After Dell Spin-Out, VMware CEO Turns to Cloud Partnerships and Mergers & Acquisitions


By Stephen Nellis

Nov. 1 (Reuters) – Newly independent VMware Inc will seek deeper deals with cloud providers and consider “large-scale” acquisitions that could help the company grow, the company told Reuters on general manager Raghu Raghuram.

VMware completed its spin-off from Dell Technologies Inc, which owned 81% of the Palo Alto, Calif., Software company, on Monday to become a separate publicly traded company worth around $ 64 billion.

Founded in 1998, VMware has led a major change in the way large enterprises use their data centers with technology that allows data center owners to break down physical computers into “virtual” machines that can be quickly scaled up or down. for the task at hand to get more work done. VMware has become a mainstay of enterprise data centers.

But as large companies began to move IT work to cloud providers like Amazon Web Services from Amazon.com, some analysts predicted that VMware’s usefulness would decline.

Instead, many large enterprises choose to use a combination of their own data centers and one or more cloud providers, which has prompted several cloud providers to partner with VMware for better access to its customers.

Raghuram has now said that VMware is not under Dell’s umbrella, he wants to aggressively pursue more of these deals.

“It really allows us to come out and be the Switzerland of the industry,” he said.

VMware will also look to use its stocks as currency to buy other companies to add technology to its offerings.

“We are no longer a controlled entity. This allows us to use equity capital to conduct large-scale transactions afterwards,” he said. “Small hot startups or large companies with reasonable value – that gives us access to the full spectrum. “

As part of the spin-off, Dell and other shareholders will receive a special dividend of about $ 27.40 per share, or about $ 11.5 billion, which Dell said it plans to use to help pay off the debt. (Reporting by Stephen Nellis in San Francsico; editing by Richard Pullin)


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