EMC SVP Tries To Convince Employees: 7 Reasons Dell Deal Makes Sense For Us

Sales VP Preaches Optimism

A top EMC sales executive has taken to the company's intranet to make a personal plea in defense of the company's $67 billion merger with Dell.

Steve Crowe, senior vice president of global specialty sales and leader of global sales transformation and go-to-market, shared what he called his "personal feelings and thoughts around the proposed EMC-Dell merger" in a video recording posted on the company's employee intranet.

Those personal feelings and thoughts include the insight that the reseller agreement between Dell and EMC that ended in a messy divorce in 2011 is proof that the two companies' go-to-market strategies are complementary.

"I've really thought this through quite a bit," Crowe said, according to a transcript of the presentation filed with the U.S. Securities and Exchange Commission. "The thoughts I'd like to share with you today are truly my own, personal, authentic thoughts. These are not bullets from marketing. These are not bullets from investor relations. This is truly how I feel in my gut about this proposed merger."

Crowe's presentation was filed just three days before a separate filing providing a little detail about planned job cuts under a restructuring initiative aimed at cutting $850 million in costs annually. Here, in Crowe's own words, are seven reasons the Dell merger is a good thing for EMC employees.

Customers Want It, And It Will Accelerate Growth

"Our customers want fewer, more strategic partners. Why is that? Most of our customers are struggling with agility. Our customers are struggling with keeping pace with their industries and markets. Our customers are struggling with innovation. When they struggle with agility, when they struggle with innovation, they really want to winnow down the number of relationships they need to have, and go deeper into those relationships, so they can learn, and they can move more quickly. … You want to merge to accelerate growth. ... We believe this is a growth agenda."

EMC And Dell Work Really Well Together, Like In That Old Reseller Agreement

"I think, really, top to bottom, left to right, our product lines are very complementary, and are very synergistic. That’s why Dell, No. 1. Why Dell, No. 2, our go-to-markets are very complementary. If you think about it, EMC, we are known for our enterprise brand in global accounts, in enterprise accounts, in the midmarket segment of the industry. By the same token, Dell is exceedingly well-known for their brand in the SMB business space, in their electronic commerce channels. It is a perfectly co-related and perfectly complementary go-to-market. If you think about it, remember our Dell reseller relationship from about four or five years ago, we took our VNX technology, we lined up with Dell and put it through the Dell distribution channel both through SMB as well as some of the key verticals that they’re good with. Within about 24 months, we grew that to a multibillion-dollar resell business. We've already proven in the past how complementary our go-to-market and our products' strengths are."

We Also Get A Server

"With Dell, we also get a server. It's pretty clear the industry is going converged. Now that we have the EMC capabilities with the Dell and the server capabilities, imagine the innovation we are going to be able to drive and the converged infrastructure stack. As we've said over and over again, VCE, incredibly important, obviously part of our business, we are going to continue to maintain a very aggressive and positive relationship with Cisco. That's been written about in the press by both Michael Dell and Chuck Robbins, the CEO of Cisco. There is a huge market for Vblocks and Cisco-based Vblocks. We are also going to be able to innovate around Dell server technology and converged infrastructure. This really puts us in a leadership position for the fast-growing converged infrastructure part of the market."

Dell Is Going To Lean On EMC For Enterprise Solutions

"The intent with the merger is for EMC to become the enterprise solutions business for EMC and Dell, and it will be managed out of [EMC headquarters in] Hopkinton [Mass.]. Dell, in fact, has stated they are going to take some of their key enterprise assets and move them into EMC, so we, EMC proper, will be able to maintain, stay highly focused on the enterprise business segment. By the same token, imagine the strengths of Dell in the SMB and other parts of the market where they are so powerful, and we can take advantage of those as well. Structurally, we are going to be in great shape moving forward. In fact, our enterprise solutions group will now become double the size. Today, our enterprise business loosely is about a $16 billion business. We take the Dell assets, fold that in, we are $30 billion-plus business. So overnight, we are double in size. Structurally, the fact that EMC will really be driving the enterprise business, I think is very critical. That’s No. 1."

Going Private Will Be Cool

"I think we can’t overstate how cool it's going to be that we can go private. As a private company, we are not going to be held to the altar of quarterly 90-day financial metrics we must hit for the Street. By going private, we are going to be able to take a longer view on the business, make the right long-term investments, and make the right long-term decisions for our customers. Going private is going to enable a tremendous amount of flexibility. Think of something simple like flexible consumption models. It's really hard for us when we have to hit quarterly numbers to really passionately proactively go forward with flexible consumption-model offerings for our customers, right? For a private company, now we have the flexibility to do that. I think we can’t overstate [the] importance, structurally, of [being] a private company."

EMC Can Afford It

"I'll talk just some quick financials -- there's been some FUD [Fear, Uncertainty and Doubt] thrown around by a few of our competitors who have said, 'This is a $60 billion-plus debt transaction. If EMC and Dell are going to pay the interest, we're going to have to starve our research and development.' Nothing could be further from the truth. As a matter of fact, our competitor who is spreading some of this FUD, they are the ones that say EMC is going to have to pay $2.5 billion a year in interest. You know what? Today, EMC generates almost $5 billion a year in cash flow. We already give almost $3 billion a year back to our shareholders through dividends and share buybacks. That $3 billion can just be used now to service the debt interest, and we don’t have to touch our R&D. In fact, we can increase our R&D and invest more in innovation. Again, we have the financial wherewithal to do this and allow us to continue to innovate and in fact double down [on] our innovation going forward."

Michael Dell Is Really Smart

"I had a unique opportunity to actually meet Michael Dell a few weeks ago and spend a little bit of time with him one on one. I found Michael to be, No. 1, really smart. No. 2, he is bold. … This takes someone bold, and in an industry environment like this, we need bold decision making and bold leadership. Michael is clearly bold. … Michael is very humble, and he was very authentic. I look at an individual like that, and he has a lot of the same qualities of (EMC CEO) Joe Tucci. That’s the kind of leader I want to follow into the future. As you have an opportunity to meet Michael, or see him, or hear him speak, I think you are going to feel really, really good about the leadership that's going to take us forward. ... Good luck and good selling."