SO THEY WENT ahead and did it. The biggest single technology merger so far. Hardware manufacturer Dell has coughed up $67bn for database giant EMC.
But what to make of these unlikely bedfellows? Two underperforming companies in totally different parts of the technology ecosystem. One best known for computers that offices buy in bulk, and then your dad buys because he uses them at work, the other dealing in data centres, databases and all things back room.
So why bring them together? In fact, it's the perfect example of the rearrangement that is going on in the tech sector right now.
Software use is growing. Hardware use is shrinking. It doesn't make hardware unprofitable, but it does mean that tech companies have to decide what they are, hardware or software, to make things as cost effective, and therefore as profitable, as possible.
IBM, for example, has made a effort to concentrate on software, or more specifically the cloud, by divesting its x86 server division to Lenovo. Sure, the firm still has its Power processor-based servers, but they are part and parcel of a package based around cloud products.
Meanwhile, Lenovo has taken on IBM x86 while at the same time bolstering its mobile hardware with the acquisition of Motorola. It makes a lot of sense for a Chinese company to specialise in hardware. Which is exactly what it's done.
Because that's the new paradigm now: find what you're good at, stick to it and stop trying to take over the world.
Microsoft is a good example of a company that didn't get the memo. Its purchase of Nokia for $7.2bn as it attempted to straddle the mobile hardware market as well as software ended in massive layoffs and writing off $7.6bn as the experiment failed.
The Lumia range still exists and new additions arrived last week, but Windows Phone hasn't managed to pierce three percent in terms of market share.
So back to our strange bedfellows. What can Dell and EMC offer each other? Well, the whole is greater than the sum of its parts. Both are recognised names with something to prove. We can expect to see a lot of layoffs as the combined company streamlines duplications in its back office.
Victor Basta, managing partner at analyst firm Magister Advisors, said: “This is the largest ever pure-play technology deal, but it is not about technology. It is about industrial concentration rather than transformation, which says a great deal about soaring valuations in the tech industry.
"You would expect a $67bn deal to shift the plate tectonics of the industry, but this is far from that."
In essence, like the previous record holder for biggest, fattest, hairiest deal, which saw component maker Avago merge with chipmaker Broadcom for $37bn last month, this is all about extending your brand with synergy. Technology is too big to do it all, and the best way to grow is with your own kind and to divest your irrelevances.
Oh, and of course strip the assets of anything useful but irrelevant and float it off. In the case of Google selling Motorola, all the interesting research ideas like Project Ara have been moved to Google X, which is now a subsidiary of Alphabet.
In the case of Dell/EMC, the profitable VMware software subsidiary is not included in the deal and will continue to work separately, with the new expanded Dell taking stock of the company to keep it at arm's length - after all, you don't divest the bit making money.
For balance, we must mention the decision by HP to split itself in two, which will take effect on 1 November. It's slightly different in this case, as one company is consumer facing and the other business focused. HP continues to be the top manufacturer of consumer PCs and laptops, but in a declining market.
So what we're seeing is a recognition that technology is just too big for one company. Google cheated and split itself with a holding company. But for the mid-market, it seems the thing to do is to find a direction and stick to it.
Dell already knows that trying to break into mobile doesn't work. The firm may have invented the phablet a year early with the 5in Streak, but ultimately its saturation into that market is tiny. Have you ever met anyone with a Dell mobile phone? I doubt it.
Basta added: “Dell had three options: go headlong into mobile to address the flight from the desktop, do a transformative software deal, or do what they’ve done, which is to buy what is essentially a commodity business. The other choices - mobile and software - would have been reckless and unaffordable in turn.
"Microsoft’s acquisition of Nokia and the wreckage of BlackBerry are instructive on the risks of mobile, and quality, proven software assets are simply unaffordable even at this price, especially for a private equity backed firm."
We can expect to see a lot more deals like this. The big corporations will fragment and eventually we'll see several key players in each sub-section of the tech industry. Of course, that's when the 'strategic alliances' will start, and in better times the whole cycle will start again. µ
Firm offers refund for 'impossible' glitch
And it'll undercut Apple HomePod when it comes to price
Report claims there will be a five-month wait following MWC unveiling
Welcome to the dystopia Black Mirror warned us about