We’ve come a long way from “Dude, you’re getting a Dell!”
The popular catchphrase used in a series of advertisements during the early 2000s represented Dell the personal computing giant during its heyday.
More than a decade later, Dell — and nearly every other PC company — are struggling to find a place as smartphones and tablets pull consumers away from the PC.
However, with Dell’s $67 billion acquisition of EMC — the largest tech deal ever — is the latest move by tech companies toward a potential promised land in the surging enterprise market. According to Gartner, enterprise IT spending worldwide is expected to reach $2.69 trillion this year.
Dell’s huge bet on EMC signals the company — which went private in 2013 following a long battle with activist investor Carl Icahn — is seeking out a giant slice of that enterprise pie.
“(Dell chairman and CEO) Michael Dell is running a major enterprise tech stalwart, a far cry from his consumer PC days, an impressive turnaround in our opinion,” says FBR Capital Markets analyst Daniel Ives.
Wall Street has already witnessed several deals and partnerships this year, from Hewlett-Packard’s $2.7 billion purchase of Aruba Networks to even iPhone maker Apple teaming up with stalwarts Cisco and IBM to get more of its devices in front of businesses.
And Dell’s deal to scoop up EMC will likely push rivals including Oracle, HP and Cisco to “go on the defensive,” says Ives. “There is an aggressive push for these large vendors to use their abundant cash and customer base to put fuel back in the growth engine. This EMC/Dell deal is the tip of the iceberg and will have a major ripple effect across tech with a surge of M&A now on the horizon.”
Follow Brett Molina on Twitter: @brettmolina23.
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