The storage vendor EMC's buyout of Data General for about $US1.1 billion is not likely to mean major layoffs for the employees of either company in New Zealand.
Data General managing director Pacific region Dan O'Hara says: "The only potential areas for attrition are finance and administration and there are no people in that category in New Zealand."
Data General has about 20 people in New Zealand and the local operation was already lean due to about a dozen people being laid off early last year.
EMC Australia and New Zealand managing director Mike Foster says EMC, which has seven staff in Auckland and Wellington offices is recruiting in New Zealand. He says real operational changes won't take place for another two or three months although he doesn't see any direct impact for the local organisation.
At a press conference announcing the deal, Massachussets-based EMC president and CEO Mike Ruettgers said the deal is the result of EMC hearing from customers that it's midrange storage needs are not being met. He believes the acquisition should allow EMC to increase its target market by as much as 40%.
"Data General's Clariion storage servers will become part of EMC's storage business. Clariion, which is aimed at the midrange Unix and NT markets, will complement EMC's Symmetrix products at the high end," says O'Hara.
Data General's Aviion application server line, which is the bulk of its business in New Zealand, will run as a separate division of EMC.
"We're hopeful our Clariion business will really ramp up as a result of getting EMC's distribution resources," says O'Hara. "We've primarily gone through an OEM [original equipement manufacturer] model and have only got into direct distribution in the last two or three months."
EMC - which has 12,000 employees worldwide - is looking to hire 1500 more people, most of them at the Massachusetts headquarters, Ruettgers says.
Data General has some 5000 employees globally. Corporate headquarters will remain at the EMC site, Ruettgers says.
The merger will be positive for EMC and Data General customers, say analysts.
"This is probably going to be good for the customers of both companies," says Robert Gray, at market research company IDC. "This will broaden the business for EMC. EMC has clearly demonstrated the ability to both develop products and to manage the storage business to the highest level of competencies ... This [merger] means Clariion products will be assertively brought and presented to a broader set of clients. EMC has a very large sales organisation."