On October 12, Dell announced its plans to acquire EMC Corporation for $67 billion, the largest technology industry deal to date, a deal clearly intended to bolster Dell’s ability to compete in the increasingly lucrative corporate data center market. This move follows HP’s split into two organizations which itself was engineered to free HP’s enterprise business from the low-margin shackles of its consumer PC and printer business. While the Dell-EMC deal will accelerate the transition of corporate data assets to the cloud, the new entity could face significant challenges that hamper its ability to make it rain.
Our experience conducting war games for Global Fortune 100 companies and analyzing competition in enterprise IT has made it clear that the market is undergoing a dramatic transformation. Our analysis, conducted over an extensive period of time and involving a variety of players, demonstrates that this transformation is characterized by several confluent factors that the combined EMC-Dell will have to navigate to achieve success: