How will Dell justify its massive payout for EMC?

The big question is whether Dell is buying EMC to embrace the cloud, or resist it.

Dell EMC acquisition
Credit: REUTERS/Bazuki Muhammad

Dell's $67 billion acquisition of EMC stacks up as the largest technology deal in history. But if Michael Dell is gobbling up storage giant EMC in an attempt to stem the tide of movement from on-premise proprietary data centers to the cloud, it might be too little too late. 

Aside from merely bulking up, what exactly is Dell trying to do with EMC? If he hopes to leverage his new toy and its 83% stake in VMware to move deeper into the cloud, then this deal could end up justifying its enormous price tag. In a conference call about the deal, EMC CEO Joe Tucci reportedly claimed that being part of Dell as a private company would speed the development of cloud-based technologies.

Maybe so. But some observers have suggested that the combined entity is really designed to cut costs and create more compelling products for enterprise data centers. (Tucci reportedly focused on that during the conference call.) And it's not like VMware's nascent cloud efforts are an imminent threat to AWS, Microsoft Azure, or the Google Cloud Platform.

No matter the scale or the quality of the companies involved or whether they're public or private, I believe that strategy is doomed to fail. From where I sit, the momentum to the cloud—the public cloud—is now unstoppable. Forward-thinking enterprises are already racing to move everything they can to the cloud, and even the most conservative companies are looking at ways to follow them.

Sure, there's still plenty of money to be made in selling enterprise IT products. And Dell-EMC could be well positioned to rake in a bigger chunk of that spending together than they do separately.

But fighting for the declining dollars in on-premise IT is not where the growth is. It's not where the innovation is. It's not where the future is. And it's not a good idea for Dell or EMC or Dell-EMC.

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