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Dell-EMC Merger Aims to Penetrate the Enterprise Storage Space

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Combined entity will lead the enterprise storage market

According to IDC, Hewlett Packard Enterprise (HPE) led the enterprise storage systems market with a share of 17.3% in 1Q16. The other top players in this space include EMC (EMC), Dell, NetApp (NTAP), Hitachi, and IBM (IBM) with shares of 16.4%, 10.3%, 7.9%, 6.3%, and 5.8%, respectively. Following the Dell-EMC merger, the combined entity will be called Dell Technologies and will lead the enterprise storage systems market with a share of over 25%.

Dell specializes in serving small and midsize customers, and EMC specializes in serving enterprise customers. The combined company will have a broader menu of services to offer and a greater customer reach, which will generate significant cash flows.

In the Dell conference call last year, Michael Dell mentioned the company’s plan to put its server business into EMC’s enterprise data center business, creating an enterprise storage segment worth more than $30 billion.

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Dell can leverage EMC’s position in the all-flash segment

EMC (EMC) is one of the leaders in the storage business. It also has a majority stake in VMware (VMW). According to International Data Corporation’s Worldwide Quarterly Enterprise Storage Systems data, EMC continued to dominate the all-flash market with revenue of $245.6 million and a share of 30.9% in 1Q16.

EMC also stated that 15 of the top 20 banking and finance companies on the Forbes Global 2000 Top Companies List purchased flash solutions from EMC in 2015. EMC’s revenue from telecommunications, media, and entertainment companies also rose by 316% year-over-year in 2015.

In the final part of this series, we’ll look at analysts’ take on EMC.

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