YOU ARE AT:BusinessDell Technologies to get $9 billion-plus infusion with VMware spin-off

Dell Technologies to get $9 billion-plus infusion with VMware spin-off

Dell Technologies and VMware will “continue to co-engineer solutions”

Dell Technologies, which holds an 81% ownership stake of cloud and virtualization giant VMware, announced on April 14 it will spin-off its ownership of VMware. “By spinning off VMware, we expect to drive additional growth opportunities for Dell Technologies as well as VMware, and unlock significant value for stakeholders,” Michael Dell said in a statement.

He continued: “Both companies will remain important partners, providing Dell Technologies with a differentiated advantage in how we bring solutions to customers. At the same time, Dell Technologies will continue to modernize its core infrastructure and PC businesses and embrace new opportunities through an open ecosystem to grow in hybrid and private cloud, edge and telecom.”

The transaction is expected to close in the fourth quarter and at that time VMware will distribute a cash dividend of between $11.5 billion and $12 billion to all shareholders. For Dell Technologies that amounts to a payment of between $9.3 billion and $9.7 billion. According to Dell Technologies, it will use that cash infusion to pay down debt.

In a call with investor’s yesterday, Dell Technologies VP and COO Jeff Clarke explored the telecom opportunities the company is eyeing, according to a transcript.

“Following the accelerated digital transformation of last year, customers are investing to springboard into the future of automated and intelligent outcomes,” Clarke said. “And they are racing to the edge including the adoption of 5G, a movement towards open standards in telecom and an increasing number of AI and machine learning use cases. This will drive an estimated $700 billion in accumulative spend on edge infrastructure and datacenters within the next decade.”

Clarke continued: “By extending our cloud model, an ecosystem to the edge, we can provide a consistent approach to infrastructure, data, applications and security across the entire environment. With our world-class solutions size and scale and differentiated expertise of our service and support teams, we have the necessary networks, processes, (part depot) and other infrastructure to support the edge around the world including remote locations. This is highly distributed on-premise deployment. This is what we do, it’s our turf and we intend to win.”

ABOUT AUTHOR

Sean Kinney, Editor in Chief
Editor-in-Chief Sean focuses on multiple subject areas including 5G, Open RAN, hybrid cloud, edge computing, and Industry 4.0. He also hosts Arden Media's podcast Will 5G Change the World? Prior to his work at RCR, Sean studied journalism and literature at the University of Mississippi then spent six years based in Key West, Florida, working as a reporter for the Miami Herald Media Company. He currently lives in Fayetteville, Arkansas.

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