Look guys, the options are pretty limited. If VMware can't leave the EMC Federation and the Federation somehow has to upvalue itself for investors and find shares priced high enough to pay off Elliott Management, then one bit of the Federation has to buy the rest or the Federation has to be acquired/merged with a white knight.
An analyst community rumor says EMC is thinking of shopping itself to its subsidiary, VMware, and white knight possibilities of Chuck Robbins' Cisco and Meg Whitman's Hewlett-Packard Enterprise are both non-runners.
So that leaves EMC buying VMware or VMware buying EMC. We'll rule out Pivotal and Virtustream buying the Federation because they are not publicly quoted and are minnows compared to EMC and VMware.
Either way, we get a single quoted EMC/VMware vehicle called EMC or VMware. With EMC already owning 80 per cent of Vmware, it's hard to see why, in either the medium or the longterm once operational savings have been made, newEMC would be given a significantly higher share-price by investors. Not much would have changed fundamentally, on the good ship EMC, apart from the deck chair arrangement and signage.
OK, let's look at newVMware owning the whole lot. Again, nothing fundamental gets changed once OPEX savings are made, assuming that newVMware maintains the existing Federation structure and has a VMware product business running alongside the EMCii, Pivotal and Virtustream ones.
EMC chair and overall CEO Joe Tucci would retire. We could see then David Goulden being the chairman, Pat Gelsinger overall CEO, and Paul Maritz and Rodney Rogers running Pivotal and Virtustream as before. EMC II could be run by having CJ Desai, Brian Gallagher or Guy Churchward stepping into the CEO spot vacated by David Goulden.
How would this “VMware Federation” structure be any different in practice from the EMC Federation we have now? Again, I'm arguing that VMware changing from an 80 per cent-owned subsidiary to formally owning EMC doesn't actually make that much difference product and strategy-wise, unless other things change.
