Dell's efforts to refresh its PC lineup as users do more computing at home have paid off, while the pandemic-fueled recession has reduced corporate demand for data center hardware.

A key part of the negotiations will center on a commercial agreement between Dell and VMware that would formalize aspects of its current working relationship.

Dell surged 12% following a report that it was mulling a spinoff of its 81% stake in VMware.

The company attributed the drop to customers spending more on “remote work and business continuity solutions” rather than server farms.

"Our job is to prudently manage our business so that we’re in a strong position on the other side of this situation.”

The tech giant is offloading an asset that has had trouble competing with more modern rivals such as Okta.

A Secureworks takeover would be a departure from Dell’s earlier plan to sell its stake in the company, sources told Bloomberg.

The move signals that geopolitical and trade tensions have dented corporate demand for servers.

HPE, Dell, Cisco report slowing hardware sales amid uncertainty caused by trade disputes among other tensions.

The company hopes the sale could fetch at least $1 billion, sources who asked not to be identified said.