Jan 2, 2019 · 35m · a16z
a16z Podcast | Dell + EMC -- Why the Python Just Ate the Cow
Peter Levine · 13m spoken J.R. Rivers · 8m spoken Ash Ashatosh · 7m spoken Michael Copeland · 3m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
This episode of the a16z Podcast examines Dell's historic acquisition of EMC, analyzing the market forces, strategic motivations, and financial engineering behind the deal. A panel of industry experts explores how enterprise IT transformation, activist shareholder pressure, and complex integration dynamics shape the future of data center architecture.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 2.1 Guest teaching 3.5 Guest disagreement 1.5 The host pushing back 1.1
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 29:41 J.R. Rivers dissents from Peter Levine's garbage truck merger metaphor
J.R. Rivers directly challenges Peter Levine's premise that sales integration will muddle go-to-market efforts, arguing EMC sells high-margin engineered systems that integrate Dell components well.
Hardest push from the host ▶ 19:31 Host Michael Copeland raises the activist shareholder counterargumentHost Michael Copeland challenges Peter Levine's anti-activist narrative by explicitly voicing the activist view that public management teams lack credibility to execute long-term plans.
Biggest teaching moment ▶ 19:41 Peter Levine uses VMware acquisition history to counter host premisePeter Levine educates the host by pointing out EMC's acquisition of VMware was one of the most successful enterprise deals in tech history, proving management's strategic foresight against activist claims.
The host holds their own ▶ 5:41 Host Michael Copeland demonstrates domain knowledge on enterprise salesHost Michael Copeland jumps in to name IBM, Microsoft, and EMC as the preeminent enterprise sales forces, showing deep familiarity with enterprise IT market dynamics.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Primary Catalysts Driving the Dell Acquisition of EMC | 2 | 3 | 1 | 1 | Host Michael Copeland introduces the episode and prompts the guests on what drove Dell's acquisition of EMC. J.R. Rivers explains the market cap mechanics of a $24 billion private company acquiring a $67 billion public company. | |
| Strategic Positioning, Hardware Synergy, and Enterprise Sales Power | 3 | 2 | 0 | 1 | Peter Levine explains Dell's pivot from PC endpoints to enterprise server and storage systems. Host Michael Copeland demonstrates industry familiarity by naming top enterprise sales forces alongside J.R. Rivers. | |
| Redefining Data Center Architectures and Hyperscale Cloud Shift | 2 | 4 | 2 | 1 | Peter Levine outlines the shift toward hyperscale architecture inspired by Google, Amazon, and Facebook. Ash Ashatosh contrasts the cloud anarchists at AWS Re:Invent with legacy CIOs at Gartner Orlando. | |
| Enterprise Hybrid Cloud Realities and VMware's Financial Role | 2 | 4 | 1 | 1 | The panel discusses enterprise hybrid cloud realities, predicting strong enterprise positions for Azure and IBM. J.R. Rivers breaks down VMware's financial role in offsetting Dell's net acquisition cost. | |
| The Python Eats the Cow: Activist Shareholder Constraints | 3 | 5 | 2 | 3 | Peter Levine introduces the python eating the cow analogy and criticizes activist short-termism. Host Copeland pushes back with the activist argument regarding management trust, which Levine refutes using EMC's historic VMware acquisition. | |
| Enterprise Customer Impact and Changing Procurement Paradigms | 2 | 4 | 1 | 1 | Ash Ashatosh and J.R. Rivers discuss customer panic over product roadmap continuity post-merger. The panel highlights how enterprise buyers are pivoting toward open APIs and platform stability. | |
| Potential Pitfalls: Cultural Friction and Go-to-Market Integration | 2 | 3 | 4 | 1 | Peter Levine warns that large tech mergers often resemble two colliding garbage trucks due to muddled go-to-market strategies. J.R. Rivers politely dissents, arguing EMC sales reps sell full engineered systems rather than commodity hardware. | |
| Industry Outlook on Privatization and Final Panel Reflections | 1 | 3 | 1 | 0 | Host Copeland asks about public tech companies considering go-private strategies. Peter Levine concludes that activist shareholder toxicity stifles long-term R&D and innovation. |
Statements from this episode (17)
Copeland: Dell buying EMC is the largest tech deal in history
“We just witnessed the largest tech deal in history when Dell bought EMC.”
Rivers: Public markets would never permit Dell's $67B acquisition of EMC
“When they went private, their market cap was twenty four billion dollars. So tell me in what public market you're going to find a twenty four billion dollar company acquiring a sixty seven billion dollar company. Not going to freaking happen.”
Levine: Dell acquiring EMC creates a complete data center systems vendor
“Dell's business moving from PC to server vendor, now server vendor to systems vendor, Makes a lot of sense. I mean, that logic there does hang together. Servers and storage kind of make up, and networking make up the bulk of make up the bulk of the data center…”
Rivers: EMC has one of the few world-class enterprise sales forces
“Count on your hands how many people have, like, well-vetted, truly, undeniably, world-class enterprise sales forces. There aren't that many, right? And I think you have to say EMC's got one of them.”
Rivers: Cisco relied on EMC's sales force to sell UCS
“When I was at Cisco, I was the VP of systems architecture for UCS, the unified computing system for Cisco, and the number one goal was to get EMC to help sell UCS because we weren't quite sure Cisco sales force could pull it off.”
Levine: Future data centers will mirror hyperscale cloud architectures, not legacy hardware
“A lot of the new data center architectures Are more going to look like Facebook, Google, and Amazon, and less like older, you know, sort of Wall, I call them Wall Street data centers.”
Ashatosh: 2015 Gartner expo floor had virtually no hardware vendors present
“In fact, at the Gartner event, what is fascinating? Was the entire floor. There was not a single hardware vendor except a small booth by EMC, and even small booth by Pure Storage, because I guess they were going public and they had a token show that. There was…”
Ashatosh: Dell will eventually be run by a CFO
“As far as that market is concerned, I think, you know, you will end up having a CFO be the leader of Dell.”
Ashatosh: Azure and IBM will beat AWS in enterprise cloud within two years
“In fact, we predict that the number one enterprise cloud in the next two years is probably going to be Azure, and not AWS, just because they are sucking up a tremendous amount of footprint of applications. And number two actually might be IBM, and not AWS, as …”
Rivers: Dell effectively paid only $20 billion net for EMC
“How much did Dell really pay for EMC? About twenty billion dollars. Because the rest of it, I mean, if they took VMware and spun it out, they'd, you know, they'd make back at least 40.”
Levine: EMC Buying VMware Was One of Tech's Greatest Acquisitions
“EMC arguably did what I think is one of the best enterprise acquisitions probably in the history of computing when they bought VMware.”
Levine: Activist Investors Would Have Blocked EMC From Buying VMware
“Because activists were involved with current EMC, if EMC were now, it was 15 years ago, and EMC were faced with buying VMware, and they had activist pressure on their board, they would not be allowed to buy VMware”
Levine: Dell Bought EMC Because EMC Had Activists and Dell Didn't
“Dell was able to do this deal because they had no active. They were a private company and had no activists. EMC could only do this deal because they had activists”
Levine: Most tech mergers fail due to sales and go-to-market confusion
“Most of these mergers fail because the go-to-market is muddled and the sales organization is, is muddled after the merger, you know, after the merger happens.”
Levine: Dell excels at commodity sales, EMC at high-margin systems
“Dell is amazingly good at selling commodity components and EMC is amazingly good at selling high margin components.”