Newswise — The world’s third largest producer of personal computer, Dell, is in talks to buy data-storage giant EMC. Aija Leiponen, associate professor at Cornell’s Dyson School of Applied Economics and Management, says that if the two companies revamp themselves the deal might work, but that – she says – is a big if.

Bio: www.dyson.cornell.edu/people/aija-leiponen

Leiponen says: “The merger/acquisition of EMC by Dell makes a lot of strategic sense for Dell. EMC -thanks to VMWare - has positioned itself as a player in the growing cloud and big data industry, handling terabytes of clients' data via product and service offerings.

“It is less clear how EMC might benefit from the deal. Dell has been attempting to grow its IT service while its hardware businesses appears to be declining, and perhaps the merger would help it realize some of these plans.

“Many if not most mergers actually destroy value, and merging two companies that have had trouble renewing and reviving themselves rarely succeed when combined. The merger is thus extremely risky. EMC and Dell are in complementary segments of the computer industry and if all goes well the two companies might be more valuable together than apart. But that's a big if.

“While there is some overall logic to combining these two companies, one has to remain skeptical about the challenge of integration. Either way, both companies need to revamp themselves to truly compete and innovate in the era of the cloud and big data.”

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