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Dell Technologies Inc. is an American multinational corporation in the information technology industry. It is based in Round Rock, Texas. It was formed as a result of the September 2016 merger of Dell and EMC Corporation (which later became Dell EMC).[2]

Dell Technologies Inc.
Public
Traded asNYSEDVMT
(Class V common stock – tracking stock for VMware)
Russell 1000 Index Component
IndustryInformation technology
PredecessorDell
EMC Corporation (now Dell EMC)
FoundedSeptember 7, 2016; 2 years ago (2016-09-07) as a merger of EMC Corporation and Dell Inc.
FounderMichael Dell
HeadquartersOne Dell Way, Round Rock, Texas, U.S.
Area served
Worldwide
Key people
Michael Dell
(Chairman & CEO)
Products
Revenue Increase US$78.660 billion (2018)[1]
Decrease -US$3.333 billion (2018)
Decrease -US$3.728 billion (2018)
Total assets Increase US$122.281 billion (2018)
Total equity Decrease US$9.710 billion (2018)
Number of employees
138,000 (2017)
DivisionsDell Client Solutions Group
Dell EMC Infrastructure Solutions Group [1]
SubsidiariesSecureWorks
Pivotal Software (70%)
VMware
Websitedelltechnologies.com
Footnotes / references
[1]

Dell's products include personal computers, servers, smartphones, televisions, computer software, computer security and network security, as well as information security services.[2] Dell ranked 35th on the 2018 Fortune 500 rankings of the largest United States corporations by total revenue.[3]

Contents

Current operationsEdit

In 2016, approximately 50% of the company's revenue was derived in the United States.[1]

Dell operates under 3 divisions as follows:[1]

  • Dell Client Solutions Group (60% of 2016 revenues) – produces desktop PCs, notebooks, tablets, and peripherals, such as monitors, printers, and projectors under the Dell brand name
  • Dell EMC Infrastructure Solutions Group (35% of 2016 revenues) – storage solutions
  • VMware (5% of 2016 revenues) – a publicly traded company focused on virtualization and cloud infrastructure

Dell also owns 4 separate businesses: RSA, Pivotal Software, SecureWorks, and Boomi, Inc.[1]

HistoryEdit

 
Dell–EMC merger wordmark introduced in 2016

On October 12, 2015, Dell announced its intent to acquire EMC Corporation, an enterprise software and storage company, in a $67 billion transaction.[4] It was labeled the "highest-valued tech acquisition in history".[5] In addition to Michael Dell, Singapore's Temasek Holdings and Silver Lake Partners were major Dell shareholders that supported the transaction.[6]

On September 7, 2016, Dell Inc. completed the merger with EMC Corp., which involved the issuance of $45.9 billion in debt and $4.4 billion common stock.[1][7]

The Dell Services, Dell Software Group, and the Dell EMC Enterprise Content Divisions were sold shortly thereafter for proceeds of $7.0 billion, which was used to repay debt.[1] In October 2017, It was reported that Dell would invest $1 billion in IoT research and development.[8][9][10]

Dell Inc. had returned to private ownership in 2013, claiming that it faced bleak prospects and would need several years out of the public eye to rebuild its business.[11] At the time of the announcement of the merger with EMC, it was believed that the company's value has roughly doubled since the going-private transaction.[12] EMC was being pressured by Elliott Management Corporation, a hedge fund holding 2.2% of EMC's stock, to reorganize the unusual "Federation" structure, in which EMC's divisions were effectively being run as independent companies. Elliott argued[13] this structure deeply undervalued EMC's core "EMC II" data storage business, and that increasing competition between EMC II and VMware products was confusing the market and hindering both companies.

The Wall Street Journal estimated that in 2014 Dell had revenue of $27.3 billion from personal computers and $8.9 billion from servers, while EMC had $16.5 billion from EMC II, $1bn from RSA Security, $6bn from VMware, and $230 million from Pivotal Software.[14]

EMC owned around 80% of the stock of VMware.[15] The acquisition maintained VMware as a separate company, held via a new tracking stock, while the rest of EMC were rolled into Dell.[16]

The acquisition required Dell to publish quarterly financial results, having ceased these on going private in 2013.[17]

The combined business addresses the markets for scale-out architecture, converged infrastructure and private cloud computing, playing to the strengths of both EMC and Dell.[14][18]

Opinions on the dealEdit

Commentators have questioned the deal, with FBR Capital Markets saying that though it makes a "ton of sense" for Dell, it's a "nightmare scenario that would lack strategic synergies" for EMC.[19] Fortune said there was a lot for Dell to like in EMC's portfolio, but "does it all add up enough to justify tens of billions of dollars for the entire package? Probably not."[20] The Register reported the view of William Blair & Company that the merger would "blow up the current IT chess board", forcing other IT infrastructure vendors to restructure to achieve scale and vertical integration.[21] The value of VMware stock fell 10% after the announcement, valuing the deal at around $63–64bn rather than the $67bn originally reported.[22]

Possible reverse merger with VMWareEdit

On January 29, 2018, it was reported that Dell Technologies was considering a reverse merger with its VMWare subsidiary in order to take the company public.[23]

ReferencesEdit

  1. ^ a b c d e f g h Dell Technologies 2016 Form 10-K Annual Report
  2. ^ a b Shah, Agam (September 7, 2016). "The new Dell Technologies: 6 things you need to know". PC World.
  3. ^ "Fortune 500: Dell Technologies". Fortune.
  4. ^ "Michael S. Dell, MSD Partners and Silver Lake Lead Transaction to Combine Dell and EMC, Creating Premier End-to-End Technology Company" (Press release). Business Wire. October 12, 2015.
  5. ^ "Dell agrees $67bn EMC takeover". BBC News. October 12, 2015.
  6. ^ "BOOM: Dell to Acquire EMC for $67 Billion". Sovereign Wealth Fund Institute. October 12, 2015.
  7. ^ "Historic Dell and EMC Merger Complete; Forms World's Largest Privately-Controlled Tech Company" (Press release). Business Wire. September 7, 2016.
  8. ^ "Dell Technologies creates new IoT division as part of three-year, $1bn investment". www.businessreviewusa.com. Retrieved 2017-10-19.
  9. ^ "Michael Dell Vows to Invest $1 Billion over Three Years to Fund Internet of Things Business". Fortune. Retrieved 2017-10-19.
  10. ^ Moorhead, Patrick. "Dell Technologies IQT: Doubling Down On The Internet Of Things". Forbes. Retrieved 2017-10-19.
  11. ^ "Dell Makes Case to Go Private in Grim Filing". The Wall Street Journal. March 29, 2013. (Subscription required (help)).
  12. ^ Benoit, David (October 12, 2015). "Dell's Value and the 'Falling Knife'". Wall Street Journal. (Subscription required (help)).
  13. ^ "Elliott Management Sends Letter to Board of Directors of EMC Corporation" (Press release). Business Wire. October 8, 2014.
  14. ^ a b "EMC Takeover Marks Return of Michael Dell". Wall Street Journal. October 13, 2015.
  15. ^ "Dell-EMC: The empty shop". Financial Times. October 12, 2015.
  16. ^ "Dell agrees $63bn acquisition of EMC". Financial Times. October 12, 2015. (Subscription required (help)).
  17. ^ Womack, Brian (October 21, 2015). "Dell CFO Reluctantly Accepts Public Disclosures With EMC Deal". Bloomberg L.P.
  18. ^ "The merger of Dell and EMC stems from the rise of cloud computing". The Economist. October 12, 2015.
  19. ^ Stone, Mike (October 8, 2015). "Dell in talks to buy data storage company EMC: source". Reuters.
  20. ^ Higginbotham, Stacey (October 8, 2015). "A Dell-EMC deal doesn't make sense. Here's why". Fortune.
  21. ^ Mellor, Chris (October 9, 2015). "Dell hooking up with EMC and going public again? Come off it". The Register.
  22. ^ Tom Braithwaite (October 13, 2015). "Dell-EMC deal: why VMware is falling". Financial Times.
  23. ^ "VMware Plunges on Report It May Acquire Dell in Reverse Merger". Bloomberg.com. 2018-01-29. Retrieved 2018-01-29.

External linksEdit