Silicon Investor - VMware, Inc. (VMW)

[Glenn Petersen] Broadcom plans to close $69 billion VMWare deal on Wednesday Reuters November 2...

Glenn Petersen — 11/21/2023 9:02:08 PM

Broadcom plans to close $69 billion VMWare deal on Wednesday

Reuters
November 21, 20239:59 AM CST
Updated 10 hours ago

Nov 21 (Reuters) - Broadcom (AVGO.O) said it planned to close its $69 billion acquisition of cloud computing firm VMWare (VMW.N) on Wednesday, wrapping up one of the biggest takeover deals in the technology industry that was closely scrutinized by regulators globally.

The chipmaker has now received all regulatory approvals for the purchase after China approved the acquisition with additional restrictive conditions earlier on Tuesday, it said.

VMWare server software should work with local hardware and the deal should not restrict customers from purchasing and using Broadcom's hardware products such as storage adapters, the Chinese regulator said in a statement.

Some investors in the companies had feared about the outcome of the deal after reports said last month that rising Sino-U.S. tensions could lead China's regulator to scuttle the deal.

Tensions between Beijing and Washington had mounted after the Biden administration introduced tougher controls on exports of high-end chips to China in October.

Broadcom shares were down more than 1%, while VMware was down 4.6%. The deal was previously expected to close by Nov. 26.

Brokerage Bernstein attributed the share moves to some technical impacts from arbitrage trades around the deal.

Reporting by Zaheer Kachwala and Harshita Mary Varghese in Bengaluru and Twinnie Siu in Hong Kong; Editing by Anil D'Silva and Shounak Dasgupta\

Broadcom plans to close $69 billion VMWare deal on Wednesday | Reuters

[Glenn Petersen] VMware — Shares climbed 5.2% before the open Monday after Broadcom said it rece...

Glenn Petersen — 8/21/2023 8:45:22 AM

VMware — Shares climbed 5.2% before the open Monday after Broadcom said it received final transaction approval from the United Kingdom’s Competition and Markets Authority for an acquisition of the cloud computing company. Broadcom expects other required regulatory approvals before Oct. 30. Broadcom was 0.9% higher in the premarket.

[Glenn Petersen] Broadcom's $61 bln VMware deal wins conditional EU antitrust OK By Foo Yun Che...

Glenn Petersen — 7/12/2023 7:42:51 AM

Broadcom's $61 bln VMware deal wins conditional EU antitrust OK

By Foo Yun Chee

Reuters
July 12, 20235:09 AM CDT
Updated an hour ago

BRUSSELS, July 12 (Reuters) - U.S. chipmaker Broadcom (AVGO.O) secured EU antitrust approval on Wednesday for its $61 billion proposed acquisition of cloud computing firm VMware (VMW.N) after offering remedies to help rival Marvell Technology (MRVL.O).

The deal, Broadcom's largest ever, will help the chipmaker diversify into enterprise software.

Broadcom offered Marvell and other rivals interoperability commitments related to its Fibre Channel Host-Bus Adapters (FC HBAs), a kind of storage adapters, the European Commission said, confirming a Reuters story last month.

Marvell and other rivals will have "guaranteed access to the interoperability Application Programming Interfaces as well as to the materials, tools and technical support necessary for the development and certification of third-party FC HBAs", the EU competition enforcer said.

Marvell and other rivals will also have guaranteed access to the source code for all of Broadcom's current and future FC HBA drivers through an irrevocable open source license.

"The commitments offered by Broadcom will enable its only rival Marvell, to continue competing on equal footing and ensure a similar protection for any future entrants," EU antitrust chief Margrethe Vestager said in a statement.

The U.S. Federal Trade Commission and the UK competition agency are also examining the deal.

"We continue to make progress with our various regulatory filings around the world, having received legal merger clearance in Australia, Brazil, Canada, the European Union, South Africa, and Taiwan, and foreign investment control clearance in all necessary jurisdictions," Broadcom said in a statement.

Reporting by Foo Yun Chee; editing by Jason Neley

Broadcom's $61 bln VMware deal wins conditional EU antitrust OK | Reuters

[Glenn Petersen] Broadcom’s $69bn VMware deal set for lengthy EU antitrust investigation Brussel...

Glenn Petersen — 6/23/2022 1:22:43 PM

Broadcom’s $69bn VMware deal set for lengthy EU antitrust investigation

Brussels competition regulators plan detailed probe in move that will delay acquisition

Financial Times
June 23, 2022

Broadcom’s $69bn acquisition of cloud software company VMware is set for a lengthy antitrust investigation in Brussels over regulatory concerns that the deal will harm competition across the global technology industry.

Broadcom is already in preliminary discussions with EU officials who will be looking into worries that the merger may lead to abusive behaviour, including potential future price rises by the US chipmaker, three people with direct knowledge of the transaction said.

Many large acquisitions receive similar interrogation, known in EU circles as a “phase 1” investigation, which typically takes a few months to complete.

But those close to the situation suggest that EU authorities plan to push forward with a more detailed “phase 2” investigation, which could take well over a year and may ultimately derail the deal altogether. Nvidia eventually walked away from a proposed $66bn purchase of chip designer Arm after being subject to a lengthy EU antitrust probe.

Broadcom did not immediately respond to requests for comment.

The company’s acquisition of VMware is among the largest in the history of the technology industry, second only to Microsoft’s proposed $75bn purchase of games maker Activision Blizzard.

Opponents of the deal, which include some existing VMware clients, have written to the EU to argue VMware’s customers could in future be tied into buying Broadcom services.

They point to two recent transactions led by Broadcom, its $18.9bn takeover of CA Technologies in 2018 and its $10.7bn deal to buy Symantec’s enterprise security business a year later as recent examples of how the US chipmaker risks undermining competition. In both deals, they claimed, Broadcom raised prices.

These concerns are being aired before senior EU officials, including competition chief Margrethe Vestager, even though Broadcom is unlikely to formally file the acquisition for review by antitrust authorities until after the summer break, according to people with knowledge of the process.

Further regulatory scrutiny is expected to come from the US, while the UK and China could still launch probes.

The chipmaker has already fought cases against the European Commission for alleged anti-competitive practices. In October 2020, Brussels accepted commitments by the US group to ensure competition in the chipset market for modems.

Broadcom has emerged as one of the largest chipmakers in the world on the back of a roll-up spree led by Hock Tan, its deal-hungry chief executive for more than a decade.

The Malaysian-American executive was blocked from further consolidating the semiconductor industry in 2019. The Federal Trade Commission accused Broadcom of being a monopolist in the sector.

The regulatory attack led Tan to shift his buying attention to software and cloud services companies, a move that aims to turn Broadcom into a broader tech conglomerate.

Last November, the FTC prohibited Broadcom from asking for customers to buy bundles, called “exclusivity” or “loyalty” agreements, in its sale of semiconductors for internet devices. It also prohibited Broadcom from “retaliating against customers for doing business with Broadcom’s competitors”.

“The regulators are going to take a hard look at [the VMware deal] just because this is Broadcom and a large tech transaction,” said Andy Li, a senior analyst at research firm CreditSights.

Broadcom will push back on these fears, according to people close to the company, by arguing that it is not a merger between competitors so will not lead to increased market power. It will also argue the deal is unlikely to raise prices or undermine the quality of the service or have any negative impact on innovation.

Broadcom will also dismiss any comparison to Nvidia’s failed acquisition of Arm, where Nvidia’s competitors were dependent on licensing arrangements for Arm’s chips.

But trade associations, representing hundreds of companies that are clients of VMware, including France’s Cigref, sent a letter this week to regulators in Brussels asking them to act pre-emptively to block the deal due to concerns over anti-competitive practices.

Additional reporting by Harriet Agnew in London and Richard Waters in San Francisco

https://www.ft.com/content/efc1e0b7-93a8-4189-a503-368193d3fb20

[Glenn Petersen] Dell had a great first quarter: Dell Stock: Computer Maker Smashes Targets | In...

Glenn Petersen — 5/28/2022 3:43:09 AM

Dell had a great first quarter:

Dell Stock: Computer Maker Smashes Targets | Investor's Business Daily (investors.com)

[Sr K] Related, and related to golf and the seasonal WGC Match Play sponsored by Dell T...

Sr K — 5/27/2022 10:49:54 PM

Related, and related to golf and the seasonal WGC Match Play sponsored by Dell Technologies, DELL was up 12.9% today. (Checking)

[Glenn Petersen] Chipmaker Broadcom to buy cloud services firm VMware in $61 bln deal Reuters M...

Glenn Petersen — 5/26/2022 8:01:41 AM

Chipmaker Broadcom to buy cloud services firm VMware in $61 bln deal

Reuters

May 26 (Reuters) - Chipmaker Broadcom Inc (AVGO.O) is buying cloud services provider VMware Inc (VMW.N) in a cash-and-stock deal valued at $61 billion to speed up its expansion into the enterprise software business.

The purchase announced on Thursday is the second-biggest globally so far in 2022, after Microsoft Corp's (MSFT.O) $68.7 billion buyout of video game maker Activision Blizzard Inc (ATVI.O).

VMware shareholders will get $142.50 per share under the purchase, resulting in a premium of nearly 49% to the stock's close on May 22, when talks of the deal were first reported. Broadcom will assume $8 billion of VMware net debt, the company said.

Broadcom shares were up 1.6% in premarket trading, while VMWare fell nearly 1%.

Broadcom Chief Executive Officer Hock Tan had said the company is seeing that enterprise spending is "on fire". Buying VMware would give Broadcom access to the software firm's cloud clients and their data centers, and will help it capitalize on this trend further.

Software became a substantial part of Broadcom's business after it acquired CA Technologies for $18.9 billion in 2018 and Symantec's security division for $10.7 billion in 2019. read more

The bid to buy VMware is Broadcom's second-biggest takeover attempt, after its failed attempt to buy smartphone chip behemoth Qualcomm Inc for more than $100 billion in 2018.

Reporting by Chavi Mehta in Bengaluru; Editing by Shounak Dasgupta and Aditya Soni

Chipmaker Broadcom to buy cloud services firm VMware in $61 bln deal | Reuters

[Glenn Petersen] Broadcom in Talks to Pay About $60 Billion for VMware The two companies are aim...

Glenn Petersen — 5/24/2022 4:34:14 AM

Broadcom in Talks to Pay About $60 Billion for VMware

The two companies are aiming to announce the cash-and-stock deal Thursday

By Cara Lombard and Dana Cimilluca
Wall Street Journal
Updated May 23, 2022 5:19 pm ET

Broadcom Inc. AVGO -3.10%? is in talks to pay around $60 billion for VMware Inc., VMW 24.78%? people familiar with the matter said, in what would be one of the biggest takeover deals of the year.

The two technology companies are aiming to announce a cash-and-stock deal worth about $140 a share on Thursday, assuming the talks don’t fall apart, the people said. The price wasn’t yet set and could still move around, some of the people cautioned.

To help pay for the deal, Broadcom plans to tap a handful of banks for a roughly $40 billion debt package, one of the people said.

The VMware discussions, together with Elon Musk’s agreement late last month to buy Twitter Inc. for $44 billion, show that despite market volatility, major deals are still doable. That’s in part because market declines have made acquisition targets more affordable and because sellers in some cases are more willing to accept stock as currency, in the hopes that they will benefit when it rebounds. Private-equity firms, meanwhile, remain flush with cash.

Still, the volume of mergers and acquisitions is down from the brisk pace of last year. Companies in the U.S. have struck $789.5 billion of mergers so far this year, down 31% from the same period in 2021, as market swings and broader economic uncertainty give many deal makers pause. IPO activity, meanwhile, has come to a virtual standstill as would-be public companies wait for calmer waters.

Microsoft Corp.’s pending acquisition of videogame heavyweight Activision Blizzard Inc. for roughly $75 billion currently registers as the biggest takeover of this year.

VMware’s shares closed up nearly 25% at $119.49 on Monday on news of the talks. The shares got a late boost when The Wall Street Journal reported the expected price, giving the company a market value of over $50 billion. Shares of Broadcom, a semiconductor-software conglomerate, closed down roughly 3%, giving it a market value of around $215 billion.

A price of $140 a share would represent a premium of nearly 50% to where VMware closed Friday, but is still well below the high of more than $200 the stock reached in the spring of 2019.

The deal discussions, which picked up pace in recent days, come roughly six months after computing pioneer Dell Technologies Inc. spun off its 81% equity stake in VMware. The software company has a strong position in the market for “hybrid” cloud, where large companies mix public cloud services like those of Amazon.com Inc. and Microsoft with their own private networks.

Dell founder Michael Dell remains chairman of VMware. He and private-equity firm Silver Lake, which helped take Dell private in 2013, together control a more-than-50% stake in VMware. That gives them significant influence over the VMware’s decisions and potentially puts them at odds with other shareholders, the company has warned in its securities filings.

Broadcom, a semiconductor powerhouse built largely through acquisitions, has been on the hunt for a deal to beef up its presence in the corporate-software market. It came close to buying software company SAS Institute Inc. last year before the closely held company’s founders had a change of heart. Its first big foray into software was its roughly $19 billion acquisition of CA Technologies in 2018.

The demand for cloud computing, which enables customers to rent computing horsepower rather than invest in their own, has exploded in recent years. Startups and other businesses that couldn’t support in-house IT departments were among the earliest cloud adopters, but now companies across nearly every industry rely on it.

VMware is roughly a year into a new regime after company veteran Raghu Raghuram took over the role of chief executive when Pat Gelsinger departed to run Intel Corp.

VMware is set to report earnings Thursday, while Broadcom reports next week.
Write to Cara Lombardo at cara.lombardo@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

Appeared in the May 24, 2022, print edition as 'Broadcom Offers $60 Billion As It Pushes to Buy VMware'.

Broadcom in Talks to Pay About $60 Billion for VMware - WSJ

[Glenn Petersen] VMW is up approximately 21% in premarket trading this morning. Even if the poten...

Glenn Petersen — 5/23/2022 7:31:39 AM

VMW is up approximately 21% in premarket trading this morning. Even if the potential Broadcom deal does not occur, VMW is probably in play. Obviously, Michael Dell wants to monetize his 40%+ interest.

[Sr K] Broadcom in Advanced Talks to Buy VMware The tech companies are discussing a ca...

Sr K — 5/23/2022 12:14:35 AM

Broadcom in Advanced Talks to Buy VMware

The tech companies are discussing a cash-and-stock deal that could come soon

Broadcom has been on the hunt for a deal to beef up its presence in the corporate-software market.PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

By Cara Lombardo

Updated May 22, 2022 9:25 pm ET

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Broadcom is in advanced talks to buy VMwareaccording to people familiar with the matter, setting the stage for what would be one of the year’s biggest deals.

The technology companies are discussing a cash-and-stock deal that could come soon, assuming the talks don’t fall apart, the people said. VMware has a market value of $40 billion, while Broadcom’s is around $222 billion.

Exc.

[Glenn Petersen] Broadcom in talks to buy VMware By Greg Roumeliotis Reuters May 22, 2022 May ...

Glenn Petersen — 5/22/2022 8:15:09 PM

Broadcom in talks to buy VMware

By Greg Roumeliotis
Reuters
May 22, 2022

May 22 (Reuters) - Chipmaker Broadcom Inc (AVGO.O) is in talks to acquire cloud service provider VMware Inc (VMW.N), people familiar with the matter told Reuters.

Negotiations between Broadcom and VMware are ongoing and a deal is not imminent, the sources said. The deal terms under discussion could not be learned.

The acquisition would further diversify Broadcom’s business away from semiconductors and into enterprise software, following its $18.9 billion acquisition of CA Technologies and its $10.7 billion purchase of Symantec Corp’s security division in the last four years.

Bloomberg News first reported the deal late on Sunday. Broadcom and VMware did not immediately respond to Reuters' requests for comment. As of Friday's market close, the market capitalization of VMware was $40.3 billion.

Michael Dell is VMware’s biggest investor with a 40% stake as a result of Dell Technologies Inc (DELL.N)having spun out VMWare to its shareholders last year, according to Refinitiv data.\

Private equity firm Silver Lake, which has previously invested in Broadcom, is VMware’s second largest shareholder with a 10% stake, Refinitiv data shows.

Reporting by Greg Roumeliotis in New York and Shivam Patel in Bengaluru; Editing by Christian Schmollinger, Tom Hogue and Chris Reese

Broadcom in talks to buy VMware | Reuters

[Glenn Petersen] That would value his VMW stake at approximately $20 billion.

Glenn Petersen — 3/26/2022 1:15:17 PM

[Sr K] Thanks to the miracles of his financial engineering, he will own 52% of Dell and...

Sr K — 3/26/2022 12:34:06 PM

Thanks to the miracles of his financial engineering, he will own 52% of Dell and a 42% stake in VMware. The total value of his Dell holdings is $40 billion. “It is incredible how much of the company Michael now owns,” says a fawning Marc Benioff.Aug 3, 2021

[Glenn Petersen] VMware is finally independent. Dell Technologies Announces Distribution Ratio f...

Glenn Petersen — 11/1/2021 4:50:59 AM

VMware is finally independent.

Dell Technologies Announces Distribution Ratio for VMware Spin-Off Special Dividend

Fri, October 29, 2021, 8:50 PM·6 min read

ROUND ROCK, Texas, Oct. 29, 2021 /PRNewswire/ -- Dell Technologies (NYSE: DELL) announces the final distribution ratio for the special dividend of its shares of VMware, Inc. Class A common stock and Class B common stock to Dell Technologies stockholders is .440626. Accordingly, Dell Technologies stockholders will receive .440626 of a share of VMware Class A common stock for each share of Dell Technologies common stock held as of 5:00 p.m. ET on October 29, 2021. Each share of VMware Class B common stock will be converted into one share of VMware Class A common stock in connection with the distribution and prior to the receipt by Dell Technologies' stockholders of such shares. Dell Technologies stockholders will receive cash in lieu of any fractional shares of VMware Class A common stock.

The distribution is expected to be completed on November 1, 2021, following the satisfaction of certain closing conditions.

Information about the foregoing matters and other information can be found in the company's current report on Form 8-K furnished to the Securities and Exchange Commission.

<snip>

Dell Technologies Announces Distribution Ratio for VMware Spin-Off Special Dividend (yahoo.com)

[Glenn Petersen] VMW is on track to become independent by the end of July. VMware reports solid ...

Glenn Petersen — 8/26/2021 7:18:45 PM

VMW is on track to become independent by the end of July.

VMware reports solid Q2 results with subscription and SaaS sales up 23%

The virtualization company published results slightly ahead of expectations, with strong growth in multi-cloud and modern applications businesses, along with End-User Computing.

By Stephanie Condon for Between the Lines |
ZDNet
August 26, 2021 -- 20:33 GMT (13:33 PDT) | Topic: Virtualization

VMware on Thursday published second quarter financial results that came in slightly ahead of market expectations.

The results, CFO Zane Rowe said in a statement, reflect strong year-over-year product bookings growth in major categories. That includes VMware's multi-cloud and modern applications businesses, along with End-User Computing.

The company's non-GAAP net income for the second quarter was $739 million, or $1.75 per diluted share. Revenue in Q2 was $3.14 billion, an increase of 9% from the second quarter of fiscal 2021.

Mware,Analysts were expecting earnings of $1.64 per share on revenue of $3.1 billion.

"Our customers are evolving their strategies from a 'cloud first' to a 'cloud smart' philosophy where they are picking the right clouds and cloud services for the right workload, and turning to a multi-cloud environment," CEO Raghu Raghuram said in a statement. "We are delivering the multi-cloud platform for all applications, enabling the digital innovation and enterprise control that our customers need to accelerate their businesses today and in the future."

Raghuram took the helm as VMware's new chief executive on June 1, six months after Pat Gelsinger's departure to Intel. Prior to that, Raghuram was chief operating officer of products and cloud services for VMware.

Meanwhile, VMware and parent company Dell Technologies are in the process of splitting into two independent companies. The long rumored spin-off was formally announced by Dell Technologies in April, and it's on track to be completed by November.

Breaking down the Q2 results, services revenue came to $1.62 billion, while license revenue was $738 million.

Subscription and SaaS revenue came to $776 million, an increase of 23% year-over-year. Subscription and SaaS annual recurring revenue (ARR) for the second quarter was $3.15 billion, an increase of 26% year-over-year.

Subscription and SaaS accounted for 24.7% of total revenue.

Non-GAAP operating income for the second quarter was $924 million, a decrease of 3% from a year prior.

Operating cash flow in Q2 was $864 million. Free cash flow was $777 million.

For the third quarter, VMware expects revenue of $3.12 billion.

VMware reports solid Q2 results with subscription and SaaS sales up 23% | ZDNet

[Glenn Petersen] Dell jumps as it unveils VMware stock spinoff plan PUBLISHED WED, APR 14 20214:...

Glenn Petersen — 4/14/2021 5:38:56 PM

Dell jumps as it unveils VMware stock spinoff plan

PUBLISHED WED, APR 14 20214:41 PM EDT
UPDATED WED, APR 14 20215:12 PM EDT
Jordan Novet @JORDANNOVET
CNBC.com

KEY POINTS

-- Dell will proceed with a plan to spin off shares of VMware in a deal that should happen in the fourth quarter.

-- Dell shares rose as much as 9% in extended trading on Wednesday after the company announced its plan.The move should help Dell pay down debt.

-- VMware has been somewhat constrained by Dell’s ownership to work with outside partners.
Dell shares rose as much as 9% in extended trading on Wednesday after the company announced its plan to proceed with the spinoff of its 81% ownership of enterprise software maker VMware. The deal should close in the fourth quarter of 2021.

The move isn’t a surprise. Dell is moving forward with a process it has long considered as a means of paying down its debt.

VMware will collectively distribute a cash dividend worth $11.5 billion to $12 billion to shareholders, including Dell, Dell said in a statement. Dell will receive $9.3 billion to $9.7 billion, which will position it well for investment grade ratings, the company said. Dell currently has a BB+ credit rating from S&P Global, giving the company a speculative grade, according to S&P Capital IQ.

When the deal closes, Dell shareholders will receive 0.44 shares of VMware stock for each Dell share, although the ratio could vary. VMware stock will take on a single-class structure after the deal as VMware class B shares become class A shares. Dell and VMware will continue a commercial relationship.

“We felt like this was beneficial for our shareholders because it eliminates a dual-class share structure, and it allows us to operate in broadened ecosystem,” VMware Chief Financial Officer Zane Rowe said in an interview.

Last year, Dell said it was considering a spinoff and that any deal would not happen before September 2021. CNBC reported last year that Silver Lake and other Dell shareholders supported the idea, partly for tax reasons.

Dell took on considerable debt through its 2016 acquisition of data storage hardware maker EMC, which acquired VMware in 2004 and later floated a small stake in the company in an initial public offering.

“After a comprehensive review of potential strategic options, both parties determined that this transaction will simplify capital structures and create additional long-term enterprise value,” Dell said.

Pat Gelsinger, who had continued to run VMware through the Dell acquisition, in February left VMware to run Intel, where he had formerly been a top executive. VMware shares moved 1% higher after Wednesday’s announcement.

VMware has been somewhat constrained to work with other companies due to Dell’s large ownership. Operating as an independent company will give VMware “more opportunities to have more partnerships with different companies,” Rowe said.

Story Link

[OldAIMGuy] I've noticed VM Ware is starting to do Network TV advertising. I don't think I'd...

OldAIMGuy — 6/26/2020 11:18:41 AM

I've noticed VM Ware is starting to do Network TV advertising. I don't think I'd seen any such ads up until this last week.

It can't hurt awareness.

[Glenn Petersen] Dell and VMware’s strained marriage may finally be coming an end, and shareholde...

Glenn Petersen — 6/26/2020 11:05:34 AM

Dell and VMware’s strained marriage may finally be coming an end, and shareholders are cheering

Published Fri, Jun 26 202010:26 AM EDT

Alex Sherman @sherman4949
CNBC.com

Key Points

-- Dell has hired financial advisers to look into a variety of options for its 81% stake in VMware, and shareholders support a 2021 spinoff, according to people familiar with the matter.

-- Dell, burdened by a heavy debt load and strained U.S.-China trade relations, has struggled as a public company since returning to the market in 2018

-- Several of Dell’s largest shareholders, including Silver Lake and Elliott Management, are said to favor a VMware spinoff.

Michael Dell speaking at the 2019 WEF in Davos, Switzerland on Jan. 23rd, 2019.
Adam Galica | CNBC
----------------------------------

Dell and VMware have never been a perfect match. Now, some of Dell’s largest shareholders are hoping they split apart.

The two tech companies are, once again, working with financial advisers to determine the future of their unusual entanglement. Dell, which owns 81% of VMware, plans to explore a variety of strategic options, including a tax-free spinoff of those shares to Dell shareholders in late 2021, according to people familiar with the matter. Dell prefers that route to selling its stake so that it can avoid a multibillion-dollar tax hit, said the people, who asked not to be named because the discussions are private.

Dell shares, which have badly lagged behind the broader market, jumped more than 8% on Wednesday after the Wall Street Journal first reported on the renewed discussions. VMware climbed 2.4%.

The messy entanglement has infuriated many investors for years. Dell obtained its large stake in the virtualization software company through its acquisition of EMC for more than $60 billion in 2016. The rest of VMware has been owned by public shareholders since 2007, when EMC floated about 19% of the stock in an IPO.

Dell then returned to the public market in 2018 through a complicated reverse merger with a now defunct tracking stock that mirrored VMware’s performance within Dell. Its shares are since up 15% (thanks largely to Wednesday’s rally), trailing the S&P 500's 25% gain.

VMware, meanwhile, is down over that stretch, even though it has stronger margins and higher growth than the Dell and EMC businesses. Dell’s computer and server products, along with the EMC storage unit, have been hurt by a broad shift in computing to the cloud and the ongoing U.S.-China trade war, which has increased the costs for hardware components.

“The Dell ownership structure has been an albatross around the VMware story and ultimately causes the stock to trade at a discount, a dynamic that would be removed if Dell (and its Board) ultimately decided to head down this (spin-off) path,” wrote Daniel Ives, an analyst at Wedbush Securities, in a note to clients.

A spinoff in September 2021 is the most logical move by Dell, said three people familiar with the matter. Talks are in their early stages and it’s possible that the parties decide not to pursue a transaction, the people said.

Large shareholder approval

Several of Dell’s largest shareholders, including private-equity firm Silver Lake and hedge fund Elliott Management (whose 5.9% ownership in Dell is passive) favor spinning out VMware in September 2021, given the tax efficiencies and simplification to the capital structure, the people said.

Spokespeople at Silver Lake, Elliott, Dell and VMware declined to comment.

One possibility if a spinoff takes place is that VMware could pay Dell a large special dividend by taking on added debt and helping Dell reduce its heavy debt load, two of the people said. A similar transaction occurred in 2018, when VMware agreed to pay Dell a special one-time dividend of $11 billion in conjunction with taking Dell public.

Dell currently has about $45 billion in net debt, while VMware’s debt sits at only $3 billion. S&P Global, Moody’s and Fitch all rate Dell’s corporate credit quality as below investment grade. Dell could achieve investment grade status if it moves forward with the spinoff and associated dividend, two of the people said.

For VMware investors, the appeal of a breakup lies in the opportunity to finally operate entirely outside of the Dell-EMC empire, where the business has been stuck for 17 years.

VMware has a market value of more than $62 billion, valuing Dell’s 81% stake at about $50 billion. Yet Dell’s market value is only about $38 billion, for a company that generates more than $92 billion in annual revenue. That means all of Dell, excluding VMware, is valued at negative $12 billion.

Given the strained relationship with China, Dell’s financial picture isn’t likely to improve anytime soon.

“From a margin perspective, I would tell you that, look, part of this is going to depend upon what happens with the component costs as we go through the year and what the pricing environment and demand environment looks like,” Dell CFO Tom Sweet said on the company’s first-quarter earnings conference call last month. “Right now, we see the component cost environment as inflationary as we step through the rest of the year.”

While Dell has long coveted owning all of VMware, buying the remainder of the company is unlikely, four people said. The premium required to purchase the shares would most likely require Dell to take on even more debt. And keeping VMware’s stock independent is important to VMware employees, who want their equity incentives to be tied to a growth story.

Working in favor of an amicable outcome is the positive relationship between Michael Dell and VMware management, including CEO Pat Gelsinger, and their shared incentives — the Dell founder is the VMware’s chairman and top shareholder. While there were tensions between EMC and VMware regarding strategic direction, Dell has supported certain VMware decisions even if they present a challenge for his company. For example, he favored VMware’s partnership with Amazon Web Services, according to a person familiar with the matter.

In 2018, after CNBC’s Jon Fortt suggested on Twitter that Gelsinger would be a good replacement for Intel CEO Brian Krzanich, Gelsinger responded that he was happy running VMware. Michael Dell chimed in a half-hour later, expressing support for Gelsinger, with an animated plaque reading, “You’re the best.”

Still, there are significant cultural differences between the companies. VMware, headquartered in Palo Alto, California, has needed to pay top dollar for talent to compete with other cloud-computing companies, while Dell, based in Texas, has a reputation for paying low salaries, three people said.

Another person said that when Michael Dell toured VMware’s Silicon Valley for the first time after the EMC acquisition, he compared the facility to Disneyland for adults. Dell noted that was eventually going to change.

A clean separation of the companies could clean up cultural differences while keeping Michael Dell as its largest individual shareholder.

— CNBC’s Jordan Novet contributed to this report.

cnbc.com

[Glenn Petersen] If Dell does decide to spin off VMware, it looks like nothing will actually happ...

Glenn Petersen — 6/24/2020 9:44:26 AM

If Dell does decide to spin off VMware, it looks like nothing will actually happen until September 2021.

Any such move is unlikely before next year. Dell can’t spin off its VMware stake tax-free until September 2021, or roughly five years after the PC maker combined with EMC Corp., because of a rule requiring both companies involved in a spinoff to have operated continuously for five years to qualify for such treatment.

I have always felt that VMware would command a significantly higher valuation if it was an independent entity.

[OldAIMGuy] Nice uptick this AM for VMW (on the news, I assume).

OldAIMGuy — 6/24/2020 9:35:09 AM

[Glenn Petersen] Dell Explores Spinoff of $50 Billion Stake in VMware PC maker is saddled with ...

Glenn Petersen — 6/23/2020 5:05:17 PM

Dell Explores Spinoff of $50 Billion Stake in VMware

PC maker is saddled with sluggish shares and heavy debt load

By Cara Lombardo
Wall Street Journal
Updated June 23, 2020 4:29 pm ET

Dell Technologies Inc. DELL 1.49% is examining options including a spinoff for its roughly $50 billion stake in VMware Inc. as the PC maker seeks to boost the value of its shares.

Dell recently kicked off a process to explore the possibility of unloading the stake in the cloud-software giant or taking other steps that could include buying the rest of VMware, according to people familiar with the matter. The companies are working with advisers, these people said.

It is also possible Dell will choose to do nothing. The review is at an early stage and no decision is imminent.

The goal of the review is to address a gap between Dell’s market value of roughly $36 billion and the value of its 81% stake in VMware, which suggests the market is assigning little or no value to Dell’s core PC and data-storage business. Separating the companies could help highlight the value of one or both businesses.

To the frustration of some Dell investors, the company’s stock has barely budged since returning to the public markets in 2018 despite a more than 50% rise in the tech-heavy Nasdaq Composite Index in the same period.

A transaction involving VMware, a major player in the fast-growing market for cloud software, could also be engineered to help Dell whittle down its $48 billion debt load.

Dell has recently organized working groups to explore various possibilities for the VMware stake. The primary option is a spinoff to Dell shareholders of the stake, some of the people said. Dell is assessing various implications of such a move, from corporate governance to capital structure and how the companies would work together following a separation, these people said.

Any such move is unlikely before next year. Dell can’t spin off its VMware stake tax-free until September 2021, or roughly five years after the PC maker combined with EMC Corp., because of a rule requiring both companies involved in a spinoff to have operated continuously for five years to qualify for such treatment.

Dell, founded by Michael Dell in 1984, went private in a 2013 leveraged buyout by Mr. Dell and private-equity firm Silver Lake. They undertook a complex financial move that returned it to the public markets five years later.

Dell shares closed at $48.29 Monday, compared with $45.43 on the first day of trading in late 2018. Dell finance chief Tom Sweet said in a June 15 blog post that the company’s priorities include optimizing its capital structure.

VMware has a strong position in the market for “hybrid” cloud, where large companies mix public cloud services, like those of Amazon.com Inc. AMZN 1.86% and Microsoft Corp., with their own private networks. It has a market value of around $62 billion.

Write to Cara Lombardo at cara.lombardo@wsj.com

wsj.com

[OldAIMGuy] Sold 10% of my VMW position this AM at $155. It raised the cash reserve to an ac...

OldAIMGuy — 5/29/2020 9:59:52 AM

Sold 10% of my VMW position this AM at $155. It raised the cash reserve to an acceptable level after going to zero back in mid March with my last addition. Overall the position is up 23% since starting it at the end of February, 2020. Price/share is up 22% since the start.

OAG Tom

[Glenn Petersen] VMware exceeds $10B in sales in FY 2020 zdnet.com

Glenn Petersen — 2/27/2020 10:38:18 PM

[Glenn Petersen] ‘Kubernetes’ Is the Future of Computing. That’s Bad News for One Stock. By Tae ...

Glenn Petersen — 11/24/2019 11:31:36 AM

‘Kubernetes’ Is the Future of Computing. That’s Bad News for One Stock.

By Tae Kim
Barron's
Updated Nov. 23, 2019 3:53 pm ET / Original Nov. 22, 2019 5:06 pm ET

Get ready to hear a lot more about Kubernetes. The Greek word for helmsman or pilot, Kubernetes is shaping up to be the next big wave in computing.

To understand the trend, let’s start with the changing dynamics of software in the cloud. Cloud apps increasingly run in aptly-named containers. The containers hold an application, its settings, and other related instructions. The trick is that these containers aren’t tied down to one operating system and can run nearly anywhere—across different servers and clouds. It’s how Google manages to scale Gmail and Google Maps across a billion-plus users.

Alphabet’s (ticker: GOOGL) Google long ago developed software called Borg to orchestrate its in-house containers—spinning them up and down as needed. In 2014, the search giant opted to make a version of Borg open source, calling it Kubernetes. Today, the major cloud providers all offer a Kubernetes option to customers.

This past week, more than 12,000 developers and executives gathered in San Diego at the largest annual Kubernetes conference called KubeCon. That’s up from just 550 attendees four years ago.

The conference goers are all looking for ways to take advantage of Kubernetes and its ability to automatically deploy, manage, and scale software workloads in the cloud. Ultimately, Kubernetes is accelerating the transition away from legacy client-server technology by making cloud-native software development faster and better.

Aparna Sinha, the director of product for Kubernetes at Google, notes that Kubernetes is built by the same team that created Borg. “We are quite confident in its ability and how it enables applications to run more reliably, more efficiently, and more affordably,” Sinha says. “Kubernetes has really taken off.”

Gartner says more than 75% of global companies will run containerized applications by 2022, from less than 30% today.

“As enterprises modernize their infrastructure and adopt a hybrid multicloud strategy, we see Kubernetes and containers rapidly emerging as the standard,” Jason McGee, chief technology officer of IBM Cloud Platform, told Barron’s in an email.

Of course, not every business is likely to benefit from a better cloud. VMware (VMW), a pioneer of virtualization software that allows a local server to run multiple workloads, could be the most at risk.

If Kubernetes accelerates the cloud shift, demand for on-premises software and equipment is likely to slow. This puts VMware’s core business at risk; its vSphere offering dominates the market for on-premises server virtualization software.

To be sure, VMware recognizes Kubernetes’ importance and is trying to catch up with the trend. In August, the company said Kubernetes has become “the largest generational shift in enterprise architecture in a decade.” At the time, it announced an agreement to buy Pivotal Software (PVTL) for $2.7 billion, saying it needed to own and control an end-to-end Kubernetes software platform.

But Wall Street analysts estimate that roughly half of VMware’s business still comes from its original virtualization business. The company says in filings that it will be a significant portion of revenue for the foreseeable future.

Google’s Sinha says the majority of companies she talks to are actively re-architecting their on-premises VMware-based workloads to the cloud. Kubernetes “is a huge threat to [VMware’s] business,” Sinha says. She argues that customers don’t get enough agility from their existing server virtualization setups.

As VMware rolls out its own Kubernetes effort, it faces a difficult reality. Each of the major cloud computing vendors— Amazon.com (AMZN), Microsoft (MSFT), and Google—offer their own Kubernetes offerings without any VMware software.

A recent Morgan Stanley survey of chief information officers showed VMware was one of the vendors most likely to lose market share as companies migrate workloads to the cloud over the next three years.

Citing a quiet period before its earnings report on Nov. 26, VMware declined to comment on its competitive positioning and potential pricing pressure.

A spokesperson said via email, “With our intention to acquire Pivotal, VMware will offer a comprehensive Kubernetes-based portfolio to help customers harness the full potential of Kubernetes and successfully build, run, and manage their applications and multicloud Kubernetes clusters.”

VMware shares are up 21% this year, slightly below the S&P 500’s return. The stock trades at 24 times adjusted earnings estimates for the next 12 months, above its five-year average of about 20 times, according to FactSet.

The current premium may be too rich, given the risk to VMware, as its customers transition to a cloud-native world. Analysts expect VMware to generate annual sales growth of nearly 10% in each of the next two years, but that forecast could be difficult to achieve if VMware’s vSphere sales fade.

History is littered with innovative companies that struggle to transition to the next technology. VMware may be making the right bet with Kubernetes, but its success in the new world is far from assured. If growth slows, its valuation multiple is likely to compress, leading to a significantly lower stock price.

barrons.com

[Glenn Petersen] VMware buys Carbon Black and Pivotal, valued together at $4.8 billion Published...

Glenn Petersen — 8/23/2019 9:17:06 AM

VMware buys Carbon Black and Pivotal, valued together at $4.8 billion

Published Thu, Aug 22 2019 4:16 PM EDT
Updated Thu, Aug 22 2019 7:28 PM EDT
Jordan Novet @jordannovet
CNBC.com

VMware is acquiring Carbon Black, a cybersecurity company that went public in 2018, the companies announce as part of VMware's quarterly earnings report.
VMware is also going forward on its plan, disclosed last week, to acquire outstanding class A shares of Pivotal.
Both Pivotal and VMware are majority-owned subsidiaries of Dell.

Software company VMware on Thursday said it's acquiring Carbon Black at an enterprise value of $2.1 billion and Pivotal at an enterprise value of $2.7 billion. The deals are expected to close by the end of January 2020.

Shares of Pivotal were up as much as 8% after the announcement, while VMware shares fell as much as 7%. Carbon Black shares rose as much as 6% after shares were initially halted following the close of the trading session.

These are VMware's largest acquisitions yet. The deals build on VMware's strength helping companies run their software in their own data centers. They could help VMware compete better in the security market and hybrid-cloud infrastructure operations.

VMware isn't talking about cost synergies that could come out of buying two other enterprise-focused companies. However, CEO Pat Gelsinger told CNBC the companies will be operating profitably under VMware next year.

Gelsinger said that by year two, Carbon Black and Pivotal will have contributed more than $1 billion in revenue incrementally, which will mean VMware will have more than $3 billion in hybrid cloud and software-as-a-service revenue.

Also on Thursday VMware announced earnings for the second quarter of its 2020 fiscal year. The company reported $1.60 in earnings per share, excluding certain items, on $2.44 billion in revenue. Analysts polled by Refinitiv had been expecting $1.55 in earnings per share, excluding certain items, on $2.43 billion in revenue for the quarter.

For the fiscal third quarter, VMware is calling for $1.42 in earnings per share, excluding certain items, and $2.4 billion in revenue. Analysts polled by Refinitiv were expecting $1.57 per share, excluding certain items, on $2.45 billion in revenue.

For the whole 2020 fiscal year VMware is calling for $6.54 in earnings per share, excluding certain items, on $10.03 billion in revenue. The Refinitiv consensus was $6.52 in earnings per share, excluding certain items, and $10.03 billion in revenue.

Carbon Black vaults VMware into endpoint protection

Carbon Black was founded in 2002 and debuted on the Nasdaq under the symbol "CBLK" in May 2018. The company provides anti-malware and endpoint protection products that can see into many of a company's devices and tell if they have been hacked.

In the most recent quarter, Carbon Black reported a loss of 13 cents per share, excluding certain items, on $60.9 million in revenue, with 19% annualized revenue growth. Carbon Black shares are up 2% in the past year.

Carbon Black shareholders will get $26 per share in cash from VMware for a total of $1.9 billion in cash. The price per share is 14% higher than the stock's $22.75 closing price on Wednesday.

The endpoint security marketplace is crowded, and Carbon Black competes heavily with rivals such as Crowdstrike, Cylance, Fortinet and Symantec. The space has been ripe for consolidation in recent years, particularly from traditional hardware companies. Blackberry acquired Cylance in 2018 in an effort to beef up its new business proposition as a cybersecurity company, and Broadcom said that it would acquire Symantec's enterprise business earlier this month.

Though crowded, the endpoint protection marketplace is also poised for growth. While more diverse devices go online — including more corporate-owned devices — further enabled by 5G technology, that means more and different endpoints that can serve as an entryway for criminals.

Carbon Black touted its relationships with VMware as well as IBM when it filed to go public last year. CTFN reported earlier this month that Carbon Black hired Morgan Stanley to explore opportunities to sell itself. CTFN also reported that Cisco and IBM had expressed interest, according to Bloomberg.

Gelsinger did not confirm that Carbon Black talked with Cisco or IBM but said public companies do perform "customary market checks" to ensure a deal is beneficial.

Carbon Black's CEO, Patrick Morley, will run a security business unit that VMware is forming, and VMware will move some existing assets into it, Gelsinger said.

He said VMware has been developing a thesis that infrastructure and applications should be secure by default and shouldn't need extra treatment by a security team. Breaches are happening to VMware's customers even after they have deployed security products, Gelsinger said. "It ain't working," he said.

Based in Waltham, Massachusetts, Carbon Black had 1,138 employees at the end of 2018, and customers include Belk, DA Davidson, Evernote and Netflix, according to the company's website.

Pivotal has a long history with VMware

Pivotal and VMware go way back: The company was created from assets spun out of VMware and Dell (VMware's controlling owner) in 2013. Its products help companies build and deploy their software across different server infrastructure, including public clouds. Competitors include IBM, Oracle and SAP, among others, as well as cloud providers such as Amazon and Microsoft. Pivotal's customers include Boeing, Citi, Ford and Home Depot, according to its website.

Pivotal shares have fallen 47% in the past year.

VMware said that it's buying Pivotal for a blended price per share of $11.71, including $15 per share in cash to holders of Pivotal's Class A stock, and an exchange of VMware's Class B common stock for Pivotal Class B shares owned by Dell. The ratio is 0.0550 shares of VMware's Class B stock for every share of Pivotal's Class B stock.

The news of the Pivotal purchase is not a complete surprise, as VMware said last week it was proceeding with an agreement to buy all outstanding Class A shares of Pivotal. Dell is the majority stockholder of both Pivotal and VMware, and both VMware and DellEMC contributed assets to Pivotal when it was formed in 2013.

VMware is paying $800 million in cash for Pivotal, and Dell will now own 81.09% of VMware as a result of the deal. However, Gelsinger said the Pivotal deal isn't part of some plan to make VMware a wholly owned subsidiary of Dell.

"Dell is extraordinarily supportive of an independent VMware," Gelsinger told CNBC.

"Customers were starting to say, 'I'm relying on PCF [the Pivotal Cloud Foundry product] and the PaaS [platform as a service] of Pivotal. I'm relying on VMware. I don't see you guys being as integrated in that full solution as I want you to if I'm going to commit my next-gen application development,'" Gelsinger said. "'I need to have higher integration, higher velocity of these pieces working there.' They encouraged us to take this step."

Gelsinger said the Pivotal deal follows the acquisition of Heptio, which was founded by two of the creators of Kubernetes open-source project for managing software in the form of containers — an alternative to the virtual machine technology that VMware popularized. Cloud infrastructure providers offer services for managing containers at scale across servers, so developers don't need to worry about the complexity, and Heptio helped some companies use Kubernetes.

Pivotal also offers products for working with Kubernetes — a product called Pivotal Container Service that VMware and Google worked on in collaboration with Pivotal.

"Heptio was very much, 'Oh, what are you guys doing?'" Gelsinger said. When he asked the VMware board for hundreds of millions of dollars to do the Heptio deal, they asked him what he was going to do with it, he said.

Pivotal had 2,949 employees as of Feb. 1. In the most recent quarter Pivotal reported a loss of 3 cents per share, excluding certain items, on $185.7 million in revenue and lower-than-expected guidance, sending shares lower.

JP Morgan was VMware's financial advisor in both acquisitions. Morrison & Foerster was VMware's legal counsel on the Carbon Black deal.

Correction: A previous version of this story had an incorrect number for the company's fiscal 2020 revenue forecast.

— CNBC's Kate Fazzini contributed to this report.

https://www.cnbc.com/2019/08/22/vmware-earnings-q2-2020-acquires-carbon-black-pivotal.html

[Glenn Petersen] Pivotal Software surges 60% after VMware says it’s in talks to acquire the compa...

Glenn Petersen — 8/14/2019 9:11:15 PM

Pivotal Software surges 60% after VMware says it’s in talks to acquire the company

Published 3 hours agoUpdated 2 hours ago
J ordan Novet
CNBC.comk

VMware contributed to the formation of Pivotal in 2013.
Pivotal stock has fallen 66% in the past year.

Pivotal shares rose as much as 72% in extended trading on Wednesday after VMware said it’s proceeding with an agreement to acquire all outstanding shares of Pivotal’s class A stock at $15 per share in cash, an 80.7% premium on Pivotal’s $8.30 closing price.

VMware also said in a regulatory filing that it has requested that Dell exchange all outstanding shares of Pivotal’s class B stock, other than class B Pivotal shares owned by VMware, for Class A VMware stock. Dell controlled almost 81% of VMware’s outstanding common stock and more than 97% of the combined voting power of VMware’s outstanding stock as of May 3. Dell and Pivotal are negotiating an exchange ratio for the shares.

The transaction could contribute to the further diversification of VMware, which has moved to collaborate with cloud infrastructure providers like Amazon in order to enable existing customers to run their computing workloads in whatever environment they like.

Shares of Pivotal have declined 66% in the past year. On June 5 Pivotal stock declined 41% after the company issued guidance that was below what analysts were expecting.

Pivotal went public in April 2018. VMware and DellEMC both contributed assets when Pivotal was established in 2013.

As a result of an agreement with Dell, VMware is the selling agent for certain Pivotal products, such that VMware collects cash that is then remitted to Pivotal, net of a contractual agency fee. As of May 3, VMware had a 16% financial interest in Pivotal and a 24% voting interest in the company.

In a statement of its own, Pivotal said on Wednesday that although it is in talks with VMware about a “potential business combination,” an agreement has not been made.

cnbc.com

[Glenn Petersen] VMware Q1 tops expectations, revenue up 13% to $2.27 billion VMware also report...

Glenn Petersen — 6/1/2019 11:10:04 AM

VMware Q1 tops expectations, revenue up 13% to $2.27 billion

VMware also reported an unexpected gain of $132 million from its investment in Pivotal Software.

By Natalie Gagliordi for Between the Lines
ZDNet
May 30, 2019 -- 20:37 GMT (13:37 PDT)

VMware delivered strong first quarter financial results Thursday that beat market expectations. The virtualization giant reported a net income of $505 million, or $1.21 per share. The income includes an unexpected gain of $132 million from VMware's investment in Pivotal Software, the company said.

Non-GAAP earnings were $1.32 per share on revenue of $2.27 billion, up 13% year over year. Wall Street was looking for earnings of $1.28 a share and revenue of $2.24 billion.

VMware, a Dell Technologies portfolio company, said license revenue for the quarter was $869 million. Operating cash flows came to $1.27 billion, while free cash flows for the quarter were $1.2 billion.

In terms of guidance, VMware is maintaining its fiscal 2020 forecast, with expected revenue of $10.03 billion. Analysts are expecting revenue of $10.02 billion with earnings of $6.53 a share. VMware also said that its board has authorized up to $1.5 billion in stock repurchases through fiscal 2021.

"Q1 was a good start to fiscal 2020 with strength across our comprehensive solutions portfolio," said VMware chief executive Pat Gelsinger. "We were especially pleased to announce a number of agreements during the quarter with key partners Amazon Web Services, Dell and Microsoft as customers continue to turn to VMware's cloud infrastructure technology to enable their digital transformations."

zdnet.com

[JakeStraw] VMware to Present at the Bank of America Merrill Lynch Global Technology Confere...

JakeStraw — 5/23/2019 3:13:23 PM

VMware to Present at the Bank of America Merrill Lynch Global Technology Conference
vmware.com

VMware, Inc., today announced that Sanjay Poonen, VMware’s chief operating officer, customer operations, will present as a speaker at the Bank of America Merrill Lynch Conference in San Francisco, CA on Tuesday, June 4, 2019 at 11:00 a.m. PT/ 2:00 p.m. ET.

A live webcast will be available on VMware’s Investor Relations page at ir.vmware.com. The replay of the webcast will be available for two months.

[JakeStraw] VMware had its price target raised by analysts at Barclays PLC from $200.00 to $...

JakeStraw — 5/17/2019 11:37:57 AM

VMware had its price target raised by analysts at Barclays PLC from $200.00 to $224.00. They now have an "overweight" rating on the stock.

[JakeStraw] Microsoft Corp. unveiled a partnership with VMware Inc. in a bid to bring more c...

JakeStraw — 4/29/2019 2:12:55 PM

Microsoft Corp. unveiled a partnership with VMware Inc. in a bid to bring more customers to its Azure cloud-computing service, emulating a pact that has benefited rival Amazon.com Inc.

The agreement will let VMware customers move their technology systems to Microsoft’s Azure cloud-computing services, the companies said Monday in a statement. Amazon Web Services, the leader in the market for cloud services, struck a partnership with VMware in 2016 to lure customers of the virtualization software maker to AWS.
finance.yahoo.com

[JakeStraw] VMware had its price target raised by analysts at Deutsche Bank AG to $200.00. T...

JakeStraw — 3/1/2019 2:44:14 PM

VMware had its price target raised by analysts at Deutsche Bank AG to $200.00. They now have a "buy" rating on the stock.

[JakeStraw] VMware Reports Fourth Quarter and Fiscal Year 2019 Results finance.yahoo.com “Q4...

JakeStraw — 3/1/2019 8:40:00 AM

VMware Reports Fourth Quarter and Fiscal Year 2019 Results
finance.yahoo.com
“Q4 was a terrific ending to a strong fiscal ’19 driven by broad-based strength across our diverse product portfolio and in all three geographies,” commented Pat Gelsinger, chief executive officer, VMware. “VMware is providing the essential ubiquitous software foundation for our customers’ digital transformations while we also work to drive positive global impact across our people, products and the planet.”

“We’re pleased with our performance in the quarter and for the year, including the return of $11 billion dollars to shareholders through a special dividend in December,” said Zane Rowe, executive vice president and chief financial officer, VMware. “We continued to drive deeper engagement with our customers and partners, who leverage the VMware portfolio for their business initiatives.”

[JakeStraw] New VMware Kubernetes product comes courtesy of Heptio acquisition techcrunch.co...

JakeStraw — 2/26/2019 2:06:03 PM

New VMware Kubernetes product comes courtesy of Heptio acquisition
techcrunch.com

[JakeStraw] VMware is now covered by analysts at Barclays PLC. They set an "overweight" rati...

JakeStraw — 1/9/2019 11:30:57 AM

VMware is now covered by analysts at Barclays PLC. They set an "overweight" rating on the stock.

[Glenn Petersen] Here's What's Going On With VMware and Dell Today VMware is down big after payi...

Glenn Petersen — 1/1/2019 11:49:30 AM

Here's What's Going On With VMware and Dell Today

VMware is down big after paying a massive special dividend, Dell is a publicly trading company again, and the tracking stock is no more.

Timothy Green
Motley Fool
Dec 31, 2018 at 2:46PM

What happened

Dell Technologies completed its journey back to the public markets last Friday by acquiring all outstanding Dell Technologies Class V ( NYSE:DVMT) stock. The transaction also involved VMware ( NYSE:VMW), which Dell controls with a roughly 80% stake. VMware paid shareholders a one-time $11 billion dividend on Friday as part of the deal, with most of that payout going to Dell.

Shares of Dell were up about 3.4% at 1:30 p.m. EST, while the Class V shares are no longer trading. Shares of VMware were down 14.3% from Friday's close, reflecting the payment of the special dividend. Today is the ex-dividend date. Adjusted for the special dividend, VMware stock was up about 3%.

source: Dell.
__________________

So what

The Dell Class V stock was a tracking stock intended to track the performance of Dell's stake in VMware. The stock was originally issued as part of Dell's deal to acquire EMC, which closed in 2016. EMC owned 81% of VMware prior to being acquired by Dell.

Dell successfully exchanged a mix of cash and new Class C shares for all outstanding Class V shares on Friday. The company paid $14 billion in cash and issued nearly 150 million Class C shares to retire the tracking stock. The move greatly simplifies Dell's corporate structure, and it brought Dell back to the public markets without the need for a public offering.

Class V shareholders had the option to receive either $120 in cash or 1.8066 Class C shares for each Class V share, up to a $14 billion aggregate cash limit. More than 90% of shareholders chose the cash option, with the rest picking the share option. Because the cash limit was exceeded, shareholders who opted for cash will receive a portion of their payment in Class C stock. The cash option was the smart move, with shares of the Class C stock currently trading for around $47 per share.

As part of the transaction, VMware paid a one-time special dividend totaling $11 billion. The dividend is payable to shareholders of record at the close of business on Dec. 27, with a payment date of Dec. 28. Dec. 31 is the ex-dividend date. The $11 billion payment works out to $26.81 per share.

"Dell Technologies was created to be the essential infrastructure company for this digital era, and with today's announcement, we are aligning the interests of our stakeholders to benefit from the integrated innovations and value creation from across our entire family of businesses," said Dell CEO Michael Dell in the press release announcing the completion of the transaction.

Now what

With the tracking stock gone and Dell back in the public markets, investors can now bet on the company as a whole, not just on its stake in VMware. Dell's revenue has been growing briskly, with 15% year-over-year growth in its fiscal third quarter. But the company is still saddled with a substantial amount of debt. As of Nov. 29, Dell had about $48.7 billion of debt and $17.5 billion in cash. The dividend received from VMware will pay for part of the cash portion of the tracking stock purchase.

VMware now has quite a bit less cash after paying the one-time dividend. Total cash as of Nov. 29 was $13.5 billion, along with about $4 billion of debt. This deal will make VMware's balance sheet a lot weaker.

After going private in 2013 and creating its complex share structure a few years later to finance the EMC deal, Dell has undone those moves and is once again a public company. How it all works out this time around remains to be seen.

fool.com

[Glenn Petersen] VMware to pay previously announced one-time special dividend on Dec. 28 By ...

Glenn Petersen — 12/28/2018 12:01:38 PM

VMware to pay previously announced one-time special dividend on Dec. 28

By Ciara Linnane
MarketWatch
Published: Dec 28, 2018 7:49 a.m. ET

Enterprise software company VMware Inc. VMW, +1.61% said Friday it will pay its previously announced one-time special dividend on December 28. The company will make the $11 billion payment to shareholders of record as of close of business on Dec. 27. It expects that 60.39% of the dividend will be treated as a taxable dividend for U.S. federal tax purposes, with the remainder being treated first as a return on capital and then as a capital gain. Shares were slightly higher premarket and have gained 23% in 2018, while the S&P 500 SPX, +0.27% has fallen 6.9%.

marketwatch.com

[JakeStraw] VMware acquires Heptio, the startup founded by 2 co-founders of Kubernetes techc...

JakeStraw — 11/6/2018 12:08:28 PM

VMware acquires Heptio, the startup founded by 2 co-founders of Kubernetes
techcrunch.com

[JakeStraw] Edited Transcript of VMW earnings conference call or presentation 23-Aug-18 fina...

JakeStraw — 9/7/2018 3:07:42 PM

Edited Transcript of VMW earnings conference call or presentation 23-Aug-18
finance.yahoo.com

[Glenn Petersen] h/t JakeStraw Amazon deepens its partnership with VMware to go after companies ...

Glenn Petersen — 8/27/2018 4:47:41 PM

h/t JakeStraw

Amazon deepens its partnership with VMware to go after companies that don't use the cloud

The new software will support databases from companies like Microsoft and Oracle.
Hundreds of VMware customers are using VMware's technology on Amazon's cloud.
Amazon and VMware first announced their cloud partnership in 2016.

Jordan Novet | @jordannovet
Published 4 Hours Ago Updated 3 Hours Ago CNBC.com

Bloomberg | Getty Images
Andy Jassy, CEO of Amazon Web Services, speaks at the AWS Summit in San Francisco on April 19, 2017.`
-------------------------------------------

Amazon Web Services has emerged as a dominant force in cloud computing by hosting other companies' technology infrastructure in its massive data centers. But AWS is also rolling out services for companies that do it the old way.

On Monday, Amazon and VMware introduced a version of Amazon's cloud-based database management software that's meant for companies that still use on-premises data centers.

The announcement at VMware's VMworld conference in Las Vegas is the latest example of Amazon's shift in strategy to support corporate computing outside its own facilities, even as more business moves to the cloud, where AWS is the market leader. The move strengthens AWS' so-called hybrid-cloud offerings against rivals Microsoft, Google and IBM.

The software, which will be available in the next few months, is designed to make it easier for network administrators to run their databases across more servers, regardless of whether those machines are stored in house or hosted by Amazon. The product — Amazon Relational Database Service on VMware — supports popular databases from Microsoft and Oracle, as well as open-source options like MariaDB.

Amazon and VMware started working together on a combination of cloud and on-premises technology in October 2016. The partnership is helpful for systems administrators who are familiar with VMware and want to take advantage of cloud.

VMware shares have more than doubled since that deal was announced. The company has rolled out several updates, and hundreds of VMware customers are using its technology on AWS, VMware CEO Pat Gelsinger said on the company's quarterly earnings call on Thursday.

The new technology could pose a threat to Microsoft's Azure Stack, on-premises software tools that mirror what's available in the company's Azure public cloud.

"Amazon reps today, when they hear Azure Stack, they bring in VMware Cloud on AWS," Sanjay Poonen, VMware's chief operating officer, told CNBC last week. "The partnership with VMware is the best alternative to Azure Stack."

It could also represent a new challenge to Oracle, which operates its own public cloud. Amazon has been working to move off of Oracle's database software entirely.

Gelsinger has told analysts that VMware's work with AWS would not result in a material amount of revenue this year. Stifel analysts wrote in a note last week that they don't expect material revenue from VMware on AWS until at least VMware's 2020 fiscal year, which begins in April 2019.

cnbc.com

[Glenn Petersen] The second quarter press release: sec.gov VMware shares slide despite strong Q2...

Glenn Petersen — 8/24/2018 11:54:05 AM

The second quarter press release: sec.gov

VMware shares slide despite strong Q2 results

The company reported Q2 revenue of $2.17 billion, uppercent year over year.

By Natalie Gagliordi for Between the Lines |
ZDNet
August 23, 2018 -- 20:32 GMT (13:32 PDT)

VMware released second quarter financial results after the bell on Thursday, beating market estimates. The virtualization giant reported a net income of $644 million, or $1.56 per share. The income includes a gain of $231 million from VMware's investment in Pivotal Software, the company said.

Non-GAAP earnings were $1.54 per share on a revenue of $2.17 billion, up 13 percent year over year. Wall Street was looking for earnings of $1.49 per share with revenue of $2.14 billion.

VMware's license revenue came to $900 million, an increase of 19 percent year over year. Services revenue was $1.2 billion.

In statement, CFO Zane Rowe said the quarter was driven by "strong operational performance across the business. Product license bookings grew double-digits year-over-year in all major product categories."

In terms of guidance, analysts expect VMware to report Q3 earnings of $1.49 per share on revenue of $2.16 billion. Shares of VMware were down almost four percent after hours.

zdnet.com

[JakeStraw] Carl Icahn buys stake in software provider VMware finance.yahoo.com

JakeStraw — 4/18/2018 9:00:09 AM

[Glenn Petersen] VMware shareholders are winning their battle to block Michael Dell's push for a ...

Glenn Petersen — 4/17/2018 10:01:22 AM

VMware shareholders are winning their battle to block Michael Dell's push for a reverse merger (VMW)

Julie Bort
Business Insider
April 16, 2018

Michael Dell
-----------------------------------

-- VMware shares soared on Monday on word that Michael Dell is ready to abandon his reverse merger plan between VMware and Dell Technologies.

-- Shareholders were in open revolt, and Wall Street analysts were openly negative about the prospect of the deal.

-- Employees weren't thrilled either, and neither were VMware's hardware partners that compete with Dell, according to reports.

-- The deal would have been huge, and would have given Dell a non-traditional path to going public again.

VMware shareholders are happy, and the stock is up about 7% over the close of Friday, thanks to rumors that Michael Dell is growing cold on the idea of a reverse merger — a move that would have made Dell a publicly-traded company again, after it went private in 2013 after a $24 billion buyout.

Dell is listening to angry VMware investors and bearish Wall Street analysts who have been saying that this merger is bad for VMware and only good for Dell, multiple news outlets reported on Monday.

For instance, one of VMware largest investors, Jericho Capital Asset Management, was pressuring the VMware board to end discussions, Bloomberg reported last month.

And T. Rowe Price Group, the largest independent shareholder of VMware, also opposed any such deal, it told Barron's last month.

"The proposed Dell-VMW reverse merger has previously drawn public opposition by VMW shareholders, due to the slow-growth, legacy nature of Dell's core business as well as its heavy debt load," Credit Suisse's Brad Zelnick summarized in a research note on Monday.

On top of that, the merger could have crushed VMware's growth by making it impossible for it to maintain its strong partnerships with Dell's long-time hardware rivals, especially Hewlett-Packard Enterprise, CRN's Mark Haranas reported.

As we previously reported, we heard rumblings that employees inside VMware were not too happy about the idea, as well.

All told, the clear threat was that the reverse merger could lead to investor lawsuits, among other issues.

To recap what everyone was so upset about: Michael Dell's company Dell Technologies is currently VMware's largest shareholder. Dell was considering merging with VMware, essentially selling itself to the smaller company. Because VMware is already a publicly-traded company, it would mean Dell would basically go public without the need for an IPO.

That would also mean that VMware shareholders would suddenly be on the hook for all of Dell's $53 billion in debt (much of which it incurred by buying EMC), Zelnick points out, adding that VMware represents about 10% of Dell revenues but over half if its free cash flow. Under the current structure, where VMware remains an independent publicly traded company, Dell cannot lay its hands on that cash.

In fact, in 2016, EMC executives promised that after it merged with Dell, the combined company wouldn't raid VMware's cash and wouldn't harm its long-term ability to do business with its competitors.

VMware declined to comment.

finance.yahoo.com

[Glenn Petersen] VMware reports strong Q4 as AWS partnership pays off in hybrid cloud zdnet.com

Glenn Petersen — 3/1/2018 10:43:07 PM

[Glenn Petersen] Dell is considering a sale to VMware in what may be tech's biggest deal ever VMw...

Glenn Petersen — 1/29/2018 4:01:04 PM

Dell is considering a sale to VMware in what may be tech's biggest deal ever

VMware could buy Dell in massive reverse-merger, sources say. Dell currently owns 80 percent of VMware.
The deal would give Dell shareholders a way to profit from having taken Dell private in 2013 and help pay off some debt.
VMware was the crown jewel of Dell's 2015 acquisition of EMC, but the company's business model is under threat as enterprises move to the cloud.

Alex Sherman | @sherman4949
Published 4 Hours Ago Updated 2 Hours Ago CNBC.com

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.

VMware's stock fell sharply on the news. At midday, it was down 8.5 percent.

While Dell may also pursue a more traditional initial public offering, said the people, a reverse merger would allow the company to avoid a new public offering. Dell hasn't decided on a strategic option and is also considering several other paths forward, including other acquisitions or buying the remaining stake of VMware it doesn't own, as has been previously reported. Dell is unlikely to sell the company outright or sell its stake in VMware, one of the people said.

VMware was seen as the crown jewel in 2015 when Dell acquired EMC for $67 billion. That gave Dell 80 percent of VMware, which was an early pioneer in a technology called virtualization. That process gave companies a way to run the large computers in their data centers more efficiently by packing multiple "virtual" computers on a single piece of hardware.

While the technique is still widely used, VMware's growth prospects have been tempered as companies have moved more of their infrastructure from their own data centers to large cloud providers like Amazon and Microsoft. In 2016, the company agreed to let customers run its software on arch-rival Amazon's cloud service, an admission that the cloud model is taking precedence.

The reverse-merger is one of the more audacious strategic initiatives being looked at by Dell and its advisers, said the people, who asked not to be named because the discussions are private. Dell's board of directors will meet next month to consider a slew of options, many of which are still in the early stages of examination, including the reverse merger.

If VMware were to buy Dell, VMware would issue shares to Michael Dell and Silver Lake, the private owners of Dell. The owners could then sell shares on the public market as a way of monetizing their investment in Dell, the people said.

The exact valuation of Dell isn't known because the company is private. Dell took itself private in a $24.4 billion deal in 2013. It then acquired EMC for $67 billion in 2015, a deal that still stands as the largest technology acquisition of all time.

Theoretically, a VMware acquisition for Dell would top that, making it the largest technology deal ever. Dell acquired more than 80 percent of VMware when it completed its deal for EMC in 2016. VMware's platform virtualization software was a key reason Dell pursued EMC two years ago.

While VMware's revenue has consistently grown each year, that has slowed. Annual sales rose 6.7 percent in 2016 from 2015 after six consecutive years of double-digit percentage growth. Still, net income of $1.2 billion was an all-time high for the company for 2016, and 2017 full-year estimates suggest the company will top that mark.

Spokespeople for Dell and VMware declined to comment.

cnbc.com

[Glenn Petersen] Another option is to buy the rest of VMware that Dell does not already own, one ...

Glenn Petersen — 1/26/2018 4:34:55 PM

Another option is to buy the rest of VMware that Dell does not already own, one person familiar with the matter said. VMware shares surged the most in a year and a half to $149.87, a record high.

Dell Mulls Return to Market Four Years After Going Private

bloomberg.com

[Glenn Petersen] Another big deal for VMW: Google and VMware are teaming up with a $2.8 billion ...

Glenn Petersen — 8/30/2017 6:37:03 AM

Another big deal for VMW:

Google and VMware are teaming up with a $2.8 billion startup to get an edge in the cloud wars with Amazon

Matt Weinberger
Business Insider
August 30, 2017

Google Cloud VP Sam Ramji Google
______________________________________

Google may be losing to Amazon in the cloud wars, but the search giant has a not-so-secret weapon — and some brand-new partners — that could help it fight back.

The weapon is something called Kubernetes, a software project that started out as a way for Google to manage its massive server infrastructure and has since become a go-to tool for modern software developers.

The partners are VMware and Pivotal, which is a spin-off of VMware valued at $2.8 billion. Together, the three companies plan to promote Kubernetes to large companies with their own data centers.

The partnership, announced on Tuesday, is centered on Pivotal's new Pivotal Container Service (PKS), which promises to make it effortless for companies to roll out Kubernetes. PKS allows developers build applications that can be easily installed on servers running VMware's software or run in Google's cloud.

Everybody gets something from this deal: Google gets access to VMware's customers, which include many of the world's largest companies. VMware gets to give its customers easy access to Google's cloud, including all of its cutting-edge artificial intelligence services for software developers. And Pivotal gets cozier with both companies.

Package it up

Underlying Kubernetes is a trendy developer technology called software containers that was pioneered by Docker, a $1 billion-plus startup.

Containers are neat metaphorical boxes into which developers can package their software programs. They ensure the applications run in the same way regardless of the computers that are running them, be they laptops, servers, data centers or cloud platforms. Kubernetes is emerging as the most popular way to manage those containers.

"I've never had a single engineer push back on Kubernetes as the container standard for the industry," James Watters, a senior vice president at Pivotal, told Business Insider.

James Watters, a senior vice president at PivotalPivotal Labs
_______________________________________

Kubernetes has become such a smash hit that Google rivals Microsoft and Amazon decided to support the technology in their own clouds. But Google retains an edge with the technology. As the inventor of Kubernetes, Google Cloud has a reputation for being the best home for projects using the software, which it turns out is a lot of them.

PKS lets developers write the code they want to write while, behind the scenes, Kubernetes handles the hard part of managing the containers. Kubernetes simplifies the task of building software that has to run at large scales, which is why Google created it in the first place.

Tying PKS to VMware's offerings will likely prove "attractive both to cloud-native developers and companies with strong investments in [VMware] products and skills," said Dave Bartoletti, an analyst at tech research firm Forrester.

VMWare's partnership with Google and Pivotal was born of simple demand, said Sanjay Poonen, the virtualization software provider's chief operating officer. Companies are looking for ways to use Kubernetes, so VMware went looking for ways to offer the technology, he said.

"We go where our customers are going," Poonen said.

Cloud fronts

The tie-up could help the three partners battle not just Amazon but other cloud players as well.

Google's target: Microsoft, which has long held that its investments in data center products like Windows Server give it an edge in the cloud wars. With PKS, Google will get access to companies that use VMware in their data centers. That could give the search giant a foothold from which it could spread its technology across both the cloud and the data center.

"Somehow, all this stuff should work well together," said Sam Ramji, a vice president of product management at Google. "You're gonna have data centers, and you're gonna have cloud."

VMware COO Sanjay Poonen VMware
_____________________________________

Meanwhile, PKS has its sights set on Docker, which has its own technology to manage containers. With VMware and Google behind it, Pivotal believes that PKS can grab market share from Docker, Watters said.

Finally, VMWare is aiming at Red Hat, its longtime foe. The $17 billion enterprise software company offers OpenShift, an application development platform that's similar in some ways to PKS. With the help of PKS and Google, VMware is hoping it can stem some of OpenShift's growth.

"The three of us are coming for Red Hat," Poonen said.

businessinsider.com

[Glenn Petersen] What You Need To Know About VMware Cloud On Amazon Web Services Janakiram MSV ...

Glenn Petersen — 8/29/2017 10:57:33 AM

What You Need To Know About VMware Cloud On Amazon Web Services

Janakiram MSV , Contributor
Forbes
August 29, 2017

Almost after a year of the announcement, VMware Cloud on AWS is finally available to customers. At VMWorld 2017, both the companies highlighted the benefits of the partnership. Existing businesses using VMware stack can easily extend their virtualized data center to Amazon’s public cloud.

Source: VMware
VMware and AWS Partnership
________________________________-

VMware’s decision to embrace AWS as its public cloud surprised industry analysts as well as customers. After all, AWS was an arch rival that continued to threaten the core business model of virtualization and private cloud.

Subsequently, VMware sold vCloud Air, the original public cloud offering that was launched with much fanfare in 2013. It gave the company the opportunity to stay focused on its bets.

Will this deal help VMware in the long term? What does it mean to AWS, who is already the leader in the public cloud market? How will this partnership influence Microsoft? Let's find out.

VMware has done the right thing by getting rid of its public cloud business. Developing the data center management software is very different from managing the data center in itself. While VMware has proven track record of developing the virtualization platform and management tools, it realized it cannot handle massive data centers spread across the globe. Having taken the crucial decision of moving away from the public cloud, VMware swallowed its pride when it approached its key competitor for partnership.

Pat Gelsinger, VMware’s CEO and his leadership team were fully aware of the long-term implications of the deal. When you consciously exit a market segment to protect the interest of the core business, the next logical step is to partner with the leader in that segment. VMware has done precisely that – partnering with the public cloud leader. This move would also checkmate Microsoft, which is a much bigger threat than the public cloud. So, VMware hit two birds with one shot.

VMware's customers were already making a move to AWS eroding the revenue opportunity around vSphere and vCenter. On the other hand, Amazon started to build tools for vSphere to lure enterprises to its public cloud. With the IT spend moving to public cloud, it would be extremely challenging for VMware to convince customers to continue investing in its flagship products. The partnership with AWS eases the tension by enabling customers to use VMware products while still moving to the public cloud. The super aggressive sales teams at VMware can continue to push the envelope without ever fearing the public cloud threat.

When it comes to infrastructure, VMware can ride on top of Amazon's global footprint. Customers across the globe can choose a region closer to their data center for public cloud migration. VMware would not have built the kind of infrastructure that AWS delivers. When Amazon announces a new region, VMware can piggyback on it without the CapEx and the management expertise. This comes as a huge win to VMware and its ecosystem.

Here comes the best thing about the deal – VMware gets to run its own stack in AWS. It is not giving up on Sphere for Xen or NSX for VPC. For all practical purposes, VMware Cloud is the best rollout of its Software Defined Data Center (SDDC) platform running in 10+ regions. Customers consuming VMware cloud will not even realize that they are dealing with AWS. The whole user experience, tooling, pricing, licensing, and workflow is so familiar that customers wouldn’t even need to know that their virtual machines are running on Amazon’s infrastructure.
Source: Janakiram MSV
VMware Stack on AWS
_____________________________

The most interesting aspect of this deal is that AWS has become a co-location provider for AWS. Except for the underlying physical infrastructure, VMware stack doesn’t have any dependencies on Amazon’s cloud services. The bottom line is that VMware has got the most reliable and widespread real estate provider to run its public cloud.

If this is a such a strategic move for VMware, what’s in it for AWS? Andy Jassy, CEO of AWS is considered to be an incredibly shrewd businessman. His consent to this partnership means that it is certainly valuable for AWS in the long term.

Private cloud to AWS is what public cloud was to VMware. It is simply not their strength. Though AWS executives deny the potential value of private cloud, it is a known fact that many workloads can never move to the public cloud. Customers who benefited from the public cloud want similar capabilities in their data centers. This is, of course, the sweet spot for Microsoft. If AWS doesn’t have a strong on-premises to cloud migration story, Microsoft’s Azure Stack is waiting in the wings to take over the opportunity. Amazon’s partnership with VMware will counter the Azure Stack threat. With one stroke, AWS gained the foothold over some of the largest enterprises running VMware stack. It is now confident that even if customers run a different software stack, their workloads will ultimately run on AWS infrastructure.

With VMware cloud co-located with Amazon’s cloud, there is a potential opportunity to cross-sell and up-sell the services. Large enterprises, that are customers of VMware can easily move their data warehouses to Amazon Redshift. When their enterprise agreements with Oracle or Microsoft come for renewal, they can choose to go with Amazon’s relational database service. They can also take advantage of the emerging services related to Internet of Things, Machine Learning and Artificial Intelligence, where VMware has no role to play. Once the cross-pollination of services takes place, customers will never leave AWS. This will transform into an ultimate win for AWS. Amazon just got a very compelling value proposition for its hybrid cloud.

Finally, AWS will leverage the massive salesforce of VMware to drive their cloud adoption. Every new deal to VMware Cloud indirectly fetches revenue to AWS. This would open up additional GTM opportunities for the partner ecosystem.

Let’s shift gears and analyze the impact of this deal on Microsoft.

Microsoft has taken time to ship Azure Stack, its private cloud platform, a competitor to VMware’s vCloud Suite. The delay was mainly due to the changing market dynamics. Microsoft has learned from the mistakes committed by VMware. Redmond is clear that its private cloud offering should closely resemble the public cloud capabilities delivered through Azure. The modular architecture, parity with the public cloud and partnership with OEMs make Azure Stack a very compelling private cloud offering in the market. Microsoft’s goal is to move every System Center customer to Azure by making the migration seamless. The company is counting on Azure Stack to make this happen.

VMware Cloud on AWS will indirectly help Microsoft is telling a cohesive story to customers about its unified hybrid cloud strategy. It will emphasize on the fact that Azure on-premises and Azure in the public cloud is a better combination than VMware in enterprise and AWS in the public cloud. It will be interesting to watch how Microsoft will respond in the coming months.

These dynamics left Google in a strange position. Google got to fix its weak hybrid story. With AWS and Microsoft strengthening their hybrid offerings, Google is looking for a partner. It recently announced a deal with Nutanix for the same reasons. But Nutanix’s presence in enterprise data centers is much smaller compared to VMware and Microsoft.

The changing market dynamics will benefit enterprise customers. The platform vendors are sorting out issues to make it easy for the customers to move to the cloud, which is certainly a welcome sign.

forbes.com

[Glenn Petersen] h/t JakeStraw Amazon is teaming up with its one-time enemy VMware to go beyond ...

Glenn Petersen — 7/17/2017 3:03:32 PM

h/t JakeStraw

Amazon is teaming up with its one-time enemy VMware to go beyond the cloud, says report
cnbc.com

[Glenn Petersen] VMware beats profit estimates, raises full-year forecast Reuters Thu Jun 1, 201...

Glenn Petersen — 6/2/2017 10:18:22 AM

VMware beats profit estimates, raises full-year forecast

Reuters
Thu Jun 1, 2017 | 6:38pm EDT

Virtualization software maker VMware Inc ( VMW.N) on Thursday reported a better-than-expected first-quarter profit and raised its full-year forecast, fueled by strong demand for its software used by companies to boost cloud computing efficiency.

Still, VMware shares fell as much as 6.6 percent in extended trading after the company released its results, but pulled back to trade down about 2 percent after VMware provided the forecast on a call with analysts.

Summit Redstone Partners analyst Srini Nandury said the initial drop in the stock could have been due to VMware's billings — the total revenue plus the change in deferred revenue — falling short of expectations. Billings are an indicator of future revenue.

VMware has benefited from strong demand from businesses for its virtualization software that allows one computer or server to perform the work of multiple machines by emulating them, which boosts efficiency and helps cut costs.

The company's net income rose 44.1 percent to $232 million, or 56 cents per share, in the first quarter ended May 5. Excluding one-time items, it earned 99 cents per share.

The company said revenue climbed 9.3 percent to $1.74 billion, with services revenue rising 10.7 percent to $1.13 billion.

Analysts had expected a profit of 95 cents per share and total revenue of $1.71 billion, according to Thomson Reuters I/B/E/S.

VMware's adjusted operating margin of 28.5 percent was lower than its margin of more than 30 percent in the past three quarters.

The company, which is majority-owned by Dell Technologies Inc ( DVMT.N), said research and development costs jumped 18.2 percent, while sales and marketing expenses rose 3.7 percent.

VMware's billings of $1.35 billion was below Wall Street's estimates of $1.6 billion, Summit Redstone's Nandury said.

Still, the company's revenue forecast for the current quarter was better than expected, while it raised its full-year revenue forecast.

VMware forecast current-quarter revenue of $1.84 billion-$1.89 billion, while analysts' were expecting $1.81 billion.

Its profit forecast of $1.11-$1.14 per share for the period edged past analysts' estimate of $1.09.

The company raised its full-year revenue forecast to $7.61 billion from a prior forecast of $7.57 billion.

Shares of Palo Alto, California-based VMware have risen about 58 percent in the last 12 months.

(Reporting by Laharee Chatterjee in Bengaluru; Editing by Sai Sachin Ravikumar)

reuters.com

[Glenn Petersen] Zacks: Analysts Expect VMware, Inc. (VMW) to Announce $0.65 EPS) April 18th, 20...

Glenn Petersen — 4/28/2017 9:41:16 AM

Zacks: Analysts Expect VMware, Inc. (VMW) to Announce $0.65 EPS)

April 18th, 2017
By Amy Steele

Brokerages expect VMware, Inc. (NYSE:VMW) to report $0.65 earnings per share (EPS) for the current fiscal quarter, Zacks Investent Research reports. Four analysts have provided estimates for VMware’s earnings. The lowest EPS estimate is $0.63 and the highest is $0.67. VMware reported earnings of $0.57 per share in the same quarter last year, which would indicate a positive year-over-year growth rate of 14%. The firm is scheduled to report its next quarterly earnings report on Monday, January 1st.

According to Zacks, analysts expect that VMware will report full-year earnings of $3.57 per share for the current financial year, with EPS estimates ranging from $3.48 to $3.66. For the next fiscal year, analysts anticipate that the firm will post earnings of $4.05 per share, with EPS estimates ranging from $3.96 to $4.26. Zacks Investment Research’s EPS averages are an average based on a survey of research analysts that cover VMware.

VMware (NYSE:VMW) last announced its quarterly earnings data on Thursday, January 26th. The virtualization software provider reported $1.43 EPS for the quarter, beating analysts’ consensus estimates of $1.40 by $0.03. VMware had a return on equity of 16.31% and a net margin of 16.72%. The company earned $2.03 billion during the quarter, compared to the consensus estimate of $1.99 billion. During the same quarter in the prior year, the firm earned $1.26 EPS. The company’s quarterly revenue was up 8.7% compared to the same quarter last year.

A number of research analysts have commented on VMW shares. Drexel Hamilton raised their price target on shares of VMware to $105.00 in a research note on Friday, January 27th. Oppenheimer Holdings Inc. set a $94.00 price target on shares of VMware and gave the stock a “buy” rating in a research note on Thursday, January 26th. Jefferies Group LLC raised their price target on shares of VMware from $91.00 to $105.00 and gave the stock a “buy” rating in a research note on Friday, January 27th. MKM Partners restated a “buy” rating and set a $100.00 price target (up previously from $84.00) on shares of VMware in a research note on Tuesday, January 31st. Finally, Zacks Investment Research upgraded shares of VMware from a “hold” rating to a “buy” rating and set a $103.00 price target for the company in a research note on Monday, April 3rd. One investment analyst has rated the stock with a sell rating, twenty-one have given a hold rating and eighteen have issued a buy rating to the company’s stock. VMware presently has a consensus rating of “Hold” and an average target price of $86.39.

Shares of VMware ( NYSE:VMW) traded up 0.39% during midday trading on Thursday, hitting $91.69. The stock had a trading volume of 1,337,287 shares. VMware has a 52 week low of $51.23 and a 52 week high of $93.05. The stock has a 50-day moving average of $91.07 and a 200 day moving average of $83.37. The stock has a market cap of $37.47 billion, a PE ratio of 33.01 and a beta of 0.97.

In other news, COO Sanjay Poonen sold 1,889 shares of VMware stock in a transaction on Monday, March 6th. The shares were sold at an average price of $89.04, for a total transaction of $168,196.56. Following the transaction, the chief operating officer now directly owns 182,569 shares of the company’s stock, valued at $16,255,943.76. The sale was disclosed in a legal filing with the SEC, which is available at the SEC website. Company insiders own 0.52% of the company’s stock.

A number of large investors have recently bought and sold shares of the stock. Dodge & Cox bought a new stake in VMware during the fourth quarter valued at approximately $745,926,000. Investec Asset Management LTD boosted its stake in VMware by 70.1% in the fourth quarter. Investec Asset Management LTD now owns 2,625,594 shares of the virtualization software provider’s stock valued at $206,713,000 after buying an additional 1,082,314 shares in the last quarter. BlackRock Institutional Trust Company N.A. boosted its stake in VMware by 2.0% in the third quarter. BlackRock Institutional Trust Company N.A. now owns 2,120,509 shares of the virtualization software provider’s stock valued at $155,539,000 after buying an additional 41,121 shares in the last quarter. DnB Asset Management AS boosted its stake in VMware by 49.2% in the third quarter. DnB Asset Management AS now owns 1,146,076 shares of the virtualization software provider’s stock valued at $84,065,000 after buying an additional 377,839 shares in the last quarter. Finally, Panagora Asset Management Inc. boosted its stake in VMware by 31.5% in the third quarter. Panagora Asset Management Inc. now owns 1,098,317 shares of the virtualization software provider’s stock valued at $80,562,000 after buying an additional 263,069 shares in the last quarter. 21.88% of the stock is currently owned by institutional investors and hedge funds.

About VMware

VMware, Inc is an information technology (IT) company. The Company is engaged in development and application of virtualization technologies with x86 server-based computing, separating application software from the underlying hardware. The Company offers various products, which allow organizations to manage IT resources across private clouds and multi-cloud, multi-device environments by leveraging synergies across three product categories: Software-Defined Data Center (SDDC), Hybrid Cloud Computing and End-User Computing (EUC).

thecerbatgem.com