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Nintendo Keeps Drop Year Over Year

February 4, 2016 by Michael  
Filed under Gaming

Nintendo’s finances took a dip in the company’s third quarter report for FY 2015 – sales stayed relatively stable with just 3.9 per cent shrinkage to 427.7 billion Yen ($3.5bn), but profits dropped by 32 per cent year-on-year to 40.5 billion Yen ($336m).

Although the bottom line failed to excite, plenty of familiar faces performed well for the publisher’s software arm, as well as a few new names. Top seller was Child friendly Wii U shooter Splatoon, shifting over four million units. Super Mario maker wasn’t far behind on 3.34 million, whilst Animal Crossing Happy Home Designer reached 2.93 million. Collectively the 3DS family sold 5.88 million units of hardware and 38.87 million games. The Wii U totalled 3.06 million consoles and 22.62 million pieces of software. 20.50 million Amiibo figures were sold, and approximately 21.50 million Amiibo cards.

Those eagerly awaiting news of either the new NX system or the company’s first smartphone game will be disappointed – neither was mentioned in the company’s forward looking statements. Instead, the publisher focused on relatively known quantities.

“For Nintendo 3DS, we will globally release a special edition hardware pre-installed with Pokémon title(s) from the original Pokémon series on February 27 which marks the 20th year since the original Pokémon series release,2 read the accompanying statement.

“Furthermore, Mario & Sonic at the Rio 2016 Olympic Games and key titles from third-party publishers are scheduled for release. For Wii U, we will strive to maintain the attention level of Splatoon and Super Mario Maker, which are continuing to show steady sales, while introducing new titles such as The Legend of Zelda: Twilight Princess HD. Meanwhile, for Amiibo, we will continue to expand the product lineup in order to maintain momentum. At the same time, we will aim to further expand sales by offering new gaming experiences with the use of Amiibo. In addition, the first application for smart devices, Miitomo, is scheduled for release.”

The company has maintained its full year target of 35 billion Yen in profit.

Courtesy-GI.biz

 

Yahoo To Slash 15% Of Workforce

February 3, 2016 by mphillips  
Filed under Around The Net

Yahoo Inc Chief Executive Marissa Mayer announced cost-cutting measures that include slashing 15 percent of the company’s workforce, or roughly 1,600 jobs, and closing several business units, according to a report by the Wall Street Journal.

The plans were announced after Yahoo’s fourth-quarter results on Tuesday, the Journal reported, citing people familiar with the matter.  It did not specify which business units might be closed.

A Yahoo spokeswoman said the company could not comment during its quiet period before releasing earnings.

Activist investors have pressed Yahoo to sell its core business rather than spin it off, even though a sale would likely incur more taxes.

It is unclear whether the plan Mayer is expected to announce would satisfy their demands, but cutting costs could make Yahoo more attractive to buyers.

Verizon has said it is interested in acquiring Yahoo if it were up for sale. Other potential buyers would include media and private equity firms, analysts said.

Yahoo had about 11,000 employees as of June 30, according to its website, down from a Dec. 31, 2014 total of about 12,500 full-time employees and what it called fixed term contractors.

Separately, a former Yahoo employee filed a lawsuit against the company Monday challenging its “quarterly performance review” process, on grounds it assigned numerical ratings to workers that in some cases were used to fire those at the bottom of the scale.

The lawsuit, filed in federal court in San Jose, California, said the plaintiff was terminated in 2014, despite being previously praised, as a result of the QPR process.

The filing said Yahoo’s use of the QPR process to terminate large numbers of employees violates federal and California laws that require employers to disclose mass layoffs above a certain threshold.

 

 

News Corp Says Rumors Of Twitter Purchase Are False

January 22, 2016 by mphillips  
Filed under Around The Net

Rupert Murdoch’s News Corp said rumors about the company potentially purchasing microblogging site Twitter Inc or building a stake in it were untrue.

The stock rose from a record low after unconfirmed chatter about News Corp’s interest in Twitter circulated on Wednesday. The rumors intensified after a CNBC segment, tech website Re/code said.

The social media site was evaluated as a takeover target because of the company’s shrinking stock price, Re/code said.

In the few months since co-founder Jack Dorsey returned as the chief executive, Twitter has been trying to make the site more engaging. The company said in December it was testing a feature to show ads to people who read tweets without logging in as it tries to monetize non-active users.

“Twitter inside a larger organization definitely makes theoretical sense, whether its another internet company or a media company,” Monness, Crespi, Hardt, & Co Inc analyst James Cakmak said.

A News Corp spokesman said there was no truth to the rumors.

Twitter already has several high-profile investors. Former Microsoft Corp CEO Steve Ballmer reported a 4 percent stake in October, making him the third-biggest shareholder after Twitter co-founder Evan Williams and Saudi billionaire Prince Alwaleed bin Talal.

Twitter has been the subject of takeover rumors in the past, including a fake report attributed to Bloomberg that claimed the company had received an offer to be acquired for $31 billion.

Twitter had received bids from Alphabet Inc’s Google and Facebook Inc, according to reports.

 

 

Xiaomi Misses Smartphone Shipment Goals

January 18, 2016 by mphillips  
Filed under Mobile

Xiaomi announced Friday it shipped over 70 million smartphones in 2015, short of an ambitious target it had announced last year, amid growing competition and high dependence on the Chinese market.

The Chinese company had forecast last year that it would sell at least 80 million phones during the year. It had sold 34.7 million handsets during the first half of the year.

Growth in smartphone sales is slowing down in China because of saturation of the market, said Anshul Gupta, research director at Gartner. Xiaomi is also facing stiff competition from other players who have copied the company’s strategy based on online sales, content and exclusive apps, he added.

Research firm Canalys said in October that Huawei had overtaken Xiaomi as China’s top smart phone vendor in the third quarter of last year. Xiaomi fell to second place after its shipments shrank year on year. Xiaomi is under tremendous pressure to keep growing as an international player as it slows down in its key home market, the research firm added.

About 90 percent of Xiaomi’s sales have come from China, said Neil Shah, research director at Counterpoint Research. The company, which had acquired a star status because of its meteoric growth and aggressive publicity campaigns, has tried to reduce its dependence on the Chinese market, selling in other markets such as India, Indonesia and the Philippines.

But other than in China and India, its performance in markets it has entered has been lackluster, Shah said. Even in India, it is not among the top five as it faces competition from established local and foreign brands who have been quick to match Xiaomi’s online sales strategy, he added.

Xiaomi offers an app ecosystem, which has proven to be attractive in China where the Google Play store is banned, but this has not helped the company in India and other markets where Google Play is available, Shah said.

 

 

 

Qualcomm Decides To Remain Whole, Nixes Split Idea

December 17, 2015 by mphillips  
Filed under Around The Net

Qualcomm Inc has changed its mind about splitting into separate chipmaking and technology licensing businesses, concluding a six-month strategic review instigated by hedge fund Jana Partners.

San Diego-based Qualcomm, the biggest maker of chips used in mobile phones, said its current structure offered unique strategic benefits that cannot be replicated.

Qualcomm, whose earnings have slumped by more than 40 percent in each of the last three quarters, said it had “a focused plan” in place that it believed would drive growth. Chief Executive Steve Mollenkopf did not elaborate.

The company has also said all along that its existing structure allowed it to leverage relationships with Chinese customers, which are expanding quickly into other countries.

Jana, which owned about 28.6 million Qualcomm shares as of Sept. 30, is comfortable with Qualcomm’s decision and supportive of the board’s efforts, people familiar with the matter said.

Qualcomm said business in the current quarter was stronger than expected as 3G and 4G device shipments were helping its licensing business and cost cuts were taking hold.

The chipmaker said it now expected earnings per share for the quarter to be at or modestly above the high end of its forecast range. The company had forecast earnings of 80-90 cents per share for the quarter.

The technology licensing business has driven Qualcomm’s profits for years, thanks to the royalties it collects on the chip-technology developed by its chipmaking unit.

“I think it’s better that they didn’t split. I’m happy about that,” Tigress Financial Partners analyst Ivan Feinseth said.

Qualcomm can continue to outsource hardware manufacturing without having to go through a split, he said.

 

 

Yahoo Decides To Keep Alibaba Stake

December 11, 2015 by mphillips  
Filed under Around The Net

Yahoo Inc squahsed plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd, under pressure from activist investors worried about billions of dollars in taxes, and said instead it is looking at creating a separate company to hold the rest of its assets.

The decision, following three days of board deliberations last week, is an explicit rejection of Chief Executive Marissa Mayer’s plan to spin off the Alibaba stake and may cloud her focus on reviving Yahoo’s core business of selling ads on its popular news and sports websites.

Investors were unenthusiastic as they digested the complexity of the “reverse spin-off.” Shares of Yahoo the were lower for most of the trading session.

“You’ve got a sinking ship right now,” said Jeffrey Carbone, senior partner with Cornerstone Financial Partners in Cornelius, North Carolina, a former Yahoo shareholder. “Yahoo is just a company in trouble.”

The company, overtaken by Google, Facebook and others since pioneering the commercial web in the 1990s, said it had no plans to sell its core business, as some investors had hoped, but the move effectively invites offers for the new entity.

“There is no determination by the board to sell the company or any part of it,” Yahoo Chairman Maynard Webb said on a call with investors. “We believe that the business remains very undervalued, and we are focused on realizing and unlocking that value.”

The new publicly traded company will house Yahoo’s Internet business and its 35 percent stake in Yahoo Japan, worth about $8.5 billion at current exchange rates.

Its Alibaba stake, worth more than $30 billion, accounts for the bulk of Yahoo’s current market value of $32 billion.

 

 

Can Nintendo Ship 12 Million NX’s In 2016?

December 4, 2015 by Michael  
Filed under Gaming

The Nintendo NX may surpass the Wii U’s lifetime installed base in its first year on shelves. According to a Digi-Times report, Nintendo’s upstream component suppliers are expecting to provide the company with enough hardware to ship 10-12 million units in 2016.

That would mark a rebound after the Wii U, which through September had put up lifetime sales of a little under 11 million. However, Nintendo may be expecting even more from its next platform; in July, Digi-Times reported that the company was planning to ship 20 million Nintendo NX systems globally in 2016.

The report states that Foxconn Electronics will manufacture the NX, with mass production beginning at the end of the first quarter. Foxconn Technology, Macronix, Pixart Imaging, Coxon Precise Industrial, Nishoku Technology, Delta Technology, Lingsen Precision Industries and Jentech are expected to be supplying components for the NX.

Courtesy-GI.biz

 

Is Yahoo’s Internet Business Up For Sale?

December 3, 2015 by mphillips  
Filed under Around The Net

Yahoo’s board may be mulling over the sale of its core Internet business, after an activist investor demanded last month that the company explore the sale of its core search and display advertising businesses.

The board will be meeting this week to discuss the sale in a series of meetings from Wednesday through Friday, The Wall Street Journal reported, citing people familiar with the matter.

Yahoo had previously planned to spin off its shares in Alibaba Holding Group, through a company called Aabaco Holdings, but has held back on the move because of uncertainties about potential tax implications.

In a letter last month to Maynard J. Webb, chairman of Yahoo’s board, and its CEO Marissa Mayer, investor Starboard Value’s Managing Member Jeffrey C. Smith wrote that the proposed spin off of Aabaco was not Yahoo’s best alternative, and the company should instead be exploring a sale of Yahoo’s core business of search and display advertising, while leaving Yahoo’s ownership stakes in Alibaba and Yahoo Japan in the existing corporate entity.

Smith threatened that his firm “will look to make significant changes to the Board if you continue to make decisions that destroy shareholder value.”

Yahoo’s core business has not been very strong, despite a turnaround effort by Mayer, including a search advertising agreement with rival Google announced in October. Its revenue grew 6.8 percent in the third quarter to US$1.2 billion, while profit dropped to US$76 million. The company also had some key staff leaving.

A separation of Yahoo’s Alibaba Group and Yahoo Japan stakes from the core business would unlock immediate value for shareholders and allow Yahoo’s core business to better recruit and retain talent, according to Starboard Value.

 

 

Will Dell Sell Parts Of EMC Post Merger?

November 20, 2015 by Michael  
Filed under Computing

Michael Dell has confirmed that the has no intention to asset strip EMC and flog off small bits of it.

Reuters had reported that the company could sell off $10bn of assets to reduce the $49.5bn of debt it will be taking on to fund the acquisition.

Logically this would mean Perot Systems, Dell’s own service arm, acquired for $3.9bn in 2009, Quest, which it bought for $2.7bn in 2012; and SonicWall, which it reportedly acquired in 2012 for $1.2bn would be logical sales. Dell’s Equalogic service must also be in doubt given that it overlaps with EMC’s SAN portfolio.

However Dell appeared to deny this.

When asked if he would sell off EMC assets where there was found to be comparable Dell products, Dell said:

“The portfolios of products are highly complementary. There are some overlaps in storage, but Dell product lines and EMC storage product lines are somewhat different. We are going from seven to nine [product lines], which is not a problem, and we’ll continue to enhance them.”

Of course he was not talking about VMware. Dell confirmed that the company has no plans to tie in VMware with Dell.

“We believe in choice and openness. VMware will remain an independent public company. We are not going to disadvantage VMware partners in respect to their relationship with VMware,” he said.

Courtesy-Fud

 

Nintendo Pushes Smartphone Videogame Launch Into 2016

October 30, 2015 by mphillips  
Filed under Mobile

Japan’s Nintendo Co announced that it is delaying the much-awaited launch of its videogame service for smartphones by a few months to March 2016, disappointing gaming fans as well as investors who drove its shares down by more than 10 percent.

Under a strategy announced by its previous chief executive, who died of cancer earlier this year, Nintendo had said it would introduce its first smartphone games by the end of 2015. Fans and investors had hoped it would include its best-selling videogame franchise Mario in the first lineup.

Chief Executive Tatsumi Kimishima, a former banker who succeeded Satoru Iwata, said the delay would help Nintendo concentrate on selling its existing consoles and game software during the year-end holiday season.

“The year-end is traditionally our peak season for sales,” told a packed news conference, when asked about the delay. “This way, we’d be able to introduce our new applications after the holiday season is over.”

He avoided commenting on whether Mario would come to smartphones, instead introducing a new social networking service-style application called “Miitomo” which would be available in March.

The news knocked Nintendo’s shares down more than 10 percent in morning trade, erasing earlier gains. DeNA Co, Nintendo’s mobile gaming partner, fell as much as 19 percent.

Kimishima must avoid cannibalizing traditional console sales at the same time as pushing aggressively into the rapidly growing mobile gaming segment. On Wednesday, Nintendo reported a weaker-than-expected operating profit for the July-September quarter on tepid sales of game software.

“This (move into mobile gaming) is a sea change for them and there may be some growing pains like this along the way,” said Gavin Parry, managing director of Hong Kong-based brokerage Parry International Trade.

Former CEO Iwata, credited with broadening the appeal of videogames, died of cancer in July just months after deciding to enter mobile gaming despite years of resisting investor calls for such a move.

 

 

 

Is Oracle and Intel Going After IBM In The Server Space?

October 28, 2015 by Michael  
Filed under Computing

Oracle and Intel have teamed up to fight IBM in the server space, trying to convince Power System users to instead run their Oracle Database on Oracle Engineered Systems, powered by Intel Xeons.

The dastardly scheme, dubbed Exa Your Power, was unveiled at the Oracle Openworld conference in San Francisco, where Intel CEO Brian Krzanich and Oracle CEO Mark Hurd took to the stage for a bit of mutual back-slapping.

Hurd said thousands of computers are currently running Oracle technology on IBM systems, which are “large and costly. We think you can do better than this.” He added that switching to an Oracle-Intel architecture would offer up to 15 times the current performance offered by IBM.

Intel and Oracle will carry out a free proof-of-concept migration model to test customers’ database and application performance, and show firms how much better their Oracle database workloads would perform if they migrated away from IBM Power Systems onto an Intel-Oracle stack.

IT services provider CSC said it recently migrated an Oracle Database for a major insurance provider from IBM Power 7 to an Exadata X5 engineered system as a proof of concept, and found that the insurer’s Siebel application ran up to 10 times faster and its ETL processes ran up to 12 times faster on Exadata.

The anti-IBM stance is an interesting way to kick off this year’s OpenWorld show considering that IBM is a major sponsor of the show.

“IBM is proud to be a Grande sponsor at Oracle OpenWorld and will have a significant presence at this year’s event. Join us for a great lineup of activities and learn how IBM and Oracle can help you get more value out of your Oracle investments,” IBM gushed ahead of the event. #awkward.

Long-term partners Oracle and Intel have also teamed up to improve the performance of cloud systems via a new joint initiative dubbed Project Apollo.

Krzanich said Apollo is a “scaled version of Oracle’s cloud datacentre that can be used as the foundation for hardware and software optimisation, specifically to enhance your Oracle Cloud experience”.

Intel senior VP Doug Fisher and president of Oracle Product Development
Thomas Kurian spearheaded the project. Fisher explained that the firms decided to get a team together in a lab with the aim of reducing the complexity and improving the performance of cloud-based environments.

“We gave them state of the art software from Oracle and state of the art platforms with Intel architecture, which has a Xeon super SKU in it, allowing them to optimise with the latest and greatest technology.”

Fisher said that the lab team, consisting of Intel and Oracle engineers, spun up 1,500 VMMs, and started tuning the workload, managing to improve performance by 50 percent and reduce the variance of how long it takes to complete the workload by 10 times down to three percent. The aim of these efforts is to let customers deliver SLAs with higher levels of predictability.

Intel and Oracle will also produce and share blueprints of all the learning from the labs team to customers, so they can take the architecture configurations and deploy these in their own environment.

Courtesy-TheInq

 

Mobile Trading Apps Continue To Gain In Popularity

October 21, 2015 by mphillips  
Filed under Mobile

Once the dominion of big international banks, smartphones are putting the power to deal currencies into the hands of a new cohort of traders, who can make a deals in just about any location.

Retail foreign exchange trading has grown rapidly in recent years, but the image has been of a lone trader in front of a computer screen. Smartphones, owned by around half the world’s adults, are changing that.

Mobile trading makes up about 60 percent of transactions, up from 10 percent four years ago, at London-based broker Trade 212, whose app has been downloaded over a million times. More than a fifth of clients trade only on smartphones or tablets.

“We are seeing a big number of clients who are not only mobile first, but mobile only,” said Ivan Ashminov, Trade 212′s co-founder.

Like others, Trade 212 offers demo accounts allowing users, largely male and mostly aged between 25 and 45, to practise with fake money. Many have no previous trading experience, Ashminov said.

Faheem Bismal, a 32-year-old father of two from Glasgow, sold his chain of convenience stores and restaurants two years ago to focus on property investment and trading currencies. He trades on broker FXCM’s smartphone app on the school run and in bed before he turns out the light.

When he only traded on his desktop and could not check the market when he was out and about, he was less successful, Bismal said. But he warns that the ease and accessibility of trading apps can be dangerous.

“I see guys sitting on their phones just tapping away, being in and out of the market within seconds or minutes … and losing all their money. If you’re going to use the app you have to use it very sensibly.”

In 2013, the Bank for International Settlements estimated the value of retail currency trading at about $185 billion a day, or 3.5 percent of the market. Industry analysis website Finance Magnates reckons that figure is now closer to $320 billion. Smartphones, it seems, are helping drive growth.

Almost 40 percent of trading at IG, one of the world’s biggest retail FX platforms, is done on mobile devices, up from around 20 percent three years ago. In April, the firm became the first to offer a trading app on the Apple Watch, which vibrates when a user-set price is reached.

 

 

Is The Party Over For Silicon Valley Tech IPOs?

October 19, 2015 by mphillips  
Filed under Around The Net

In 2014 many tech IPOs enjoyed stratospheric valuations in their Wall Street debut, raining cash on the companies and their investors and boosting concerns about another Silicon Valley bubble.

Now, the party seems to be ending, according to data analyzed by Reuters: Five of the 12 U.S.-based tech companies that went public this year, or 42 percent, priced their shares at a valuation below or nearly the same as their private market value, compared to 24 percent of the 29 that went public in 2014.

“People are no longer out of their minds with valuations and expectations,” said Adam Marcus, managing partner at OpenView Venture Partners in Boston.

A recent example is Pure Storage , whose IPO earlier this month gave the data storage company a $3.1 billion market cap that almost matched its valuation in the private market.

The shift in the investing climate comes as payments company Square filed this week for its own IPO later this year, becoming one of the most prominent of the so-called “unicorns,” or private companies valued at more than $1 billion, to try to go public.

Even when valuations increase, they are growing by a smaller amount, according to the data, which was provided by Ipreo, a market intelligence company, and Pitchbook, a venture capital, private equity and M&A data provider, and analyzed by Reuters. Among the companies that saw their values grow in an IPO in 2014, the median increase from their value in the private market was 61 percent. Some companies saw increases of three-, four- and even five-fold.

So far this year, that gain is 32 percent. The data excludes eight companies that went public in 2014 because there was insufficient information to calculate their pre-IPO valuations.

The shrinking difference affects every corner of the pre-IPO market, compelling some companies to delay or withdraw their public-offering plans, bankers and industry analysts said.

And some late-stage investors – while they will still get paid – may see smaller returns than they gambled on. Those who invested in rounds with an eye on a 30 or 40 percent return will more likely get a return similar to the S&P 500 over the past year – about 8 percent, sources said.

According to interviews with bankers, venture capitalists and late-stage investors, this shift in the venture investing climate is just getting underway and likely to accelerate.

It is also an about-face from the last few years, when hot tech companies found no shortage of investors for their private financing and experienced massive valuations, and then demanded an even higher market cap in an IPO.

But now the public market is less willing to play along, venture capitalists said.

To be sure, some delays in going public can be attributed to the surge in funding from late stage investors, allowing tech startups to stay private longer.

As their valuations grew in the private market, a big increase in the value of their shares in an IPO became harder to achieve.

A valuation drop in an IPO doesn’t necessarily dim the long-term prospects of a company. Hortonworks’ stock is up more than 34 percent from the IPO price, for instance, after its valuation took a 40 percent cut in its public offering last year.

But lower valuations in the public market raise questions about the future of the nearly 150 companies that have filed confidential IPOs, according to estimates by some investors.

There is not enough market demand, they say, to support so many deals. In a confidential IPO, reserved for companies with less than $1 billion in revenue, companies file a draft registration with the Securities and Exchange Commission that is for non-public review.

 

 

 

Steve Ballmer Believes In Twitter

October 19, 2015 by mphillips  
Filed under Around The Net

Ex Microsoft Corp  Chief Executive Steve Ballmer has purchased a 4 percent stake in Twitter Inc, according to his spokesman, making him the third-biggest individual shareholder in the social media company.

Ballmer’s stake is worth more than $800 million based on Twitter’s $21 billion market value. Only co-founder Evan Williams and Saudi billionaire Prince Alwaleed bin Talal have greater stakes among individual investors.

Friday Ballmer tweeted from a non-verified account that he built up his stake over the past several months.

His tweet lauded Twitter’s new ‘Moments’ feature, which curates the best tweets of the day, and Dorsey’s appointment as permanent CEO last week.

“Good job @twitter, @twittermoments innovation, @jack Ceo, leaner, more focused,” the tweet said. “Glad I bought 4% past few months.”

Twitter declined to comment. Ballmer himself did not return requests for comment.

Ballmer, who bought the Los Angeles Clippers basketball team after retiring as Microsoft CEO in February 2014, has a personal fortune of about $21.5 billion, making him the 35th richest person in the world, according to Forbes magazine.

Ballmer now owns more of Twitter than co-founder and CEO Dorsey, who has a 3.2 percent stake, according to Thomson Reuters data. Williams is the largest individual shareholder with about 7.5 percent, followed by Alwaleed with about 5.2 percent.

Like @alwaleedbinT move too,” Ballmer’s tweet said. Alwaleed and his investment firm, Kingdom Holding Co 4280.SE, said earlier this month they had raised their stake in Twitter to more than 5 percent.

Ballmer’s investment is a sign that Twitter’s efforts to revive growth under Dorsey is being appreciated, Monness, Crespi, Hardt, & Co Inc analyst James Cakmak said.

“I think it’s just another point of evidence that the step that they are taking to redirect the business toward growth is resonating,” Cakmak said.

Twitter has made several new announcements since Dorsey, who also served as CEO in 2008, returned on a permanent basis last week. On Tuesday, Twitter said it will lay off about 8 percent of its workforce and on Wednesday, it hired Google Inc executive Omid Kordestani as executive chairman.

FBN Securities analyst Shebly Seyrafi said Ballmer’s stake could be indicative of widespread confidence in Dorsey and his strategy.

 

 

 

 

HP CEO Slams The Dell/EMC Merger Plans

October 15, 2015 by Michael  
Filed under Computing

HP CEO Meg Whitman has criticized Dell’s acquisition of EMC, saying that the firms will be overridden by debt and that the deal will be disruptive to customers.

Dell announced the purchase of EMC on Monday, which at $67bn is the largest technology merger of all time, topping Avago Technologies’ $37bn offer for Raspberry Pi chipmaker Broadcom in May.

Whitman welcomed the news of the buyout, and said in an open memo to employees that the deal shows HP as ‘two years ahead’ of its competitors.

I wanted to take a quick moment to tell you why I (and you should too) believe this is a good thing for Hewlett Packard Enterprise and an opportunity for us to seize the moment,” Whitman said.

“This is validation for the strategy that we have laid out and I am not surprised that others would try to emulate it. But, the reality is that we are two years ahead of the game and it will be difficult for others to catch up.”

Whitman’s first point of attack is the amount of debt that the deal incurs, noting that to pay back the combined $50bn of debt, Dell will need to cough up roughly $2.5bn a year in interest, “which will keep them from better serving their customers”.

Her next argument is that, given the size and scope of the merger, it will serve as an “enormous distraction” to employees at the two firms.

“This will be a massive undertaking and an enormous distraction for employees and their management team as two very different cultures come together, leadership teams shift and an entirely new strategy is developed,” Whitman said.

That isn’t all that puts HP ahead of its competitors, according to Whitman, who also claimed that the deal will create confusion among customers who “simply will not know if the products they are buying today from either company will be supported in 18 months”.

Steering clear of mentioning HP’s own Autonomy acquisition, which didn’t quite go to plan, Whitman concluded: “All of this at the very moment when we have completed our journey to create two new, focused companies.

“We’re organised, we have a strong balance sheet and our innovation engine is humming. So get out in front of your customers and your partners. Tell them our story. Take advantage of this moment.”

Dell, unsurprisingly, had a more positive attitude about its record-breaking buyout of EMC, saying that the deal will transform it into an enterprise behemoth with a focus on next-generation IT, including hybrid cloud and converged infrastructure.

“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.

“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 centres, converged infrastructure, hybrid cloud, mobile and security.”

Courtesy-TheInq