Dell reach a deal for the biggest tech acquisition deal ever

Dell announces that the company will acquire EMC Corp. for $67 billion. The most expensive acquisition of any tech company ever recorded. The deal will ensure that the company will be able to stay competitive in the current technology industry.

CNN Money reported that the acquisition means Dell is transforming its business direction to become an IT solution provider. This is the first big acquisition made by the company after its founder, Michael Dell took the company private in 2013.

By acquiring EMC Corp, Dell will have access to the company's business as one of the largest storage hardware providers in the world. Most important of all, Dell will also own 81 percent stake in VMware. VMware is currently the biggest company providing virtual software allowing many businesses to run different operating systems on their devices.

According to The Wall Street Journal, VMware virtualization software revenue is worth $6 billion in 2014 alone while EMC Corp Data storage business brings a total of $16.5 billion in revenue for the same year. This data proves that Dell latest acquisition will benefit the company a lot more in the long run. Besides acquiring the stake in VMware, the company will also own stake in RSA and Pivotal which main business is digital security and cloud computing. Both companies have a combined revenue of $1.24 billion for 2014.

Deals of the acquisition as reported by The New York Times reveals that Dell will pay $24.05 a share to EMC shareholders including other stocks that are related to EMC. Michael S. Dell is confidence that this deal will reverse both companies' years of underperforming and declining profit. He said in a statement "The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry-leading innovation across their entire technology environment."

Currently, Dell biggest competitors are Amazon, Google, and Microsoft as all these companies are racing to become the biggest server maker and providing IT solutions as the sector is growing. Besides that, the aggressive growth of new start-up could also shake up the big firm as these new start-up tends to produce a technology with a lesser cost.

Previously, Dell bought another IT solution company Perot Systems for $4 billion in 2009. However, it took 4 years before the company able to operate at its full capacity after the acquisition.

This issue is also a concern for Steve Herrod, VMware's former chief technology officer. According to him "Integrations like this are extremely distracting and confusing and can take a lot of time." However, with Dell still being a private company, this pressing issue will not be a problem for the founder, Michael S. Dell.