Rumors of a mega-merger between storage giant EMC Corp., and rival firms Dell Inc., and Hewlett-Packard Company, have emerged in this morning’s Wall Street Journal.

Citing its usual “people familiar with the matter,” the WSJ says EMC is under enormous pressure from activist shareholders who think the company would be worth more broken up and concerns about the imminent retirement of longtime CEO Joseph Tucci. EMC officials have been involved in separate talks with both Dell and HP, though the WSJ says there’s little chance a deal will actually be struck with either company.

The Journal said a Dell takeover of EMC is unlikely. However, Dell might be willing to take some of EMC’s core assets off its hands, such as its storage business. Even so, that’s probably unlikely given the disparity in size between Dell and EMC, and the fact that Dell probably doesn’t have as much ‘buying power’ as it did before it went private. There’s also the problem of sorting out the two companies’ products, which overlap in some areas. For example, Dell’s Compellent and EqualLogic storage arrays compete with EMC’s VNX line.

More likely is a possible “merger of equals” between EMC and HP, claims the WSJ. The two firms were reportedly in talks for close to a year, only to have discussions break down a few weeks ago over fears shareholders would reject the deal and disagreement over the financial terms.

Why EMC would be interested in a merger with either company wasn’t immediately clear in the WSJ’s report, although HP’s performance in recent months has been encouraging. In its latest financial results (Q3), HP beat analyst’s expectations to record revenues of $27.6 billion, while its share price has also steadily been increasing over the last 12 months (see below). HP has also witnessed growth in networking, where leader Cisco Systems Inc., saw a decline, while HP Services was recently described as a “bright spot” by analysts.

But that doesn’t really explain what’s in the deal for HP. Its storage organization is unlikely to relish the prospect of taking on EMC’s people and products, and EMC’s VNX and VMAX arrays compete with HP’s 3PAR products. In addition, HP’s various object, backup and virtual SAN products all overlap with equivalents from EMC.

“The question is why anyone would want EMC gear at all,” said Jon Toigo of IT consultancy Toigo Partners. “With VMware and Microsoft pushing server-side direct attached storage topologies to replace centralized SAN storage, I think of the monolithic storage products of EMC as niche players in a shrinking market.”

EMC’s trials and tribulations began last July, when hedge fund Elliott Management picked up a stake in the company and reportedly began pushing CEO Joe Tucci to sell off VMware Inc., saying it would boost the value of both assets.

EMC owns about 80 percent of VMware, having bought the company for $700 million back in 2004. VMware accounted for about 22 percent of EMC’s revenue of $23.2 billion in 2013.

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