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You'd think that if someone was spending $67bn on something that the benefits would be fairly obvious to everybody else. I'd certainly like to think that if I ever had that amount of money, or access to it, and I chose to blow it all on a one-off deal that the overwhelming response from everybody around me would be "what an inspired decision that was".
I think I'd be disappointed if a significant number of people said: "Really? Are you sure? That's an awful lot of money, don't you think? Well, it's your decision, I suppose."
Yet, that appears to be what's happening in the wake of Dell's announcement that it plans to acquire EMC. Some people are excited by the fact that it's the largest takeover deal in the history of IT, but not as many as I would have expected.
There's a good summary of the arguments for and against the deal which are dividing analysts in MicroScope here. My own feeling is that if you can't sum up the reason for a huge deal in a simple sentence that everyone can understand, you're in trouble. And the bigger the deal, the easier it should be to understand.
Fair play to CEO Michael Dell for giving it a crack in the press release accompanying the announcement of the deal, the gist of his argument appearing to be that people are crying out for a one-stop shop from an integrated technology company. "The combination of Dell and EMC creates an enterprise solutions powerhouse bringing our customers industry leading innovation across their entire technology environment," he said. "Our new company will be exceptionally well-positioned for growth in the most strategic areas of next generation IT including digital transformation, software-defined data centre, converged infrastructure, hybrid cloud, mobile and security."
But as many commentators have pointed out, Dell's consolidation with EMC occurs at exactly the moment that former IT one-stop shop HP is busy preparing to become a two-stop shop and against a backdrop of IBM busily reducing its size and technology portfolio. Just because the Dell/EMC deal seems counter-intuitive doesn't make it wrong, of course, but it does make observers more likely to be sceptical of its merits. Bucking the market is all well and good when it comes to profits and sales but not so much when you're talking about merging two businesses while everyone else is splitting theirs up.
It could be seen as a sign of ambition, strength even, that Dell is making such a massive acquisition when many of its larger rivals appear to be retreating from the markets that it's betting big on. Certainly, in contrast to HP, Dell's purchase of EMC could be viewed as a signal of intent given that HP reportedly pulled out of its own prospective takeover of EMC last year.
You could draw a contrast between HP's decision to walk away from the takeover and split up its business with Dell's 'bold' and 'audacious' bid for the storage giant. On the other hand, the big split at HP had presented Dell and other rivals with an opportunity to exploit the uncertainty over how the two separate companies would operate to go out and try and poach HP customers.
Now, the roles are reversed. Dell's plan to buy EMC prompted HP CEO Meg Whitman to pen an email to HP employees describing it as "an opportunity for us to seize the moment". She described the process of trying to integrate Dell and EMC as "a massive undertaking and an enormous distraction for employees and their management team as two very different cultures come together, leadership teams shift and an entirely new strategy is developed".
She claimed that bringing two portfolios together would "require a significant amount of product rationalisation" which would be disruptive to the business and create confusion for customers. "Customers simply will not know if the products they are buying today from either company will be supported in 18 months," Whitman added (people might say the same of HP, of course, as it becomes two different companies).
Given HP's history of disastrous and costly acquisitions (EDS and Autonomy), you could accuse Whitman of admirable chutzpah. Alternatively, you could believe the company's painful write-offs have left it better placed to articulate some of the problems associated with big takeover deals (although the fact it had to write down $8bn twice on acquisitions in the space of six years suggests otherwise).
Anyway, as far as I can see, there are three big questions that need to be answered: Is $67bn a fair price to pay to create "an enterprise solutions powerhouse"? Will the deal actually create an "enterprise solutions powerhouse"? Do customers still want an "enterprise solutions powerhouse"? I'm tempted to abbreviate "enterprise solutions powerhouse" to ESP but that might cause confusion for many of us wondering whether we might need ESP to be able to predict whether Dell's big deal will be a success.