Dell, HP Bet on Different Strategies Amid Roiling Business Tech Market — WSJ
The markets for business technology are so roiled, and the path forward so unclear, that two of the biggest players in the field are taking opposite tacks. #Dell Inc., the Round Rock, Texas, computer maker is merging with data storage leader #EMC Corp. in the largest acquisition in tech history, which recently took a step forward Tuesday when the deal was approved by EMC shareholders.
Silicon Valley icon #HewlettPackard, on the other hand, broke apart in November, creating a PCs-and-printers vendor called HP Inc. and an outfit selling servers, storage and networking gear called #HewlettPackardEnterprise.
Dell and EMC are betting that a broad, diverse product portfolio will make the combined company a one-stop shop for large companies. Hewlett Packard, meanwhile, says the two halves of the former tech giant are better able to maneuver independently and focus on innovation.
Both moves are responses to markets in persistent decline. PC shipments plummeted 9.8% in 2013, 10.4% in 2015 and are expected to drop another 7.3% this year with $161 billion in sales, according to International Data Corp. Revenue from conventional printers hasn’t grown for a couple of years. The $64 billion market for servers, storage and network hardware has been falling since 2014 and is expected to slide 1.3% annually for the next four years.
One bright spot is the small but fast-growing market for data-center hardware adapted to cloud-style computing, which pools computing and storage and allocates them dynamically.
The market for this sort of hardware, which is an alternative to using cloud-computing services for companies that want to maintain their own equipment, is expected to grow 10.2% annually to $20.3 billion in 2020, according to IDC. The research firm also expects the $26.7 billion market for 3-D printers to grow at a 27% compound annual growth rate until 2019.
Dell and EMC are betting that the combined company can use its position to sell more cloud-related equipment.
“You get an unbelievably strong position when you put Dell and EMC together in that very important, growing space,” Dell founder and CEO Michael Dell told The Wall Street Journal in October.
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