Dell snaps up data storage firm EMC in ‘historic deal’

NEW YORK — Dell is buying data storage company EMC for $67 billion US in a huge bet on a segment of technology that has proven to be more profitable than the slumping personal computer market.

The acquisition announced Monday marks Dell’s latest attempt to lessen its dependence on the PC industry that it helped pioneer as demand for desktop and laptop machines weakens amid the growing popularity of smartphones and tablets.

The price makes this the largest deal ever between two technology companies, eclipsing Avago Technologies’ proposed $37-billion US acquisition of rival chipmaker Broadcom, announced five months ago.

The Dell-EMC union is an illustration of how older technology companies are scrambling to adapt to the upheaval unleashed by Apple’s introduction of the trendsetting iPhone eight years ago and the advent of digital services that are hosted in remote data centres so they can be reached by any Internet-connected device.

Since going private in a $25-billion US deal completed in 2013, Dell Inc. has been investing in research and development and expanding its software and services business.

EMC, meanwhile, has been shifting from a provider of storage hardware such as on-premise data centres to offering a more comprehensive suite of products to businesses, from cloud storage to security offerings.

“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 centre, converged infrastructure, hybrid cloud, mobile and security,” 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.

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 wrote in a Monday note.

EMC makes data storage equipment and provides other IT services to companies. It also has an 80 per cent stake in cloud-computing company VMware Inc., which will stay an independent, publicly traded company.

Dell’s headquarters will stay in Round Rock, Texas. The combined enterprise systems business headquarters will be in Hopkinton, Mass., where EMC is based.