Dell is Considering a Sale To VMware in What May Be Tech's Biggest Deal Ever (cnbc.com)

CNBC reports: Dell Technologies could emerge as a public company through a reverse-merger with VMware, the $60 billion cloud computing company it already controls, according to people familiar with the matter. The reverse merger, whereby VMware would actually buy the larger Dell, would then allow Dell to be traded publicly without going through a formal listing. It would also likely be the biggest deal in tech industry history, giving investors who backed Dell's move to go private in 2013 a way to monetize their deal, while helping Dell pay down some of its approximately $50 billion debt.

Comments

So Dells service will get even worse?

[greenwow]

Never thought that could happen, but here we are.

Corporate Raiders

[Anonymous Coward]

Right out of the Corporate Raiders playbook. Buy a company, bleed
it dry, make it borrow (hence the 50 billion debt), and dump it, in this
case to the public.

Re:I only have one question

[Rob Riggs]

Is this more or less a game on paper to get an infusion of cash for Dell, or could this actually have an effect on the VMWare business where I should be prepared for a chance of VMWare dying off?

If you are a shareholder in VMware, you're about to be screwed. If you think Dell will hang like an albatross around VMware's neck and you are a VMware customer, you're screwed. If you are an investor in Dell, your are about to spread the cost of your fuck-up on the public market, and specifically on VMware's other shareholders. (See stories hitting the wire that look like "VMware plunges on news...)

Not for your bonuses

[rsilvergun]

odds are those were planned well in advance (I suppose it's possible you're a C level employee, in which case bully for you). I haven't heard a peep about wage increases except from Walmart, and aside from Fox News all the analysts agree those wage increases were because the economy's recovered enough they have to pay more to keep workers, nothing to do with the tax cuts.

Meanwhile the mergers and acquisitions are putting everybody's jobs at risk. After all, what's the first thing a company does after a M&A?

Re:I only have one question

[swb]

Who can tell?

Dell has mostly re-branded themselves as DellEMC, which I think was supposed to be an upgrade for the Dell name to associate it with the EMC brand. That being said, I always thought buying EMC was just a gimmick to get VMware but in my exposure it sure seems like EMC won internally, and the Dell people were shoved aside.

Overall, I don't understand their conflicting strategy. If you talk to a "Dell EMC" rep for more than 5 minutes, they will try to sell you their 3x overpriced EMC vxRail platform which is VMware vSAN on top of proprietary mini-blade chasis of like 4 nodes.

The strange part of the whole hyperconverged storage/virtualization model coming out of DellEMC is that EMC is a major SAN vendor selling against its own brand/products, made worse by ALSO selling Nutanix which directly competes against VMware vSAN *and* the SAN business.

I think the company is so big and has so much overlap they need to reconsider what they're doing and greatly trim product lines. I can't help but think VMware innovation is totally choked by being owned by a giant hardware company -- any innovative ideas that don't involve selling more and more expensive hardware will die on the vine. The hardware side can't adapt to emerging software defined storage unless its meant to boost VMware first. And of course everybody has to bow to EMC's giant portfolio lest someone mess with their accounts.

I would have thought the smarter play for Dell would have been to have kept VMware as a wholly owned subsidiary but let it self-manage (even if self-managing didn't mean coding for Dell's proprietary platform) and then sell off EMC. EMC seems like the dinosaur whose market can't really ever grow that much because the products are too expensive for anything but Fortune 500.

Re:Why get rid of a money maker?

[jellomizer]

Because it allows the company to put more money in resources that make more money.
Lets say you have a Lemonade stand.
That sold Lemonade, and Cookies.
Every glass of Lemonade makes a profit of $0.50
Every cookie makes a profit of $0.25

You find that Customers will buy a glass of Lemonade or a Cookie but rarely both.
So lets say on average you make $75.00 a day on that one stand.

Now your line at your stand is very long, so there are people leaving the line or just not waiting.
You need to have an other stand, but you do not have the money to make a new stand and man it.
So you sell your cookie recipe and rights to it for the cost of making a new stand plus some extra for an other employee.

So now you can sell twice as much Lemonade as before, even at the expense of not having cookie sales. You end up with more money.
Because you will now make $100.00 a day for each stand, with 2 stands you make $200.00 a day.

So by selling off a profitable item and reinvesting its money, you now have 2.5 times the profit.