Michael Dell has a flair for the grand gesture. He showed that Monday when his namesake company announced what may be the industry's biggest ever acquisition, as it makes itself a go-to tech provider for large businesses.
Dell said it will pay $67 billion to purchase EMC, which makes data storage products, and its VMware subsidiary. EMC's crown jewel, VMware makes so-called virtualization software that lets companies run multiple computer systems on a single computer server.
The proposed transaction would move Round Rock, Texas-based Dell further away from the consumers who made it a household name and push it more firmly into the realm of large business customers.
Dell with EMC "will have one of the most complete and unified portfolios, which should provide them additional reach into larger business opportunities they may have not had access to as individual companies," IHS analyst Craig Stice said in a note to investors. That combination will help Dell compete against HP, IBM and Cisco Systems as they all try to be a one-stop shop to corporate customers, he said.
It's a far cry from the PC maker made famous in the early 2000s in TV commercials featuring a hyperbolic twentysomething targeting families with the catchphrase, "Dude, you're getting a Dell!"
The deal would burnish the appeal of Dell for corporate customers, with a portfolio ranging from servers to enterprise-focused services.
"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 center, converged infrastructure, hybrid cloud, mobile and security," Dell founder Michael Dell said in a statement.
EMC's business has been roughed up over the past several years as the cost of data storage has fallen, The New York Times noted. Most of its value lies in its 81 percent share of VMware, long the dominant maker of virtualization software for consumers and businesses. Such software can make a single server run tasks that ordinarily would require separate machines, allowing for greater efficiency and cutting hardware costs.
Under the terms of the deal, the VMware unit would remain a publicly traded company.
Hedge fund management firm and major EMC investor Elliott Management, which has been critical of the company, praised the agreement. "This landmark transaction will create a powerhouse with leading franchises across enterprise IT," Elliott senior portfolio manager Jesse Cohn said in a statement.
For Dell, the deal continues a reinvention stretching back several years as the technology industry began shifting to what has become known as the "." It is taking a dramatically different tack from Hewlett-Packard, which is , one focused on its PC and printing business, the other on enterprise services.
Dell has made a name for itself selling general-purpose, inexpensive servers. In the first quarter of the year, Dell held the No. 2 spot in servers worldwide with 18 percent of the market and server revenue for the period of $2.3 billion, up 12.6 percent from the year-earlier revenue, behind HP (24.9 percent, $3.2 billion in revenue), according to market researcher International Data Corp.
A combined Dell-EMC would be a formidable presence, said Bernstein analyst Toni Sacconaghi. The new company's more than $80 billion in revenue, though, "will certainly deserve an asterisk -- nearly half of that will still come from PCs and related services and accessories."
In early trading Monday, shares of Hopkinton, Massachusetts-based EMC were up 1 percent to around $28.16. VMware, based in Palo Alto, California, was down 11 percent to around $70.
Dell, once a publicly traded company, became aafter it was by Michael Dell and investment firm Silver Lake Partners.
Under new the deal, EMC CEO Joe Tucci would continue as chairman and chief executive officer of EMC until the transaction closes, and then Michael Dell will take over as chairman and CEO of the combined company.
The EMC board of directors has already approved the agreement and plans to advise its stockholders to do the same. The companies expect to close the deal in mid-2016.
Editors' note: This story was updated throughout the day with additional details and analysts' comments.