We are in the midst of a tectonic shift in enterprise technology as the cloud has an ever-growing impact on how businesses provision infrastructure and software. Established vendors used to selling copious amounts of hardware and software have been experimenting with various strategies to deal with a rapidly changing marketplace. This has taken several forms including getting bigger, forming partnerships, splitting in two and selling off unprofitable pieces.
Just this morning, we heard about Ericsson and Cisco coming together on a strategic partnership that they claim could result in a billion dollars in sales for each company in the coming years. While that’s not nearly as big a number as it sounds in enterprise tech terms, it’s not chicken feed either. It’s also a sign of two old-school networking companies recognizing that by working together they can help increase sales in a changing market.
Just last week, Red Hat and Microsoft announced a similar partnership, reaching a deal to sell Red Hat Enterprise Linux on Microsoft Azure. Talk about strange bedfellows, but both companies recognize they are better off trying to work together. Enterprise companies want to use Linux, and increasingly they are launching servers in the cloud. It’s a win-win situation for companies used to competing with one another, and it’s just smart business.
Sometimes two heads are really better than one and you can do something together that’s hard to do as an individual (disrupted) company.
That’s the idea behind the Dell-EMC deal. Dell believes that by buying EMC and VMware, and getting much bigger, it can compete more strongly in the enterprise. Whether that’s the case or not, time will tell.