The computer making giant Dell Inc. (NASDAQ:DELL) is entering into a merger with EMC Corporation (NYSE:EMC), a major name in data storage. The two companies believe that a wide diversification in product portfolio will make them the one stop shop for bigger companies. According to HP Inc (NYSE:HPQ) the two companies are better off working alone and focused on innovation.
Silicon Valley icon Hewlett-Packard, on the other hand, broke apart in November, creating a PCs-and-printers vendor called HP Inc. and an outfit selling servers, storage and networking gear called Hewlett Packard Enterprise.
HewlettPackard have on the other created an entirely different outfit by the name HP Inc . This will be for vending Printers and PCs. They also have another outfit for selling storage, networking and servers. It is called Hewlett Packard Enterprise
Dell and HP are both taking different routes as a response to a declining market. It is expected that PC shipments will drop done to 7.3%. This is according to International Data Corp.
Increased demand for data center hardware
As much as there is a low demand for PCS, there I a rise in the demand for data center hardware which mainly uses cloud computing. The demand in the market is expected to grow at a rate of 10.2 % every year to a tune of $ 20.3 billion in 2020. IDC also expects great growth for the 3-D printing market.
According to Dell founder and CEO Michael Dell said that Dell and EMC coming together is the creation of a very strong position. There are those who are no strangers to the powerful position like Meg Whitman the CEO HP Enterprise. She however had to deal with the pitfalls. Whitmann says that HP Enterprise has been able to move faster going it alone. This is inspite of the assumed benefits of consolidation
Whitman says that if HP and EMC work separately then they can effectively and efficiently. She adds that once big it is hard to be fast and in several different businesses.
The manager director for Mizuho Securities USA Inc Abhey Lamba says by Dell going big they are able to negotiate prices with the vendors.
