Editor’s note: Analysis: Last week at EMC World, the tech giant disclosed much more than plans for the company post-merger with privately held Dell when chairman Michael Dell renames the combined company Dell Technologies. EMC, which has a big presence in the research Triangle area with manufacturing, data center and R&D centers, is hardly disappearing with new products and services coming, note a team of analysts from Technology Business Research. TBR contributors to this multi-part report include: Christian Perry, Geoff Woollacott, Krista Macomber and Andrew Smith.

HAMPTON, N.H. – Amid extensive IT disruption fueled by the ongoing customer desire to transform IT ecosystems and accelerate business initiatives, EMC rests on a critical pivot point that determines its role as a next-generation leader.

But through an umbrella theme of “modernize” at EMC World 2016, the storage giant showcased innovation destined to push the company directly into leadership status across a number of modern technology realms. EMC is responding to the accelerating transition of IT from a cost center to an enabler of business advantage, with a steady shift in its innovation model toward flash technologies, abstracted and increasingly open software functionality, and “as a Service” IT delivery.

More notably, EMC is preparing to diverge from its hallmark horizontal business model through its agreement to be acquired by Dell — an industry landmark both in its $67 valuation and the implications of creating a combined $80 billion behemoth. EMC World 2016 served as a ceremonial, unofficial passing of leadership from EMC CEO Joe Tucci to Dell CEO Michael Dell, marked particularly by planned branding of the combined organization as Dell Technologies.

EMC executives touted continued innovation, with all major aspects of the company’s storage portfolio refreshed to date in 2016, and messaged the potential inherent in combining Dell’s scale and vast midmarket entrenchment with EMC’s large enterprise cachet. Such messaging is crucial as EMC navigates a degree of customer and partner uncertainty as the deal moves toward finalization, expected in 2H16.

EMC has an increasingly clear strategy and the necessary elements in place to mitigate attrition in its vast existing storage installed base and grow in underpenetrated markets, such as the midmarket, during 2016. Customers at the event lauded EMC’s ability to act as a strategic IT consultant. In an era of seemingly endless choices for both on-premises and off-premises IT, this ability is a critical step forward for the historically product-led vendor, particularly as customers turn to their IT providers for high-value engagements centered on navigating complex and challenging transformation initiatives. The longer-term path for EMC will center on building from this position following its integration into Dell.

Competition is fierce, and will remain so as peers such as Hewlett Packard Enterprise (HPE) also evolve into transformation agents and seek to leverage the Dell-EMC integration as an opportunity for competitive displacement. However, EMC executives are clearly working to identify pockets of industry transformation they can better capitalize on jointly with Dell, which portends quick integration when the acquisition is finalized. Further, Dell’s supply chain and channel expertise, along with its newfound permission to play in the enterprise, will further spawn opportunity for EMC and its broad set of technologies.

EMC adapts its converged systems business as a springboard for evolving IT requirements

VCE continues to serve as EMC’s sharp spearhead into next-generation infrastructures. This was particularly evident with the unveiling of VxRack System 1000 with Neutrino nodes, which joins a perpetually expanding roster of VCE’s blocks (Vblock), racks (VxRack) and appliances (VxRail). EMC’s strategy to modernize the data center relies heavily on VCE’s converged and hyperconverged infrastructure products, which can help customers overcome what Guy Churchward, president of EMC Core Technologies, referred to as “technical debt,” or investment in traditional infrastructure that no longer adequately accommodates modern, data-heavy workloads.

A challenge articulated by an EMC customer was the process of mapping technologies to IT requirements, particularly in a market teeming with not only infrastructure options, but also with cloud technologies. However, VCE is leaning directly into innovative efforts that provide customers with clear-cut solutions for workload expansion and cloud needs alike. The fully software-defined VxRack Neutrino variant is an apt reflection of these efforts, as it targets customers long seeking turnkey support for OpenStack and cloud-native platforms such as VMware Photon and Hadoop. As with VCE’s other solutions, this hyperconverged solution is pre-engineered and delivered as a full stack of compute, storage and networking that allows deployment within hours.

While VxRack System 1000 with Neutrino is a unique market offering, other products in VCE’s portfolio more closely compete with converged and hyperconverged products from HPE, Lenovo, Nutanix, SimpliVity and others. However, VCE is positioning aggressively to gain market share in these crowded markets. For example, in the first 44 days of selling its cost-competitive VxRail hyperconverged solution, VCE gained 146 customers in 37 countries and predicts it will be the hyperconverged market share leader in 2017.

Although TBR expects VCE’s momentum to continue for the foreseeable future, particularly in the hyperconverged market, its ability to sustain progress after Dell’s impending acquisition of EMC depends on VCE’s ability to navigate portfolio and partner corridors that intersect. For example, Dell’s partnership with Nutanix will create strategic challenges for the Dell Technologies sales team, which must identify discrete targets and use cases to avoid field overlap. Further, Dell’s converged infrastructure products will require alignment within VCE’s growing portfolio, which increasingly accommodates customers that sit squarely in Dell’s target base, including SMB and remote office/branch office. However, TBR believes these pieces generally complement, rather than conflict with, VCE’s portfolio. There are already synergies — for example, Dell is now reselling VxRail and VxRack.

As with broader efforts across EMC’s federated businesses, VCE is investing to ensure relevancy in the cloud era. Infrastructure providers can morph hardware to become more flexible and management platforms to become more cloudlike, but the exodus to cloud continues. In this quickly evolving IT industry, efforts such as Native Hybrid Cloud become even more critical to VCE’s continued relevancy.

Part Two: How EMC is position to bridge current and next-generation data requirements – and much more.