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Tucci opens up on EMC’s sale

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One of the longest-serving chief executives in IT, Joe Tucci – CEO of EMC – has revealed some of his feelings, hopes and aspirations around the sale of the company to Dell for $67-billion.
The full blogpost from Tucci is as follows:
This is a bittersweet announcement for me. I am incredibly proud of the business we have built here at EMC. It has been a journey that I wouldn’t have traded for anything.  I love our people and the culture we have built. I owe each one of them an incredible debt of gratitude. And I thank our valued customers for their trust, business, and friendship.
But I also recognize the need for change, and size, coupled with focus of mission, and capabilities, matter! I believe that this transaction will put EMC and our terrific people in the best position possible to thrive in the new world order.
Today is a remarkable day in EMC’s history. In the past 25 years, we have transformed from a storage start-up to a global technology leader with more than 70,000 people. An incredible feat! During that period, we have seen good times, tough times, and yes even great times. And now we are entering a new era, where the entire information technology industry is experiencing massive disruption, while simultaneously being presented with unprecedented opportunity.
To keep us growing and thriving through the truly historic changes that are gripping our industry, and to help assure we capitalize on the vast opportunity before us, we decided that creating a new company with Michael Dell, an industry colleague and noted leader, and the team at Silver Lake is the best way to position EMC for success going forward.
The coming together of EMC and Dell will create a powerhouse in the technology industry with more than $80B in revenue. The combined company will be a leader in a number of the most attractive high-growth areas of the $2 trillion information technology market. It will have complementary product portfolios, expanded market reach, and four of the world’s greatest technology franchises: servers, storage, virtualization and PCs. Additionally, it brings together strong capabilities in the hottest IT trends, including digital transformation, the software-defined data center, hybrid cloud, converged infrastructure, mobile and security.
The combined company will be far more efficient and effective to operate as a private company, giving us the ability to incubate and develop new products and solutions necessary to capitalize on the opportunities I just mentioned. The new company will have more freedom to invest for the long-term, an increased focus on our customers and, very importantly, the ability to attract and retain the best and brightest people.
We are very excited by this opportunity, while being able to reward our EMC shareholders in such an attractive way.
The EMC Federation has created great momentum in the market place which we expect to accelerate. We see significant synergies between Dell and our Federation companies, especially VMware, which will continue to operate as a public company led by Pat Gelsinger. Together, Dell and VMware will have the opportunity to significantly expand VMware’s revenues in the areas such as the software-defined data center, hybrid cloud and end user computing. We estimate that these revenue synergies could top $1B over the next few years.
Pivotal will continue to operate as it has with Rob Mee as CEO and Paul Maritz as Executive Chairman. Paul and I are very happy with the progress Rob has made in the short time he has been CEO and Pivotal is making great strides in the marketplace. I believe they are well on their way to becoming a public company at some point in the not too distant future.
I have spoken many times about the impact that cloud computing, in all its forms, is having on the industry. Our Virtustream business, led by Rodney Rogers is a key part of our growth strategy, with its focus on managed cloud services for mission critical applications for enterprise customers. This, along with the growing momentum of vCloud Air, for hybrid usage, gives us unique assets. I truly believe that by combining our cloud assets and capabilities we can create a recognized leader in the on and off prem enterprise cloud industry.
The coming together with Dell will expand our joint cloud opportunities even further, providing more depth and breadth with enterprise customers, and, of course, in the government, healthcare and SMB markets, where Dell has core strengths.
Converged infrastructure is one of our fastest growing areas and with this combination our CI business will be incredibly well positioned. Our VCE business, when connected to Dell’s products and services, will grow faster and have a much larger impact on the industry than either one of us could individually. Michael and I have discussed this at length and truly see huge opportunity here. Of course we will continue the partnership we have with Cisco in networking, UCS and vBlock, and we will look for other complementary areas with them.
The opportunity for both companies in security is massive as we each have great assets and brands in this area. For sure, RSA and Dell’s Secure Works will be important parts of our future security strategy.
EMC Information Infrastructure, or EMC II as we call it here, led by David Goulden, is the largest business in the Federation. I am incredibly pleased that Michael and I have agreed that the headquarters of our combined Enterprise Systems Business will remain in Hopkinton, Massachusetts. In this business we will join our server, storage, converged infrastructure and other related capabilities. Our combined business will address more of our customers’ needs and will be front-ended by a large, world class go-to-market engine. Impressively, this business will start life with more than $30B in revenues.
From my perspective, EMC and Dell had one of the great partnerships in the IT industry from 2002 to 2008. This business reached approximately $2B in annual end user storage revenue and demonstrated that our teams worked well together and shared similar culture and values. Now, the winds of change have once again brought us together, and in fact we see this forming a tail wind that will help us move forward in creating a new company for the new IT era we are entering.
EMC’s Board and I have worked tirelessly over the last few years exploring a variety of options for EMC, and I truly believe this is the best way forward for us.
Of course, I will stay actively involved as CEO until we close the transaction, at which point I know Michael will do an excellent job leading the new organization.