Dell invests big in enterprise, acquires storage company EMC, Financial Times staff approve ‘industrial action’ over pensions
Morning Brief: The Sunday Times stirs up the Russian officials over headline suggesting RAF fighter pilots are authorized to shoot down Russian planes over Syrian airspace
Big tech companies acquiring small start-up is a common occurrence in the industry, with Apple, Google and others regularly announcing small deals. But a big company swallowing up another big tech company is rare, and rarely turns out well. HP’s purchase of Compaq is the model, and the cautionary tale.
But that isn’t stopping Dell from acquiring storage maker EMC for about $67 billion in a deal backed by the investment firm Silver Lake.
“The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment,” Michael Dell said in the company’s announcement. “Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security.”
Dell took his computer company private two years ago, so the company will not have to worry about investors trashing his stock over this deal. The goal here is to dominate the IT market, with Dell attempting to make sure that whenever servers are deployed in enterprise environments, it will be Dell equipment being used.
The acquisition comes at a time with EMC sauys sees trouble on the horizon. “While pleased with many aspects of the second quarter, especially with the market acceptance and rapid growth of our newer products, we also saw customers become more conservative around refreshing their traditional infrastructures as they plan their IT transformations,” Joe Tucci, EMC Chairman and CEO, said in its last earnings statement.
David Goulden, CEO of EMC Information Infrastructure, was more positive about prospects, saying that “our new businesses are performing exceptionally well, with the Emerging Storage business now at nearly a $3 billion revenue run-rate, which we expect will grow more than 30 percent in 2015.”
The deal will maintain VMware as a publicly-traded company. EMC had acquired VMware in 2004 in a $625 million deal, but then released 15 percent of the company’s shares in an IPO in 2007.
While few in the West, beyond their loyal readership, would ever take any of the Murdoch newspapers seriously at what they say, Russia is apparently doing so. Russia’s ambassador to Britain is demanding an explanation concerning a report in the Sunday Times that said British pilots have been given permission to shoot down Russian planes.
RAF ready to shoot down Russian aircraft over Syria is a three paragraph story that says RAF aircraft now are equipped with heat-seeking missiles that could destroy aircraft in air-to-air battles. Not that big a deal, unless you put a sensational headline about the Russians on the story.
“We have urgently requested explanations from the Foreign and Commonwealth Office,” said Ambassador Alexander Yakovenko, though any response from the UK government might simply be “that’s Rupert for you.”
Meanwhile, in an interview late last week, Greg Miskiw, former head of news at Murdoch’s now shuttered News of the World, said English football star David Beckham’s voicemails were hacked regularly: “routinely, all the time, over and over again.”
Miskiw served 37 days of a six month sentence after pleading guilty to conspiracy to intercept voicemail messages. Rebekah Brooks, who was editor of the tabloid from 1989 to 2003, was recently made chief executive of News UK.
The Financial Times may be facing a strike. The issue at the center of the employee discontent is pensions and a single word: “equivalent”.
Steve Bird, the National Union of Journalists’ father of chapel (or shop steward), said the paper’s new Japanese owner Nikkei have gone back on a promise to provide “fair and equivalent” conditions following the acquisition of the property from Pearson.
Nikkei, it is claimed, would like to save £4 million a year through pension changes. This lead staff represented by two unions, including staff editorial, advertising, IT and other employees, to vote to authorize “industrial action.” A resolution was passed that reads:
We are very concerned at the suggestion that staff will be left in pensions limbo on auto-enrollment should the FT-Nikkei deal be signed before any agreement on new pension schemes has been completed. We would actively support any staff choosing to take industrial action in defense of these principles.
“This shabby treatment of staff is far from the behavior we’d expect from a FTSE 100 company,” Michelle Stanistreet, NUJ general secretary, said. “It is vital that Nikkei now involves itself properly in this consultation process and demonstrates to FT staff that they will be treated fairly and equitably. The main asset Nikkei is buying is the talented and committed team of staff who make the FT such an attractive acquisition – treating them with respect and fairness and not jeopardizing their goodwill should be Nikkei’s overriding priority if the sale is to conclude smoothly.”