Geoff - LOL!!!! No, there are better ways to expand your product line than by purchasing a fossilized legacy vendor...
I would assume that DELL would broaden its product line in a way compatible with its culture, business model and ROIC goals. Strategic purchases to fill in its current strategies (SAN offerings for example) might include a couple of key components to pull the pieces together, or perhaps a more volume oriented solution with less technology investment (say NTAP) which would complement their current server market.
They could probably have bought Clariion at a reasonable price - it was obviously on the block based on the EMC deal. Personally, I think that would have been running before they walk, and I am not suggesting that would have been a good move, but it would have protected DELL's entry into that space.
There is a well-known maxim in the business which says you can't buy market share by buying your competitors. If you believe press at the time, CPQ's purchase of DEC was primarily to get the service business. Unfortunately they had to try and eat the whole magilla... Taking a company of less than 20,000 people, with a culture and model which generated more than $1M revenue per employee, and throwing in more than 70,000 people from a company which generated about $200,000 revenue per employee was sure to create huge culture clash, and given that the CPQ people were outnumbered by more than 3 to 1, the merger was a recipe for disaster which has played out pretty much as the worst case.
I am not suggesting that DELL do anything like that - only that they go above their current 2% R&D model and make some technology investments to broaden their product line. I'm probably not smart enough to say what those moves should be. |
