Relationship with VMware will not change, EMC chief says

EMC and VMware plan to continue working together closely in the years ahead, said EMC’s top executive, dispelling speculation the storage vendor might sell down its stake in the virtualization software company.

Much of EMC’s long-term strategy, particularly in areas related to virtualization and cloud computing, is matched with VMware’s own plans. The financial ties and partnership between the two companies benefits both of them, and the current close relationship will continue, Tucci said.

VMware was a wholly owned subsidiary of EMC until 2007, when it sold off a stake in the virtualization software vendor through an initial public offering. Today, EMC continues to own approximately 85 per cent of VMware, and consolidates VMware’s financial results with its own.

Even as EMC and VMware work together more closely, EMC wants to see VMware working with other players, including its rivals.

“I encourage them and give them the total open ability to share their technology with any other player in the industry, including any competitor we have. We’re actually showing a preference for VMware technology on the EMC side and that preference is helping us grow,” Tucci said.

By letting VMware work closely with rivals and other industry players, the company’s virtualization technology is more widely adopted than it would be if only EMC used it. “You need to create standards and proliferate them,” Tucci said.

As VMware’s products are widely used that creates new business opportunities for EMC, and VMware is also able to sell to EMC’s customers. Because VMware’s financial results are consolidated with EMC, when VMware does well it boosts EMC’s bottom line.

Given the benefits EMC gets from its current ownership stake in VMware, the storage vendor has no plans to reduce its stake, Tucci said, adding the company wasn’t interested in increasing its stake above the current level.

“There’s no expectation or plans to buy the 15 percent we don’t own, but I’m going to run it the same I run it today,” he said.

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Jim Love, Chief Content Officer, IT World Canada

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