Of all the EMC executives who left the company since the Dell acquisition, the departure of David Goulden will have the greatest impact on the Dell EMC storage business.
Dell dropped the news that Goulden will depart at the end of 2017 last Friday in a news release.
Long-time EMC CEO Joe Tucci stepped aside when the $60-billion merger completed a year ago, but Tucci was already headed towards retirement and Michael Dell absorbed the EMC CEO duties. Goulden served as CEO of the EMC division that included its core storage products, and he led the Dell EMC group after the merger. He gave the multi-billion dollar storage business continuity in the transition from EMC to Dell EMC.
Goulden has close ties to Tucci, going back to their days together at Wang Global in the 1990s. Goulden joined EMC in 2002, and held positions in sales, marketing a new business development as well as serving as CFO, president and finally CEO of the Information Infrastructure group. That made him instrumental in the transition period. The big question now is whether that transition period is over.
The move and the timing of Goulden’s departure should not be a big surprise. It’s common for top executives to stick around for a year or so after a big acquisition, and then move on. Goulden was a candidate to replace Tucci as EMC CEO before the Dell deal came about, and he likely will pursue a CEO post at another ccompany.
But what does this mean to the Dell EMC storage business? Goulden was among a group of key EMC executives that Dell kept on to run the enterprise group after the merger. Others included CMO Jeremy Burton, head of IT services Howard Elias and sales chief Bill Scannell. They all remain at Dell but none of them will replace Goulden. Jeff Clarke, who runs Dell’s Client Solutions (PCs) business, will take over the Dell EMC Infrastructure Group. That gives Clarke immense power inside of Dell and also puts the core Dell EMC storage business in the hands of an executive without a great deal of storage experience.
Friday’s press release quoted Michael Dell and Goulden saying the merger is going well and the time is right for a change.
“The transition of EMC into Dell EMC is complete and we’re executing in the market with great momentum,” was part of Goulden’s quote.
But is that the case? On Dell’s quarterly earnings call two weeks ago, Goulden and Dell CFO Tom Sweet talked a lot about how areas of the Dell EMC storage business need improvement. Goulden identified weakness in the midrange storage business and outlined “robust plans” to remedy sales.
Sweet added: “While the integration has gone relatively smoothly in many areas, we recognize that we still have work to do to drive profitability higher and improve velocity in our storage business.”
Dell is by far the overall networked storage revenue leader, according to market research firm IDC. In the 2017 second quarter figures IDC released last week, Dell had $1.5 billion in revenue – more than twice that of second-place NetApp. But Dell’s revenue declined a whopping 22.3% from the previous year while NetApp increased 16.7% and the total market slipped 5.4%. The combined market share of Dell and EMC fell from 34.6% in the second quarter of 2016 to 28.4% a year later.
Goulden blames some of the Dell EMC storage share declines on the change in the quarterly calendar after the transition from EMC to Dell, but it’s hard to attribute all of that 22.3% drop to the calendar. And his comments during the last earnings call shows other problems exist.
The good news for Dell EMC storage is it leads in all-flash market share, and that market grew 37.6% to $1.4 billion last quarter according to IDC. It is also making a strong push to become the leader in hyper-convergence with its VxRail appliances powered by Dell-owned VMware’s vSAN software. But with the latest change at the top of Dell EMC, who knows what the company’s storage portfolio will look like a year from now.