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More on EMC/VMware: EMC reportedly keeping majority stake in Virtustream

Nov. 24, 2015 3:43 PM ETDell Technologies Inc. (DELL) StockVMW, DELLBy: Eric Jhonsa, SA News Editor
  • Reuters reports EMC (EMC +0.9%) now plans to keep a majority stake in enterprise cloud services/software provider Virtustream, and thus backtrack on plans to put Virtustream's services ops (along with VMware's vCloud Air and other cloud services assets) in a JV with VMware (VMW +4%).
  • VMware would have a minority stake in Virtustream under the new plan, which may be announced "as early as December."
  • The report shortly follows one from Re/code stating EMC and VMware shareholders are pushing for changes to Dell's planned acquisition of EMC, including an unwinding of the Virtustream JV.
  • VMware remains up strongly. On its Q3 earnings call (transcript), the company forecast the Virtustream JV would have a $200M-$300M 2016 op. loss while generating "multiple hundreds of millions of dollars of revenue in 2016 with a strong double-digit growth rate." Virtustream's services ops face competition from Amazon (still the dominant player in public cloud infrastructure services), Microsoft, IBM, and others.

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