Dell Inc’s $67 billion acquisition of EMC Corp. will create the world’s largest “privately-controlled, integrated technology company,” the two tech giants said upon announcing the deal this morning. No doubt that’s music to the ears of the bankers financing the deal, but industry analysts are skeptical if the deal will benefit anyone else.

For $67 billion, Dell gets to acquire the entirety of EMC, including its 80 percent stake in VMware Inc., although the virtualization firm will continue to be publicly traded and operate as a separate entity.

The other details will see Pivotal Software Inc. continue to operate as is, with EMC’s core storage business staying put at its Hopkinton, MA. headquarters.

On the face of it, the deal looks like a good one for the parties involved, explained Wikibon analyst Stu Miniman, and that includes Elliott Management Inc., the $27 billion activist hedge fund that forced EMC to seek a deal in the first place. “Elliott wanted VMware spun off but this is not going to be happening,” Miniman noted. “But even so, this should push stock to $33, so while it doesn’t meet Elliott’s original demands, it does give them return on the investment.”

As if on cue, barely two hours after Dell and EMC’s announcement, Elliott issued its own short statement, saying “Elliott strongly supports this deal. As large stockholders, we have enjoyed a productive and collaborative dialogue with Joe Tucci and EMC’s Board and management. We are confident that this Board has worked tirelessly to evaluate all paths for the company and that today’s transaction represents the best outcome for stockholders.”

EMC’s current CEO and president Joe Tucci also comes out a winner, Miniman argued, even if being gobbled up wasn’t exactly the way he imagined himself bowing out. EMC gets a tidy cash premium and also saves face by not crumbling in the face of Elliott’s demands.

“Tucci can retire having given the Federation a more stable future,” Miniman explained.

Nevertheless, Tucci was less than ebullient during a conference call this morning announcing the deal, citing a “unprecedented” change and the need to “create a new company for a new era.”

“Tucci sounds defeated,” said Wikibon Chief Analyst David Vellante as he monitored the call. “It did not sound like this was the way he wanted it to end. He was the most un-animated I’ve ever heard.” 

For Michael Dell, the deal presents the opportunity to transform the company he founded in his dorm room 31 years ago into the leading provider of IT infrastructure. “This creates a world-leading company,” Dell told The New York Times. “We’re continuing to evolve the company into the most relevant areas where IT is moving. This deal just accelerates that.”

The question is whether that market is all that attractive anymore. With legacy hardware vendors struggling for growth or exiting the public markets for the safety of private ownership, many people are questioning whether the IT infrastructure market is devolving into a scramble for bigger and bigger pieces of a shrinking pie.

“I see no advantage in having 40% share of a declining hard-disk-drive market,” summed up Wikibon co-founder David Floyer. He foresees future cost-cutting in EMC’s core business as Dell seeks to wring out whatever profits are left. “I foresee the EMC storage fleet being treated as cash cows, with major thinning of the sailors, lowering of sailor grog rations, and little investment in the ships,” he said. 

A full-stack vendor

The acquisition sounds even more transformative in light of what Dell will become. Once the deal concludes, Dell will overnight transform into a colossal enterprise tech beast that’s able to offer an almost complete IT stack: storage and servers; market-leading virtualization with VMware; converged infrastructure through VCE; hybrid cloud; security; and Big Data thanks to EMC’s stake in Pivotal.

It all sounds wonderful on paper, but the reality is the two companies will have their work cut out if they’re to successfully combine their wares in an integrated way and continue to reap revenues from a declining market, said Wikibon’s principal analyst Dave Vellante during a lively CrowdChat debate.

According to him, the deal is the result of much more powerful forces at work:

“These are hard times in hardware, pricing is in a slow motion decline thanks to open-source and the cloud and the ‘digital matrix’ is winning,’ Vellante said in a CrowdChat. “By ‘digital matrix’, I mean the nature of the industry competition is changing, with those companies that leverage digital infrastructure – cloud, mobile, security, transactions – leading the transformation”.

Neither Dell nor EMC has made much headway in this digital matrix. As Peter Cohen in Forbes noted in his own somewhat cynical analysis of the deal, both companies are leaders in making products that were wildly popular fifteen years ago but are now slowly dying. Enterprises are abandoning on-premise, legacy hardware in favor of cheaper and more compelling cloud-based alternatives. While Dell’s partnership with hyper-converged platform maker Nutanix, Inc. and EMC’s acquisition of next-generation flash technology companies like DSSD Inc. and XtremIO Inc., as well as cloud provider Virtustream Inc., have bought a place at the table with these new technologies, neither Dell nor EMC is dominant in any new markets.

The question is then, can the soon-to-be-combined Dell/EMC entity do any better?

For Wikibon’s Vellante, the big question is whether Michael Dell will be more aggressive with VMware than EMC was. “If he wanted to, he could crush it in storage by driving massive investment in software-defined and letting VMware drive the agenda,” Vellante said.

Then again, Dell could choose to do the opposite and be even less aggressive than what EMC was in the name of better managing the new company’s cash flow and paying down its huge debt. “If he was more aggressive, the conundrum is he’d cream the competition, and that includes EMC,” Vellante pointed out.

One thing is clear: The combined entity can achieve major cost efficiencies, and EMC is likely to bear the brung of the cuts. “Massachusetts will be a ghost town and real estate in 495 belt will be hit hard,” said SiliconANGLE co-founder John Furrier, raising the specter of Compaq Computer Corp.’s 2002 acquisition and dismantling of Digital Equipment Inc.

Michael Dell joined David Vellante on theCUBE at Dell World 2014 last November. Watch the interview below (15:30).