Cloud: VMware Terminates EMC Joint Venture Project

The virtualization specialist announces its withdrawal from the joint venture project it announced with EMC. Through this joint venture, the two players wanted to give birth to a hybrid cloud actor.

In a document sent to US securities regulators (SEC), VMware announces that it is pulling out of its joint venture project with EMC. The virtualization specialist and its parent company formalized this joint initiative in October . Its goal: to create a hybrid cloud infrastructure actor, capable of offering a combined public cloud (IaaS) and private offer. Incorporating some of WMware’s business, it was to be carried by Virtustream, a private cloud company acquired by EMC in May 2015. The joint venture was to take this brand as its name.

How to explain this change? Since announcing the acquisition of EMC by Dell , the work VMware has been declining, from 82 to $ 57 (its course this December 14 at closing). Although  VMware is 80% owned by EMC, the company has indeed a separate management and its own during scholarship . During the last two months of the VMware stock retreat, the most significant dropout took place on October 21st, the day of the announcement of the joint venture with EMC .Beyond the wrong indicator, it can be even more annoying than usual for VMware management. Because in the context of the acquisition of EMC, Dell plans to pay $ 24.05 per share to EMC shareholders, but also $ 9.10 per title in the form of VMware inventory tracking. In line with the financial performance of the shares of the division it targets (this is the logic of tracking stocks), the potential value of these “reflection shares” has consequently fallen as the stock VMware value. This is undoubtedly what motivated the decision of the editor to backtrack, with the desire to reassure its shareholders.