VMware Acquiring EMC? VMware CEO Pat Gelsinger Tries To Squash Speculation
VMware's Pat Gelsinger appears to be finally putting to rest any talk about his company's acquiring parent company EMC in a downstream merger.
Gelsinger, speaking at Monday's VMware analyst day presentation -- which was closed to the media -- told analysts that such a deal was not a "serious consideration," and that he did not recommend such an action, according to a Boston Globe report.
Gelsinger also told analysts that he supports the EMC Federation, the Boston Globe reported.
[Related: Analysts: Why An HP Acquisition Of EMC Would Work]
The news follows reports early last month that VMware is contemplating a downstream merger with EMC. In such a downstream merger, VMware would acquire parent company EMC.
EMC is also reportedly considering an acquisition of VMware, as several news organizations have reported.
Gelsinger in mid-August said in a meeting with Calcalist, a daily Israel-based business publication, that VMware has no plan to acquire EMC. His comments at VMware's analysts' day seems to make his intentions more clear.
Storage king EMC, which owns about 80 percent of VMware, is under pressure from investors to break up its EMC Federation, which includes EMC Information Infrastructure, VMware, Pivotal, RSA and VCE.
EMC is also reportedly a potential acquisition target of Hewlett Packard Enterprise, the enterprise portion of Hewlett-Packard after that company splits in two this fall.
Daniel Ives, a research analyst at FBR Capital Markets who was at VMware's analyst day event, on Tuesday wrote in a research note that VMware management's comments dismissing the logic of a potential downstream merger with EMC was the highlight of the presentation.
"We believe the concept of a downstream merger with EMC has been unsettling for VMware investors and has weighed on the stock since several media reports (including Bloomberg) started to circulate over the past few weeks," Ives wrote.
A VMware acquisition of EMC will not likely happen, said Jamie Shepard, regional and health systems senior vice president at Lumenate, a Dallas-based solution provider and longtime partner to both companies.
"A downstream merger is just someone saying it might happen," Shepard told CRN. "With HP and others in the game of who might buy EMC, such a merger wouldn't make sense. It would be VMware going to market with its own storage."
VMware would find having a storage business difficult because of the huge, multi-vendor storage ecosystem that has built up around its virtualization and cloud technology, Shepard said.
"Look around at VMworld [underway this week in San Francisco]," he said. "It's now the largest storage conference in the world."
PUBLISHED SEPT. 1, 2015