What does the Dell-EMC merger mean for the two companies?
The world was shocked earlier this month to hear of the $67 billion merger between computer giant Dell and leading data-storage provider EMC. This deal is the most expensive tech industry merger ever, which surprised industry analysts and the general public.
Many, after this announcement, are left wondering why was this deal made. Business Insider reports that even though EMC still is profitable in the area of data-storage, it could face perilous waters ahead. Most of this uncertainty is due to the increasing number of companies that are sending their data to the cloud through giants such as Google, Microsoft and Amazon.
This option is generally cheaper and less burdensome, which allows for businesses to have greater mobility and stake their claim in the changing technology world. Dell currently lacks in the data-storage area, which is why this merger will make it more competitive in a harsh marketplace. However, industry analysts still wonder if the enormous price tag attached to this deal will ultimately be worth it in the long run.
"So while this deal may well make Dell's storage business more competitive with HP, it's just making it bigger fish in a shrinking pond," Business Insider writes. "HP and IBM are going through their own painful transformations to fit this new market, so at least Dell's not alone, but it's still a time of great transformation."
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