VMware CEO Pat Gelsinger: "Through this period, the Federation structure is the best one for both customers as well as for the companies and employees themselves.”
Will the EMC Federation break up, as a flurry of recent reports have suggested? VMware CEO Pat Gelsinger, for one, believes one of the most prominent alliances of companies in the technology industry is still the best management structure.
“My view on this hasn’t changed,” Gelsinger told Network World in a wide-ranging interview. “Being bigger and more strategic as a whole is a more powerful position for the companies and we believe that, through this period, the Federation structure is the best one for both customers as well as for the companies and employees themselves.”
The so-called Federation includes the venerable EMC storage division, the virtualization company VMware, as well as security business RSA, converged infrastructure provider VCE and application development company Pivotal.
Pressure for change
Much of the pressure for a change stems from investor group Elliott Management taking interest in the subject more than a year ago. After Elliott’s initial investment in the company, reports surfaced that the investment outfit had urged EMC to break off VMware from the Federation. In a truce, EMC appointed a couple Elliott-backed investors to its board, but VMware has remained part of the Federation.
Earlier this year there were rumors of a potential merger between EMC and HP. Then, throughout the summer there have been reports of various shakeup scenarios, including EMC buying out the remaining stake that it owns of VMware (EMC holds a super-majority of VMware’s publicly-traded stock). There were even reports that VMware could buy out parent company EMC.
In the background of all these rumors have been questions about when longtime EMC CEO Joe Tucci plans to retire.
Gelsinger deflected comment on the possibility of VMware buying out EMC, which could elevate him to head up the Federation.
“Such rumors are interesting to read in the press but obviously these are EMC board decisions,” said Gelsinger, who has been at the helm for VMware for 3 years. “They have the votes at that level so it’s not a question that I can even address at that point in time.”
In the interview, Gelsinger did discuss the advantages of VMware being affiliated with the other EMC companies. He says customers have the ability to buy a complete range of products – from storage to virtualization, cloud, security and converged infrastructure within the federation – or engage with the companies on an a la carte basis.
Shakeups across the Federation
As rumors continue to swirl about what will happen, there have been a series of changes to executive leaders at companies within the federation. Most recently, Paul Maritz ceded the CEO role at Pivotal to former executive vice president Robert Mee. Maritz, who is the former VMware CEO, still serves as executive chairman of Pivotal.
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