Hard times for VMware. Your current CEO, Pat Gelsinger, is leaving the company after being hired by Intel to take over the reins of the company. News that comes a few weeks after VMware decided report, even through the courts, your CTO for going to the most direct competition, Nutanix.
Not only that: Dell has until September this year to decide whether to ditch VMware or not. A possibility that, as confirmed in july, is valuing.
A split that gains strength
In fact, some analysts believe that this possible sale could be accelerated with the departure of the CEO of VMWare. According to JP Morgan, “good progress” is being made in the negotiation of this spin off. JP Morgan analyst Paul Coster adds that negotiating a special dividend and trade agreement future between both companies.
These commercial agreements would bring benefits for the two companies, including commercialization agreements, services, research and development and intellectual property.
It should be remembered that it was in 2004 that EMC bought VMware. But in 2015 Dell took control of EMC and the virtualization company passed into the hands of the hardware manufacturer. However, reports began to surface in June of last year that Dell Technologies had a proposal to spin off its stake in VMware. Under this proposal, Michael Dell would hold 42% of VMware shares and private equity Silver Lake would retain about 11%.
This spin-off would give Dell two benefits. On the one hand, obtain a significant injection of capital by selling the shares it holds in VMware. But on the other hand, it would remain a preferred partner of VMware for the combined sale of virtualization hardware and software.
However, for the RBC analyst Robert Muller, Gelsinger’s departure may add some more (albeit manageable) hurdle to this Dell VMWare exit. It should be remembered that Gelsinger was one of those who was in favor of VMWare gaining independence from Dell. In your opinion, that would give the company more freedom to work with other manufacturers, such as HP.
For now, neither Dell nor VMWare have wanted to make assessments about it. VMware is still looking for a new CEO. Your position on a possible exit from Dell may be a deciding factor in this deal.
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