This EMC is bereft of expansion, it is formerly increasing ... it is ex-growth

Dun-dun-dah ... What about the Dell-EMC merger?

In the earnings call EMC uber-fromage Joe Tucci answered a question about the merger with Dell, saying; "This is a really big deal. And there is a lot of noise in the system. And there are a lot of people with lot of opinions. And a lot of them are not based on a lot of facts. As we are doing this, there's a tremendously increased market volatility, and I think it's really fair to say that this environment has not been kind to any security."

"What gives us strength is that we have a binding solid merger agreement in place. We are highly confident in the contractual terms we have in place, that we will meet those contractual terms. There are significant penalties in place both ways if this doesn't happen. The banks are fully committed. And, again, what does that mean? It means that the banks have told us they can raise the money."

"We're split-rated. There are things we can do to improve that rating that you can speak to Dell about. This gives us confidence. If you look at our progress, if you look at our cash flow, we were right on target. If you look at how we are performing against peers, these are all important metrics. We're performing better than our peers."

"Basically we're going to perform and of course you asked about the timing, we said that as the S4 is filed is when it becomes effective, we'll be more aggressive out there with you. But the timeline for this deal closing is still between May and October. And that will be probably dependent on a couple of foreign anti-trust approvals. So we're confident. We know what we're doing."

Whether there is a plan B if investors continue to rate the VMware tracking stock idea as a crap concept, is unknown.

Outlook

There was none. EMC said that, given the announcement made on October 12, 2015 regarding its entry into a definitive merger agreement with Dell, the company will not be providing outlook for its 2016 financial results.

However, Rakers wrote: "The internal EMC forecast, disclosed in the company's detailed filings related to the Dell transaction (as of July 2015), called for 2016 consolidated revenue at $26.35bn, implying y-o-y growth at 4 per cent; EMC II + Pivotal revenue growth at 2 per cent y-o-y."

This outlook is affected by 2016 product launches, which Rakers noted:

• Launch of DSSD in 1Q16 – PCIe-based all-Flash offering; focus on positioning relative to XtremIO, Pure Storage, NetApp / SolidFire, and others in the all-flash market.
• All-flash VMAX, which will feature a complete re-architected solution (firmware, software, hardware) and will be based on 3D NAND.
• All-flash VNX (2Q16).
• A new hyper-converged offering from VMware, VCE and EMC in 1Q16.

He said EMC noted an expectation of converged infrastructure solutions accounting for 20 per cent of all storage deployed in 2016 (vs. 16-17 per cent in 2015). ®