Both Dell and HPE are trying to navigate a rapidly changing business environment, where enterprises are increasingly running their workloads in cloud environments run by the likes of Amazon Web Services, Microsoft and Google rather than on servers in their own data centers. At the same time, those hyperscale cloud service providers are buying lower-cost systems in their massive data centers, and many of those systems are low-cost white-box servers built by original design manufacturers (ODMs) rather than top-tier system makers like Dell and HPE.
However, there are stark differences between how Dell and HP are pursuing their goals. Dell officials have steadfastly argued that the PC business is a critical part of their larger IT enterprise efforts, while HP split the company in two to help separate the enterprise IT and PC businesses. In addition, Dell is looking to grow larger, as evidenced by its $62 billion bid to buy data storage leader EMC.
However, Dell also is shedding businesses to help reduce the huge debt the company will take on once the EMC deal closes, a debt that could be as much as $50 billion. Dell officials last month said they were selling the company's Software Group to private equity firms Francisco Partners and Elliott Management.
In March, Dell sold the services business it inherited when it bought Perot Systems for $3.9 billion in 2009. NTT Data bought Dell's service business for $3.05 billion.