[Isa Soares:] Markets edge higher, and the winning streak continues on Wall Street this Monday, the 12th of October. Tonight, a $67 billion gamble. Dell seals the biggest tech deal in history. Plus, Christine Lagarde tells us difficult times may be ahead. And a price for tackling poverty. I'll speak to the winner of the Nobel Prize for Economics 2015. I'm Isa Soares, and like Richard, I too mean business. A very good evening to you. Tonight, Dell is getting itself an upgrade. The PC manufacturer has agreed to buy corporate data storage firm EMC. It is the biggest tech deal of all time, and it's worth $67 billion. By linking up with EMC, Dell is transforming itself from a PC and server maker to an IT service provider and will get its hands on EMC's 80 percent stake in VMware. And VMware's software helps companies use their servers, basically, more efficiently. EMC also owns security firm RSA and Pivotal, which specializes in data analysis and Cloud computing. Well Dell, it seems, is not alone in refocusing on the enterprise markets. HP, IBM, and Cisco, they've all made similar moves. They're all facing pressure from Cloud providers, as you well know, like Amazon, Microsoft, and Google, as companies move to the Cloud rather than building their own data centers. Well, let's put all of this into perspective. Joining me now is our business correspondent Samuel Burke. And Sam, before we talk about the significance of this deal, let's talk a bit about EMC. What exactly do they do? Because to be honest, many people have never heard of them.
[Samuel Burke, Cnn Business Correspondent:] So many people. All you really need to know about this deal is that a big name came in with some really big money
[Soares:] Yes.
[Burke:] and is getting big data. It's all about the big data, and if you just break it up into four different parts, that really shows what EMC is. So, on the one hand, you have data storage, Cloud computing, that's what we all call it. So, storing, whether it's emails, files. Then you have security software, and you know I'm doing reports on hacking almost every day, it feels like. So, security software brings in a lot of money these days. Then you have virtualization software. Don't think about virtual reality. It's not that. It's all the things that you used to do in real life, like meeting with face-to-face with people, making that all through conference calls, video conference calls. And then data analysis. If you're storing all this data, if you're tracking all this data, a company like EMC has to do the analysis of it. Those are the four major parts that Dell is getting in this gigantic deal.
[Soares:] But looking at this, looking at the breakdown, if this deal's approved, Samuel, this looks very different from the Dell that you and I know, that you and I grew up with. But really, what it shows is Dell has no choice but to move because sales computer sales they're down, aren't they?
[Burke:] This is going to be a completely different company. Just before we came on set, you and I were looking at the numbers for the market share when it comes to personal computers. Dell has just over 10 percent. Completely different from how they started. But let's just go back a little bit so we can figure out how we got here. Back in 1984, Michael Dell founds the Dell company. At that time, he's a student at the University of Texas at Austin, so he's trying to make a computer that can really compete with the IBMs that are the king of their time. Then in 1996, Dell begins selling computers via a website. That was revolutionary for its time. And eventually become very big with commercials like these.
[Unidentified Male:] Getting a Dell is so easy. All you've got to do is call or go online, and the Dell folks will help you build the computer that's right for you. Yes, a Dell desktop for $799 or Notebook for $1149. Well, don't just sit there. At these prices, you can get a Dell with what you find right here. Dude, you're getting a Dell.
[Burke:] Isa, I remember thinking how cool that guy was, and he could order a computer right from his couch using a computer. I remember for the first time buying a laptop over a website and you could customize it. But let's just get back to that timeline. In the year 2000, that's really when Dell peaked. It had a peak share price of $51. But then, you remember, the tech burst the tech bubble burst, and then by 2013, Dell goes private just under $14 a share.
[Soares:] What is quite a corporate career, isn't it, right there? I've got a quote, though, from an analyst that really struck me. He says "Dell wants to become the old IBM corp" you mention it there "one-stop shop for corporate clients. That model fell apart a couple of decades ago. Reviving it would be a stunning coup for Dell." I mean, it's a lot of money, so does this make strategic sense here?
[Burke:] Well, it's a huge amount of money, but they paid and yes, they paid a premium for the stock, but only 28 percent more than the market cap last week. Listen, Michael Dell built a very strong company. He knows the way it is right now, it cannot stay that way. He has to change gears, and so this is the way he sees to do it, and many other companies are doing it as well. So, yes, there's a lot of competition, but I don't think there was any other way to go for a company like Dell to stay in the technology industry.
[Soares:] Absolutely. It just has to evolve at this stage, doesn't it? Samuel Burke, thanks very much, Samuel. Now, after meeting with leaders from around the globe in Lima, Christine Lagarde tells Richard her biggest concerns about the global economy. You'll want to hear them after the break.