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Dell-VMware Spin-Off Deal: The 4 Biggest Myths And Rumors

CRN breaks down the four biggest myths surrounding Dell Technologies’ future with VMware with Dell’s upcoming spin-off of its 81 percent stake in VMware.

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Michael Dell Won’t Have A Say In VMware’s Future

Michael Dell is the current chairman of the board at VMware and has been Dell’s longstanding chairman as well. Following the completion of the spin-off, Michael Dell will still be chairman of both VMware and Dell Technologies.

Although VMware will technically become a standalone company from Dell Technologies, Michael Dell will still hold some power as chairman and the largest VMware stakeholder. Additionally, VMware will continue to leverage several of Dell’s beneficial programs such as its capital arm, Dell Financial Services, for funding. Furthermore, VMware currently does not have a leader following the departure of former CEO Pat Gelsinger who left to lead Intel.

Michael Dell became VMware’s chairman following Dell’s blockbuster acquisition of EMC in 2016 for $67 billion, the largest IT merger in history.

“When Dell and EMC merged, they certainly consolidated a lot of legacy, but VMware gave them a really strong software foundation with which to build all products, especially all of the emerging products,” said Zeus Kerravala, principal analyst at ZK Research. “The reason why they were so successful in hyperconverged, for example, which led them to be the world leader, was they were able to stay in lock-step with VMware which is the No. 1 application running on HCI. He’s really used all the assets within the portfolio to create economic value. … As a CEO who’s responsible for driving shareholder value, which includes his own, you have to give him an A-plus [in the spin-off deal]. There’s no other grade to give him.”

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