For years, Dell Inc. has been working to transition from being a PC-maker into a wide-ranging, full-service technology company.
On Monday, the company, based in suburban Austin, took the biggest step yet in its transformation, agreeing to buy data storage giant EMC Corp. for $67 billion — a deal that is the biggest information technology merger in history and that turns Dell into a “behemoth” in the technology industry, analysts say.
The acquisition will transform Dell into a major player in the data storage market.
Dell was started by Michael Dell in 1984 when he was a freshman at University of Texas, and it went on to change the PC business with low costs, customized orders and direct sales first over the phone and later on the Internet.
The deal cements the company’s shift from hardware like PCs to the more profitable areas of storage and other business services. Dell has grown into a global organization with more than 100,000 employees and has about 14,000 workers in Central Texas, where it is the area’s largest private employer.
Since going private in 2013 in a $25 billion deal, Dell Inc. has been investing in research and development and expanding its software and services business as those in the technology industry continue to struggle with soft PC sales.
“Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data center, converged infrastructure, hybrid cloud, mobile and security,” Dell Inc. CEO Michael Dell said in a written statement.
Dell will serve as chairman and CEO of the combined company. Joe Tucci, chairman and CEO of EMC, will remain in those roles until the deal is complete.
Dell Inc.’s headquarters will stay in suburban Austin. The combined enterprise systems business headquarters will be in Hopkinton, Mass., where EMC is based.
FBR analyst Daniel Ives said the deal means Dell is “no longer your grandma’s PC company.”
“It’s a landmark, historic deal that really brings them into the enterprise market and makes them a behemoth,” Ives told The Associated Press.