. We had in the past decided to continue to invest in India but we were prudent enough to realise that we would need a second centre so that we have access to more talent here. While we could have built services capability anywhere in India but our model is of integrated services of excellence, that means not just services but product engineering and support all co-locate.
How is the process of integration of Dell-EMC going on?
The Dell-EMC merger is one of the largest in the tech industry and hence the integration too is one of the largest. The integration so far has gone extremely well. At a high level we are on track, we are executing exactly on plan on the original terms and time. We have always said that transaction will close sometime in May-October. The reason is because of the vast range of geography we have to cover. We have hundreds of people working in several teams who are thinking on go-to-market initiatives, services to right up to support services.
We think of this process in three phases. The first phase was all about mobilisation, and this was really early. This meant forming the team, getting the structure in place, determining the sequence and how it will roll out, which will be completed in May.
The second phase is the actual integration and this will go through close. On day one, a lot of things will change but there will many things which won't. That will lead into phase three which is full integration and transformation and it will go on for couple of years.
Since it's a huge integration what is the scope for rationalisation?
Dell has talked about divesting some assets to rationalise its portfolio and also fund some of the debt. That will continue. In any large integration there will be some level of duplication especially in the back office functions, having said that, the business case we have and because the nature of combination is so complimentary in product and technology, in customer and market segment, there is little overlap.
We see the ability to cross sell our various products and technology into each other market as well as create new solutions. We think the revenue synergies is three times than the cost synergies. That being said, there will be some cost rationalisation. Some of this will be people, some non-people. There will be some impact, we are yet to finalise on that.
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Will there be any impact on India?
I see very little impact because of what we do here. Dell's focus here is client solutions business and server business. There is no overlap in what EMC does, which is focus on virtualisation, storage etc. We are yet to finish our detailed integration plan country by country so cannot comment more. But for the most part we think we see growth opportunities here.
EMC is already partnering in several of the mission critical national technology roll out that includes projects like Aadhaar, passport system, and excise.
How do you see competition from cloud players like Amazon, Google and Microsoft in the enterprise space?
Most enterprises have enough scale to be able to have affordable infrastructure. But it is more about creating an agile and flexible model. In fact for enterprises, it costs more if they adopt SaaS or cloud model over time, especially if you have a very predictable consistent work load. If your work load goes up and down then it's different.
Our focus is on hybrid cloud, the ability to have customer have set of applications independent of where the infrastructure sits, much of that infrastructure will be within the data centres, what we want to then do is to help our customer to built a very efficient, cost effective, agile private cloud platform but also have the ability to leverage the SaaS and the public cloud. In fact one of things that the Pune site is working on is in the data protection area, the ability to do backup to the cloud.
If you see the technology industry history large acquisitions have not done too well. What makes you confident that Dell-EMC merger will work?
I worked on Compaq acquisition of Digital Equipment Corporation and then on HP-Compaq deal. Both of those and especially Compaq-HP, were very tough on integration because of lot of product, customers and sales overlapped and that had to be rationalised. In such condition integration is a challenge. On top of that there was a proxy battle within HP. Additionally, culture was a huge issue.
Here we have many things going for us. Instead of direct overlap, the overlap is minimal. Whereever there is overlap, it is only complimentary. Our go-to-market and customer portfolio are complementary.
We have had a partnership of eight years and that grew to over $2 billion. Joe (Joseph Tucci, CEO, EMC) and Michael (Dell) know each other for long.
Initially people did say that the culture at both the organisations is different, but I have a different perspective. Our culture is actually more similar than what you might think, we just apply it in different ways. Dell applies their culture to very high volume, velocity, large transactions to a large number of SMEs. Our culture applies to high touch, mission critical technology enterprise segment etc. But our culture are same in the sense smart people, customer focused, results driven, wanting to win in the market.