Why HP Should Buy EMC

Looking at the recent Dell (DELL) purchase in the virtualization world I suddenly realized that the possibility of a Hewlett-Packard (HPQ) - EMC (EMC) merger would be a great idea.

HP will buy EMC. Why? Because Dell bought one of EMC's competitors. HP is the new gorilla in the server arena. The sales of desktops are falling. Everyone wants a laptop for portability and to keep in touch on the internet while the world gets its act together on the gPhone (GOOG) and iPhone (AAPL) for internet access.

The newest area for internet access in Japan is the cellphone. Who cares you ask? You should. These newer internet iPhones, gPhones, laptops or whatever cell phones will access the internet but all your "stuff" will be saved on a virtual hard drive on the internet server provided by HP and virtualization via EMC/VMW - now do you understand?

Laptop hard drives and cellphone storage are woefully small compared to what is needed for data and video files, etc etc. On them, internet storage will be unlimited. In the next 5 years the internet enabled cell phone will be the primary device for internet access.

HP and EMC would be the perfect fit. The recent downturn in the market provides the perfect opportunity for a merger and a reduced aquisition cost.

Disclosure: Author has a long position in some of the above-mentioned securities.