Why is Dell buying EMC for $67 billion?

One of the biggest takeover in the technology industry – Dell to acquire network storage giant EMC Corp. for approximately $67 billion – now that is really huge.

In an interview on CNBC, Michael Dell said that “the revenue synergies here are three times larger than the cost synergies.” On the other hand, EMC CEO Joe Tucci noted that Dell will give EMC a great channel for more of its products. “For many vendors where Dell is the number one reseller. Now we’ll favor the family products.”

Michael Dell would become chairman and CEO of the combined company. EMC chairman and CEO Joe Tucci would remain in that position until the deal closes.

Now why is Dell buying EMC? Here is my take:

On the first look, one might say what are these two legacy companies doing? Yes, they may be legacy companies but they are two successful legacy companies.

The two needed each other to be able to compete strongly considering the advent of cloud infrastructure and with the emergence of new-generation competitors. Dell being strong in PC and EMC being strong in the storage area.

Article source: INFOCHAT – Click here to continue reading…

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