In a surprising move today announced its earnings call that VMware with EMC to form a joint venture under the name Virtustream that EMC is the company bought last spring for $1.2 billion.The road came against the dramatic backdrop background announcement last week that Dell was the acquisition of EMC for $67 billion.You see,EMC owns 80 percent of VMware.To make matters worse,VMware is marketed as an independent company,and the newly formed Virtustream be two companies owned 50/50.It is even more difficult because Virtustream financial results will be consolidated in the states of VMware Q1 2016.Got that? To summarize: Dell EMC purchase.EMC owns most of VMware.VMware is a company listed separately.VMware and EMC have combined financial Virtustream Virtustream but will become a part of VMware.
Now that we have sorted out the financial details of why they are doing this now? If you look at the root of Dell’s offer,it comes down to this, companies recognize the market potential of hybrid cloud. For those of you in the jargon is not the hybrid cloud when companies a combination of local software infrastructure and cloud.In practice, this may mean receiving some services in the AWS cloud, but are still running Dell servers and EMC storage within their data centers (or any combination of suppliers ).Today,most large companies are in this way works.Only companies that are born in the last five years is likely to be all in,in the cloud at this point,and some of them might have some local mail service.
To The Future
EMC and VMware at their core represent the old guard. They are solidly on-premises datacenter companies, but like all companies they see where the industry is moving. They see the growing power of AWS and all of the services it offers,and the two companies are looking for a way to stay relevant in this changing market.The hybrid cloud seems to be the perfect strategy for them because it gives them a chance to play in the datacenter where they are most comfortable, yet continue to make that shift to the cloud where they both know they have to go.
Dell,which has to have a say in this at this point, has to be on-board with this approach, and when (if) the deal closes,this should play into Dell’s own strategy to become a significant player in the hybrid cloud market.Keep in mind,however,that they aren’t the only traditional player out there trying this approach.IBM,in spite of its poor earnings yesterday (maybe because of them),has a strategy firmly focused on helping those large companies who are struggling to move to the cloud.
The hybrid strategy comes into its own advice as well as its approach to cloud all over the field around for the bluemix SoftLayer infrastructure for developers and a portfolio of more than a hundred SaaS services.IBM bought many of these pieces,and so far the strategy has slowly fruit despite the highly publicized deals with Apple and Twitter others.HP, Cisco,Oracle to carry all of them are trying to adopt a similar approach and growth for an entire cloud,but also fight the types of benefits they have what has been used in the past to see.
It’s the same kind of challenge that is likely to Dell-EMC advance face.Large companies tend to move slowly,and perhaps the thought that a smaller offshoot is offer some agility set definitely missing.Other confusing questions is exactly what Dell financed this acquisition VMware.Having totaling $40 billion to do,it is likely they will see,to throw some things,and as I wrote,sale of pieces of VMware Action would be a good way to make some of that investment back in a hurry.
In any case,this announcement is what has been agreed to a difficult start,and makes it even more complicated.I think it is his to the lawyers and accountants,all this to sort out.For now Virtustream is a joint venture newly founded two companies a legitimate property of the Cloud,customers can speak to how they are trying to make the transition to a future cloud.If the deal happen with Dell,so that there is the same Dell.