take a hike
gets my vote
With Joe Tucci, EMC head honcho, set to retire on February next year, the very last thing he wanted was an attack by one of the biggest, baddest activist investors of all: Paul Singer’s Elliott Management. Elliott has communicated to EMC that it has a $1bn investment in its shares and would like VMware spun off so that EMC …
The issue here is that his strategy of buying unconnected companies and then connecting them doesn't add nearly enough value. He also bought VMWare fairly early, and it's grown a lot in value since then. What he wants to use it for, aside from making money selling hypervisors, is to increase EMC storage sales.
That's like buying a small plot of land in a city, building a corner store, and then refusing to sell to someone that wants to bulldoze the block to build a skyscraper.
VMWare would be much better leverage for some other, non-storage company. Some of them would be able to make serious improvements in their markets with the ability to dictate the features that come out in the next version of ESX, whereas EMC only gets a very small boost from better integration with their storage arrays.
Amazon could use it to allow VMotions between their cloud and client gear, which would probably greatly increase cloud uptake. Microsoft could add it to their virtualization portfolio and stop worrying about competition in that market. Heck, even Dell or Cisco would get a bigger bump in sales by owning VMWare than EMC does, I'd think. You actually run VMWare on equipment they make, and VSAN isn't threatening to make intel servers obsolete, like it is the VNX.
If Tucci is more worried about his legacy than making himself (and his company's owners) money, he'll fight this tooth and nail. If, however, he actually does his job and tries to build value for the people that now own the company he build and sold them, he'll consider this spinoff. He wasn't wrong, he just isn't as right as the people who want it.
>You actually run VMWare on equipment they make, and
>VSAN isn't threatening to make intel servers obsolete,
>like it is the VNX.
Taking a page out of the Kodak Book of Strategy?
"We invented digital photography. OMFG...bury it, bury it! It'll eat our film business!"
Faced with emerging technologies like VSAN that could make your core product obsolete, you'd advocate selling the new technology so you can stick with what will become obsolete?
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