Dell further ties itself to VMware
One of the recurring intrigues surrounding the Dell-EMC deal revolves around the fate of VMware.
VMware, the virtualization software tool that powers the cloud by making it possible for multiple operating systems and functions to run on the same virtualized computer, was widely viewed as the crown jewel of Dell’s acquisition of EMC last year. While VMware is based in Palo Alto, Calif., it has major operations in Cambridge and Burlington.
Questions were asked whether Dell could manage the debt it took on in acquiring EMC.
Initial reports set the price at $67 billion, but Dell now says it was just over $58 billion. Either way, a good portion of the funding was borrowed.
Selling off VMware – at its current market cap of about $34 billion – would certainly change the math, but so too would losing VMware’s future potential contributions.
VMware still functions as its own publicly traded company, as it did under EMC, but it is now majority-owned by Dell Technologies. And unlike other parts of Dell’s new empire, VMware is growing at 10 percent a year.
No cards were shown at the Las Vegas conference. Or were they?
From the stage, announcements included integration of VMware’s Air Watch and the Dell Client Command Suite; a new Dell EMC VDI holistic desktop virtualization system is powered by VMware Horizon; and there’s the VMware NSX network virtualization and security platform with the Pivotal Cloud Foundry platform.
Any future buyer of VMware would be deeply involved as a Dell EMC client.
And then there were the two deals – one announced just before the event and one just after – involving VMware buying startups, clearly signaling it plans to keep accelerating its growth.
WBJ Web Partners
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