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Dell Builds a $67 Billion Empire

2 minute read

On Oct. 12, Dell announced plans to acquire IT provider EMC Corp. in the biggest pure technology tie-up ever. The deal–which would create a giant worth an estimated $67 billion at a time of massive shifts in the technology world–is a gambit by CEO Michael Dell (below) to transform the company he started in the mid-1980s from his dorm room at the University of Texas at Austin:


Dell, now 50, got his name into millions of American homes by selling custom computers directly over the Internet–a revolutionary idea at the time. Dell still makes home computers, but PC sales have been steadily falling for years, according to research firm IDC. Once the world’s top seller of PCs, Dell now trails rivals Lenovo and Hewlett-Packard.


Dell has been trying for several years to turn his company into a provider of diverse business-technology services. Though selling such high-end gear is lucrative, many companies are increasingly switching to using cloud computing from the likes of Amazon. Merging with EMC, which has a broad range of cloud-based businesses, could help Dell keep pace.


Big breakups, not mergers, are the rage these days. Such moves are partly a response to stockholder campaigns. Dell, however, took his company private in a 2013 leveraged buyout worth $24.4 billion. That move insulated Dell from Wall Street’s demands.


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