Pat Gelsinger speaks with Michael Dell on stage at VMWorld 2016. Credit: Brandon Butler
When Dell announced the $67 billion debt-financed takeover of VMware parent company EMC in October, the news sent shockwaves across the EMC portfolio of companies, including internally at VMware, and with customers and partners.
"When the deal was announced, everybody was surprised, shocked," VMware CEO Pat Gelsinger said in a pre-VMWorld interview with Network World. "It was a big, big deal and those questions were internal as well as with customers and partners... As I described it, everybody had the deer in the headlights response."
Gelsinger's comments are some of the intimate descriptions of the impact the deal has had on the companies involved. Dell's takeover of EMC is still pending; EMC is the majority shareholder of VMware.
Within a month to 45 days after the news was announced, Gelsiger said there was a major transition in thinking, both internally and externally. By late November Gelsinger said, "shock and concern had emerged into optimism and confidence."
The turbulence at VMware was reflected in the company's stock price, which dropped by almost one-third in October 2015. Since then the stock rebounded and so too have company revenues and earnings. Gelsinger says he's optimistic on many fronts now about VMware being a part of the Dell family. Advantages include:
-Geographic spread: Gelsinger says VMware will be able to tap into Dell's global reach, allowing VMware to more easily sell into smaller and midsize parts of international markets
-Vertical segment penetration: Gelsinger noted Dell's strength in the 'SLED' markets of state and local governments and education departments. VMware can cross-sell in to those.
-Introduce Dell's PC customers to VMware's mobility management products: Gelsinger hopes to cross sell Dell PC customers with software from VMware's AirWatch division for managing upgrades of Windows 10 devices.
Gelsinger says customers specifically should have confidence in the deal, saying that Dell's backing amounts to "turbochargers" on VMware's back.
For Gelsinger, knowing that VMware will be a part of Dell brings increased stability to the company too. "For VMware now, our future is assured," Gelsinger noted. "We are confident about the position, the stature, the role, the growth, the balance sheet, the structure of the company for the long term."
Some partners may still be concerned though. While Gelsinger assured partners that VMware will not unduly favor Dell over others in the market, but in fact there are already deeper integrations being developed between technologies from each of the companies. Gelsinger will be managing this balancing act of integrating between Dell and VMware while also remaining committed to working with other VMware partners.
Source: Network World
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