Dell in Talks with EMC over Possible Merger

Analysts have also been calling for Dell to acquire EMC’s data storage business, but it could end up taking over the entire company.

The future of EMC has been uncertain over the past year or so as its traditional storage business has stagnated in the face of competition from cloud computing, growing at only a 2 percent annual rate.

Recently, EMC IT senior vice president Jon Peirce revealed that the company’s internal IT infrastructure now leverages solutions offered by the other vendors of the federation, such as VMware’s vCloud Air as an off-premise extension of the company’s on-premise private cloud.

In August, Re/code reported that EMC was contemplating a deal under which it would be acquired by VMware, which has a market cap of about $35 billion. EMC reportedly began a strategic review to explore various options previous year.

Dell Inc.is in talks to combine with all or part of EMC Corp., which is looking at ways to appease shareholders disappointed with returns and its efforts to replace an outgoing chief executive officer, people familiar with the discussions said.

The possibility of an EMC merger worries many in Massachusetts, where EMC employs about 9,500 people.

EMC stock rose 7.1% in after-hours action to 27.80. In January, EMC announced layoffs and a disappointing revenue forecast. EMC needs to both pacify Elliott and find a successor for CEO Joe Tucci, who was supposed to step down back in February. Dell was taken private in a $25-billion deal in 2013.

Dell ranked third in global PC shipments in the second quarter after Lenovo Group Ltd and HP, according to research firm worldwide Data Corp.