Survey Shows 31% Of Customers Are Optimistic About The Dell- EMC Corporation (NYSE:EMC) Deal

A survey has shown that 31% of polled IT decision-makers are constructive about the planned tie-up between Dell Inc. and EMC Corporation (NYSE:EMC). Analysts also believe that Dell will be the clear winner if the transaction is concluded. Among other benefits, analysts see Dell expanding up market (to the large enterprises market) and also getting exposure to the crown jewel, VMware, Inc. (NYSE:VMW).

Dell Inc. has not yet started to aggressively pitch the benefits of its acquisition of EMC to customers. However, early assessment of customer feelings shows that a substantial number of potential customers are positive about the deal. According to 451 Research, its survey established that 31% of IT decision-makers are optimistic that the merger of Dell and EMC will result in better things for them. However, 20% of the customers surveyed sounded negative.

If the findings by 451 Research about customer perception are anything to go by, it could mean that Dell’s move is being received well by potential customers – a possible early blessing for the deal.

EMC customers more skeptical

Nevertheless, 451 Research noted that customers on the side of EMC are a bit more skeptical about the outcome of the tie-up than those of Dell Inc. . That can be expected though, because the companies haven’t started to deeply engage their customers about the benefit of the deal. Additionally, competition is already using the uncertainly created by the merger deal to try to sway customer sentiments with hopes that they could draw them away. For example, Hewlett-Packard Company (NYSE:HPQ), one of the competitors of Dell/EMC, has already termed the deal a nonstarter.

Heavy debt is a cause for concern

For analysts, the greatest risk to the Dell/EMC merger is that it will result in a heavy debt load, thus potentially impacting R&D spending and other growth projects.

Potential benefits

For the most part though, analysts are constructive about the Dell Inc. -EMC marriage. They see a new leader in the IT market emerging with the potential to cause serious disruption to other established players. The areas that could see major disruption from the Dell/EMC tie-up include software-defined datacenters, converged infrastructure, hybrid cloud, security and mobile.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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