I must confess to not having paid sufficient attention to the growing rumours about Dell buying EMC. I think it was partly because I wasn’t sure how the two businesses could be made to fit together, which made me wonder whether the people behind the prospective deal would have the energy and steadfastness to see it through to the point where it did make sense.
Of course, once these things start to leak out, they are usually followed by more stories with more information and detail, usually from sources ‘familiar with the talks’ or ‘with knowledge of the matter’.
According to Bloomberg, “two people” think the deal could be completed very soon and “one person” said Dell was speaking to banks to raise “at least $40 billion to finance the purchase”.
Apparently, the deal will help the companies “cater to more customers and cope with a slowdown in demand for computers and storage equipment”. By the way, it’s an interesting argument to suggest two companies coping with a slowdown in demand for their core products should combine to make a bigger business batting to overcome a slowdown in its core products.
While the deal is likely to be costly and difficult to finance, Bloomberg said “it would create a computing colossus that combines EMC’s leadership in digital storage with Dell’s share of the market for servers, which help businesses tackle mammoth computing tasks”.
Forbes isn’t convinced the deal should go ahead. An article headlined ‘A Dell-EMC deal doesn’t make sense. Here’s why’ acknowledges there are some attractions for Dell in EMC’s portfolio but adds: “But does it all add up enough to justify tens of billions of dollars for the entire package? Probably not.”
The article’s author, Stacey Higginbotham, warns that the deal doesn’t address “the existential plight of both companies: a future where their core businesses (and profit centres) are under attack and facing almost certain decline. And that’s why technologists are still scratching their heads”.
Daniel Ives, analyst at FBR Research, is not among the head scratchers. He told the Wall Street Journal: “Dell and EMC would be a tech behemoth. It would change the landscape of enterprise computing.”
Leaving aside whether it makes sense from a technology or financial point of view, I feel there’s a bigger question not being addressed here and it’s one that could have serious consequences: what will they call the “behemoth” that the deal creates? Should it be DEMC (pronounced Dempsey)? Or DellMC (DellMSea)? Or how about MCDell (not pronounced MickDell but MseaDell)?
If Dell gets the name wrong, it could get a bad rap.
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