Solution providers are cheering the news that Dell Technologies is eyeing the full acquisition of VMware, saying it would rev up the VMware innovation engine and lead to tighter integration between the two companies' product portfolios.
VMware shares soared 10 percent, or $13.34, Friday to $151.31 on reports that Dell Technologies is considering strategic options that include a full buyout of the virtualization market leader.
"VMware is a jewel. It's one of those staples that are out there. It would put Dell in full control of that portion of the OS," said Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla., solution provider that partners with Dell. "We would probably see bigger innovations that would be tightened mainly to Dell hardware. I can see if you're not a Dell partner it might rub you the wrong way, but it gives Dell a better position of having more insight into those operating systems and hardware designs."
Dell's board of directors is scheduled to meet later this month to discuss the options including filing for an IPO or completing a full buyout of VMware, according to Bloomberg.
Solution providers said bringing VMware private would enable the company to be even more of a technology disrupter.
Michael Tanenhaus, CEO of Mavenspire, an Annapolis, Md.-based solution provider and Dell EMC channel partner, said since VMware is a tracking stock and public company, it has to disclose financial numbers as well as product road map plans for investors.
"If Dell could take VMware private as well, one big upside would be they could stop reporting numbers altogether and they could stop reporting the plans for VMware. So Dell could start doing some big things, some big innovation with VMware without having to worry about reporting everything to everyone," said Tanenhaus.
However, Tanenhaus did say acquiring VMware and taking the company private would be a "gamble."
"It's a gamble because on one hand, it's an amazing set of intellectual property. On the other hand, some of the power of VMware is that it's used everywhere," said Tanenhaus. "They've gone through a lot of trouble so far to keep it independent, so that would be a big change."
Round Rock, Texas-based Dell Technologies owns a majority stake in VMware after buying EMC for $67 billion in 2016. EMC owned 81 percent of VMware when it was acquired, with Dell gaining all the shares of VMware common stock previously owned by EMC.
VMware currently has a market cap of $61 billion. VMware is a tracking stock whose shares have increased by well over 60 percent over the past 12 months.
Michael Hadley, CEO of Boston-based iCorps Technologies, who partners with VMware and Dell, said acquiring VMware would also give the company better control on how they compete with Microsoft. The two companies compete against each other in the virtualization market, including hypervisors, where VMware competes against Microsoft's Hyper-V.
Dell is also considering a public share sale for its Pivotal Software Inc. cloud computing venture, according to Bloomberg. Dell met with bankers last year to discuss a potential Pivotal IPO and was told the company was valued at $5 billion to $7 billion, according to Bloomberg.