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Wow; an excellent piece from a16z! Not only is it the best piece of analysis I've seen on the merger, it's arguably the best piece of (free) analysis I've seen

Wow; an excellent piece from a16z! Not only is it the best piece of analysis I've seen on the merger, it's arguably the best piece of (free) analysis I've seen on any merger before it actually closes. One question: Oracle has long been rumored to be interested in EMC, and they have a history with the Sun acquisition of surprising other potential acquirers. Especially with the "go-shop" clause, it seems likely that EMC is being explicitly shopped to Oracle; I wonder if the authors of the a16z piece see an Oracle acquisition of EMC/VMware as a possibility. It seems that Oracle has the cash on hand to make a better offer -- and that a combined Oracle/EMC makes more sense from a product mix than Dell/EMC. (Indeed, I wonder if a combined Oracle/EMC wouldn't be such a menace that there would be regulatory questions.) Are there other potential acquirers here that could derail Dell/EMC?

chris_wot 11y ago
What, you get two large, amoral, incompetent, slow-moving and anti-competitive firms to merge? They'd destroy each other - can you imagine Joe Tucci and Larry Ellison trying to duke it out for supremacy? Actually, on second thoughts that would destroy both EMC and Oracle. I say let it happen.
- bcantrill 11y ago
  Well, EMC management is retiring no matter what happens -- so I don't think it would be much of a battle. I also don't think that there is much of a contest between EMC and Oracle in terms of bad behavior: while they might have been similar five years ago, Oracle has distinguished itself with its astonishingly bad behavior in the wake of the Sun acquisition (e.g. Hudson, MySQL, Java, OpenSolaris, OpenOffice, and especially Oracle v. Google) -- and this is to say nothing of their extortion with respect to cloud revenue and license auditing.[1] The big loser here (and indeed, in all of these scenarios) is the EMC customer held hostage by ancient architectures -- and I'm sure that regardless of the outcome, plenty of EMC customers will be accelerating their plans of moving towards open infrastructure... [1] http://www.businessinsider.com/oracle-customer-explains-audit-threats-2015-9 http://www.businessinsider.com/oracle-customer-explains-audi...
  - chris_wot 11y ago
    OK, fair point - that sounds more likely.
tw04 11y ago
I can't see any way that Larry can acquire EMC without having his shareholders revolt. After they bailed out his personal investment in Pillar Data, this would basically be admitting what actually happened.
- bcantrill 11y ago
  Well, it wasn't much of a bail out: Pillar was acquired with 100% earn-out -- in the words of the SEC filing on the acquisition[1] "we will not make any upfront payments to Pillar Data or any Pillar Data stockholders, including Mr. Ellison, or option holders upon the closing of the acquisition." (Pillar owed Ellison $544M at the time of the acquisition, and even that was converted into a slice of the earn-out.) The decision to buy Pillar wasn't without controversy (and indeed, there was a shareholder suit over it[2]), but that was also a much cozier situation than EMC. So the shareholders might revolt -- though seeing the Axis-like power of a combined Oracle/EMC, they also might not... [1] http://www.sec.gov/Archives/edgar/data/1341439/000119312511176479/d8k.htm http://www.sec.gov/Archives/edgar/data/1341439/0001193125111... [2] http://www.bloomberg.com/news/articles/2013-10-03/oracle-s-ellison-forgoes-payout-to-settle-pillar-buyout-suit http://www.bloomberg.com/news/articles/2013-10-03/oracle-s-e...
  - tw04 11y ago
    While I am happy to defer to someone who I think is a bit more connected through previous relationships to what's happening at Oracle, I will say the one thing I take issue with is the way they phrased the earn-out. It's based on net revenue, not income. This is Larry we're talking about, there's plenty of ways to make the revenue of Pillar look good enough to get paid, even if it's not REALLY making any money. Sell a database, get a "free" Pillar system. But hey, the Pillar system is what you really paid for, we gave you the licensing for free!

chris_wot 11y ago

What, you get two large, amoral, incompetent, slow-moving and anti-competitive firms to merge? They'd destroy each other - can you imagine Joe Tucci and Larry Ellison trying to duke it out for supremacy? Actually, on second thoughts that would destroy both EMC and Oracle. I say let it happen.

bcantrill 11y ago
Well, EMC management is retiring no matter what happens -- so I don't think it would be much of a battle. I also don't think that there is much of a contest between EMC and Oracle in terms of bad behavior: while they might have been similar five years ago, Oracle has distinguished itself with its astonishingly bad behavior in the wake of the Sun acquisition (e.g. Hudson, MySQL, Java, OpenSolaris, OpenOffice, and especially Oracle v. Google) -- and this is to say nothing of their extortion with respect to cloud revenue and license auditing.[1] The big loser here (and indeed, in all of these scenarios) is the EMC customer held hostage by ancient architectures -- and I'm sure that regardless of the outcome, plenty of EMC customers will be accelerating their plans of moving towards open infrastructure... [1] http://www.businessinsider.com/oracle-customer-explains-audit-threats-2015-9 http://www.businessinsider.com/oracle-customer-explains-audi...
- chris_wot 11y ago
  OK, fair point - that sounds more likely.

tw04 11y ago

I can't see any way that Larry can acquire EMC without having his shareholders revolt. After they bailed out his personal investment in Pillar Data, this would basically be admitting what actually happened.

bcantrill 11y ago
Well, it wasn't much of a bail out: Pillar was acquired with 100% earn-out -- in the words of the SEC filing on the acquisition[1] "we will not make any upfront payments to Pillar Data or any Pillar Data stockholders, including Mr. Ellison, or option holders upon the closing of the acquisition." (Pillar owed Ellison $544M at the time of the acquisition, and even that was converted into a slice of the earn-out.) The decision to buy Pillar wasn't without controversy (and indeed, there was a shareholder suit over it[2]), but that was also a much cozier situation than EMC. So the shareholders might revolt -- though seeing the Axis-like power of a combined Oracle/EMC, they also might not... [1] http://www.sec.gov/Archives/edgar/data/1341439/000119312511176479/d8k.htm http://www.sec.gov/Archives/edgar/data/1341439/0001193125111... [2] http://www.bloomberg.com/news/articles/2013-10-03/oracle-s-ellison-forgoes-payout-to-settle-pillar-buyout-suit http://www.bloomberg.com/news/articles/2013-10-03/oracle-s-e...
- tw04 11y ago
  While I am happy to defer to someone who I think is a bit more connected through previous relationships to what's happening at Oracle, I will say the one thing I take issue with is the way they phrased the earn-out. It's based on net revenue, not income. This is Larry we're talking about, there's plenty of ways to make the revenue of Pillar look good enough to get paid, even if it's not REALLY making any money. Sell a database, get a "free" Pillar system. But hey, the Pillar system is what you really paid for, we gave you the licensing for free!