Dell Shakes Up Tech World With Record-Setting $67 Billion EMC Deal

Dude, you’re getting the cloud! Dell’s announcement that it is buying EMC for a hefty $67 billion looks to shift the aging tech hardware giant to software, large enterprise and especially big data, among other solutions.

Dell: From PC giant to storage, and possibly, eventually, software colossus in one fell swoop.

On Wall Street, as so often is the case, it is the price tag that dominates the headlines. And the $67 billion that Dell, with the help of Silver Lake, is ponying up through a cash and stock package for EMC is certainly nothing to sneeze at, taking its place as the biggest tech deal in history.

Beyond the billions being shelled out, questions beg answers: Just what is Dell looking to accomplish, and what are the implications for cybersecurity, data and Dell in general?

The deal is a long way off from completion, as Dell said it is slated to be done between May and October of next year. But in the meantime, Dell continues its quest to move beyond consumer technology in favor of an enterprise-centric strategy.

Some particulars: EMC owns VMware, with about an 80 percent stake. VMware will continue to be a publicly traded company. But by grabbing EMC, and by extension some of its VMware operation tech, Dell effectively is buying its way into the large enterprise market, where up till now it has served SMBs for hardware and other IT needs.

One key shift has been the inexorable rise of tablets and other devices to bring users away from being tethered to desktops. EMC holds sway with devices and platforms that store data, and Dell now gets to scale into data centers, networking and storage, where in the latter arena EMC has more than 20 percent global market share, roughly double that of Dell’s current presence.

And a key strategic move comes as Dell also would gather up software capability via both EMC and VMware, a key factor in pursuing more private cloud capability, where Dell currently lacks scale, and possibly move to (eventually) embrace the public cloud, where companies such as Amazon Web dominate.

Within security, EMC offers up a suite of storage, data analytics and security, due to the latter’s Pivotal business. Pivotal has a presence in building out data and cloud services for large companies such as General Electric and BMW. In fact this may be a roundabout way for Dell to eventually enter the realm of the Internet of Things, where smart — and corporate — analytics are a necessity.

With reference to cybersecurity, EMC has RSA, which has been around for more than 30 years and which has among its suite of software fraud detection and network monitoring solutions. This is a fast growing subset for EMC, with double digit percentage gains year over year. That is no doubt an attractive niche for Dell, as it gets to buy, rather than build, presence in this market.

By building a “Swiss army knife” platform that caters to businesses of all stripes and sizes, Dell would look to compete with IBM and HP most directly in corporate technology. In the end, Dell’s rationale just may be: if you can’t beat ‘em, buy the technology that will.