Global Perspectives on Innovation and Creativity - Essay Example

Whether EMC Corporation should integrate with its newly acquired firm VMware EMC is an American Transnational corporation which has its center of operations in Hopkinton, Massachusetts. EMC bids information security, data storage, analytics, virtualization, cloud computing and other services and products that enable businesses to store, manage, protect as well as analyze data(Blankenhorn 2013).EMC aim markets include great companies as well as medium-sized and small businesses across vertical markets. Its competitors include firms like Hitachi Data Systems, IBM, NetApp, Hewlett-Packard. The stock was added to the New York stock exchange in 1986 and listed on the S&P 500 index (Blankenhorn 2013). EMC as a corporation is at the forefront has ensured that businesses provide competitive cutting-edge IT services (Blankenhorn 2013). Through its transformation in cloud computing, EMC has achieved tremendous success in the way it handles information in its IT departments in a simple, secure and the most effective cost-efficient way (Blankenhorn 2013). VMware Inc. is an American software company that provides virtualization and cloud software and services and in fact, it was the first that fruitfully virtualized x86 architecture. The company is based in Palo Alto, California (Butler 2014). In 2004, it became a subordinate of EMC Corporation of which EMC sold15% of the company in a stock exchange in New York IPO and it operates under the icon VMW (Butler 2014). Customers are now dependent on VMware to help them solve their daily Information Technology needs(Butler 2014). In 2012 alone, VMware revenues amounted to $ 4.61 billion with over half a million customers and more than 55,000 associates in addition to its many offices all over the world apart from its headquarters in Silicon Valley(Butler 2014). The advantages and disadvantages of acquisition The contribution from both sides is meant to reinforce a large group of consumer by providing a software designed for storage in Virtual Desktop Infrastructure (VDI) and an easy way of recovering lost data (Jewell 2007). Geared towards optimization of consumer use, VMware Virtual SAN infrastructure will feature management based on storage and minimized and inexpensive server-side storage TCO (Jewell 2007) The geographical distribution of the incorporation facilities lab will ensure that product development of the VMware and EMC, also feature third party technology that is compatible with its products (Jewell 2007). EMC being the dependable base of information for VMware ensures that clients take advantage of the software’s capabilities by ensuring that they meet the customer demand via its computing and virtual technologies into the future of cloud infrastructures with the evolving computing technology (Mass 2013). The alliance between EMC and VMware base on VMware Virtual SAN is a promising solutions provider for organizations with fewer employees and smaller with limited resources (Jewell 2007). Its significant enabled accessibility will offer a low cost of data storage in addition to the enabling user friendly user interface (Johnson 2011). The significant improvement will tremendously save time for IT experts in diagnosis of storage related errors allowing them to focus on other tasks (Johnson 2011). The joint venture between EMC and VMware is geared towards provision of the latest system of integrated storage media to cut-down on the cost and intricacy of the operations of VMware for SMBs and SMEs (Johnson 2011). The best integrated submission on the variations of VMware Virtual SAN together with the leading EMC’s storage solutions will open up a much larger consumer market for the two companies (Johnson 2011). This partnership is aimed at ensuring that clients pick up VMware Virtual SAN™ and set up simple storage mechanisms that flexible and efficient (Johnson 2011). From this collaboration, customers and associates will become skilled at how to make over storage by exposure to larger amounts of data through experience and the most suitable options available that suits the evolving IT needs (Johnson 2011). The groundbreaking EMC’s innovations in terms of products and services will see a more a flexible customer, equipped with the necessary knowledge in accessing, handling and presenting data (Miniman 2013). The collaborating venture will see clients get the most reliable customer care representatives to offering help on cloud and virtualization expertise and more solutions EMC has to offer (Johnson 2011). EMC Corporation has emerged as such a company (Johnson 2011). That is for the reason that in addition to its own year-long performance run, the storage technology giant has scored with the spinoff of VMware Inc., a producer of virtualization technology that has turned out to be one of the most up-to-date stocks to hit the market so far this and the recent years (Johnson 2011). VMware has been on a tear, with its stock up more than 190% from the time when the preliminary open offering on Aug. 14. A lot of people on Wall Street are recommending that investors purchase EMC shares as a way to get the most out of VMware (Crum 2008). Since then, the shares have gone up another 45% to trade in the region of the $85 mark by the closing stages of September. The gains have given the young company one of the highest market caps in the software sector -- second only to sector giants Microsoft and Oracle (Jewell 2007). However, the spiky gains have caused some analysts to be anxious about VMware's valuation. Quite a lot of them have issued reports recommending that EMC is a well again way to buy a part of a set of VMware's business at a more levelheaded price. EMC spun off just a segment of VMware in the IPO and still owns 86% of the company (Crum 2007). In 2004, when EMC made a final decision and move forward in purchasing VMware for $365 million, three years afterwards, it sold out 20% of VMware shares to the public (Johnson 2011). Mellor (2014) explains that EMC’s ownership of VMware has opened up much of its larger market to as high as $51 billion. The Booz & Company research views the amount of this success not as a result of diversification (Jewell 2007). While assessing such like companies, the firm brings concurs that the companies will always be winners (Johnson 2011). Viewing on commerce, acquisitions that are potential to the present business are from 38% to three times likely to be successful than acquisitions from diversifications (Crum 2007). Acquiring businesses comes with greater risks to medium sized companies for it involves a lot of questions to be asked by its CEO whether they have what it takes to venture into a business they have limited knowledge about (Mellor 2004). Most acquirers like EMC always hope that VMware management team remains is held in place while on the other hand the menace of defection is far above the ground; especially if the great deals of acquaintance on formulating on how the business works lies within its owner or CEO (Jewell 2007). Losing the acquisition team can be a have drastic consequences given the fact that client needs are ignored and vital people will also run away because their bosses have left (Krugge 2013). This will force the acquirer to try everything within its reach to regardless if its effectiveness even if it includes hiring tech-savvy consultants who may be costly (Jewell 2007). They will have to hire a new for the acquired business and staff which is going to involve a whole investment in sums of money in terms of hiring consulting firms and recruiting fees and a waste of time in handling indecisiveness in the company (Krugge 2013). The new chief to be recruited to head the acquired business would have to be allowed to make his/her independent staff hiring as he/she sees suitable and in line with the needs of the business taking a further integration period of more than 6-12 months depending on the size of the business (Krugge 2013). Should the EMC forgo the acquisition of VMware? It should not, as such an acquisition is necessary in ensuring that a company having a decline in the market is back to relevancy (Krugge 2013). The following steps explain how EMC can minimize the risks of acquisition. How well do we recognize most of their competitors? This should be looked at cautiously for concealed prime competitors unlike other technology and business procedures (Yapp 2014). What kind of weaknesses do our competitors have and which one are those we should pay attention to? (Mateo 2004). Another major problem would be how to deal with customers who have been merged another product that has been renovated as a result of the two companies coming together. The questions they should ask and find a solution to is how the products are related and whether they target a similar niche (Krugge 2013). It would be a wise idea if the consumers of the independent products of the two companies before the merge find both products related and depended on each other and therefore the need to effectively solve client needs (Krugge 2013). Are we aware of the complexities of management of VMware’s’ geographical distribution will put as into? (Mass 2013). Another issue will be the preparedness of both companies for new development and different levels of doing business. Before the merge, employees that were involved in making important company decisions may find themselves not being involved where they think they ought to have been (Krugge 2013). Employees from VMware were not used to the business environment they were subjected to at EMC (Krugge 2013). It must have taken a while for VMware representatives a lot to get used to the pressure, speed and conditions taken by MCE’s decision makers (Krugge 2013). Diversification plans should be underway and in plan before any attempts of acquisition are made as it calls for greater preservation packages (Mateo 2004). Reduce or delay aggressive characteristics of the integration. This is purposed to retain the seller’s team for a while, it would be better to put off any features of integration that would yield weak results (Mateo 2004). Make financial arrangements to monitor the progress to counter for the lack of knowledge in a company to be acquired is risky (Mateo 2004). It is important for the management to get to know the staff of the company they plan to acquire personally, share know their visions for the future and get to know how trustworthy they are (Mateo 2004). This way they two companies get to share ideas and new innovative ways the merge will help the two companies involved (Mateo 2004).There is need for supplementary knowledge of the river guide (MacLaughlin 2014). A good example of this project of acquisition is the one around the years 2008 and 2012 in which Rambus, the $300 million worth technology development firm has been diversifying its business techniques by merging together security and lighting (Mateo 2004). The firm has made closer to 20 business acquisitions within its past four years, among which five are operating business (Mateo 2004). The success can be attributed to their timely knowledge of the importance of business alignment with the seller’s team in integrating two businesses (Mateo 2004). In the present day, Rambus liaises with the seller’s management task force before finalizing any acquisition deal and implement for approval by the board from the first day (Crum 2007). Reduce or delay the aggressive characteristics of the integration. This is purposed to retain the seller’s team as this would lower the costs involved for instance, it would give a clear picture an integration that would definitely yield poor results in the long run (Mateo 2004). It It is very important that financial arrangements are made in advance. This includes purchase of financial plan guides that would help propel the company forward by ensuring that the employees master the trade in a fast and efficient way. Acquiring a company you have little knowledge about is such a risky business venture that should be handled with utmost care. However, ther are also a myriad of other good reasons and benefits accrued from it. A business that may be declining in sales my get a chance to revive itself and make its presence known by merging with other integrating both services and products to a common market therefore extending its influence in the market share. It all calls for reinforcement of total confidence in both the company’s and the acquired company’s task force, reliability and enthusiasms and your company visions (Crum 2013). The biggest obstacle to overcome is little knowledge of the firm to be acquired which, with the right decision and preparedness, it can easily be overcome.   Bibliography Read More