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VMware/Dell split confirmed for November 1st

Analysis Dell and VMware have named the day they’ll break up: November 1.

The conscious uncoupling starts on October 29, when VMware will pay a special dividend of $11.5 billion to all current shareholders. On the same day, Dell shareholders will also receive a dividend, in the form of VMware stock, to compensate them for Dell letting go of the 81 per cent of VMware it owns but which isn’t publicly traded.

All that paper-shuffling should be finished by November 1.

At which point VMware will be an independent company for the first time since EMC acquired it in 2004.

In hindsight, that acquisition was a brilliant decision: VMware’s revenue has grown from under $1 billion a year in 2004 to the $12 billion it is forecast to haul in this financial year. EMC, and then Dell, were able to surf that growth and ensure friends-with-benefits status as VMware set agendas for every datacentre.

As a subsidiary, Virtzilla also pulled off the very rare feat of beating off an assault by Microsoft when the beast of Redmond went after the server virtualization market with its Hyper-V hypervisor.

VMware succeeded by navigating the narrow path between offering proprietary technology, and making it beneficial to users and to the wider technology industry. The storage industry in particular owes VMware a lot for making its wares more attractive.

As of November, VMware must stand alone – but it won’t be friendless. All major clouds and enterprise hardware players have bought into VMware’s vision.

Indeed, VMware continues to set agendas for the hardware industry. The virty giant has taken the lead in making DPUs/SmartNICs usable in enterprise datacentres. The company’s new memory virtualisation plans have also won broad approval.

No other enterprise software vendor can float this sort of architectural change and make it stick.

VMware may even, finally, have found a way to excite developers about its “Tanzu” Kubernetes offerings with today’s debut of a Community Edition of the bundle. In the past, VMware has targeted its traditional buyers – operations types – by telling them that Tanzu will let them run Kubernetes without having to create new software silos.

But VMware knows ops can’t tell devs what to do. And it knows that at a point in time when almost every new product requires new software, organisations are willing to let developers work however the coders believe will make them most efficient.

The Community Edition is VMware’s attempt to do that. It offers free tools that (it hopes) developers will perceive as allowing them to code in ways that get their efforts into production more quickly. If Virtzilla can turn developers into a source of demand for both Tanzu and its infrastructure products, November 1 will be seen as the start of some happy years.

Even if that effort meets with minimal success, VMware is still at the heart of many vendors’ plans to expand into the edge and telecoms markets, and – as Dell announced last week – displace proprietary tech there with the VM-centric paradigms dominating modern datacentres. ®


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