Dell said to be in talks with EMC over possible huge merger

Dell might buy some or all of the storage giant, the Wall Street Journal said

Dell, led by CEO, Michael Dell, is reportedly in advanced talks to buy EMC.

Dell, led by CEO, Michael Dell, is reportedly in advanced talks to buy EMC.

Dell is reportedly in talks to buy all or part of enterprise storage powerhouse EMC, which would mark a bold and unexpected new chapter in the PC maker's history.

A total merger would be one of the biggest deals ever in the technology industry, with EMC holding a market value of about US$50 billion. It would also bring together two of the most important vendors to enterprise IT departments.

The report about the deal Wednesday in the Wall Street Journal cited unnamed sources, and cautioned that the the companies might not finalise any agreement.

EMC has resisted calls to spin off the parts of what it calls a "federation" of businesses: EMC Information Infrastructure for storage, RSA for security, Pivotal for cloud platform and agile development, and VMware for virtualization. VMware is publicly traded but about 80 percent owned by EMC.

EMC executives say that structure brings together the key elements of enterprise IT while letting each business innovate on its own, but critics have said the company might be worth more in parts. In January, EMC announced layoffs and a disappointing revenue forecast.

A complete merger would combine two of just a handful of giants that are attempting to combine all the components of IT infrastructure: Computing, network, storage and virtualization. That roster also includes Hewlett-Packard, IBM, Cisco Systems and Oracle.

It would mark the latest chapter for Dell, which built a dominant position selling PCs and then servers, but then saw its business decline as those markets commoditised. Michail Dell fought to take the company private, and has been quietly rebuilding Dell out of the limelight.

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Stephen Lawson

IDG News Service
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