by Analytics Insight
January 23, 2022
Dell and the VMware Special Committee of independent directors have agreed to terms that include significant simplification to the corporate ownership structure
Challenges
Here are the top-5 performance management challenges in VMware environments:
- Slow & complex problem diagnosis – 49%
- Lack of visibility across the virtualized environment – 45%
- Proactive problem solving – 43%
- User experience issues – 38%
- Chasing issues that originate in other IT domains – 27%
The single biggest problem is the inability to quickly and easily diagnose performance issues. The toughest performance problems appear to be the ones where users call and complain that “my application is slow”.
Initiatives
VMware literally runs on VMware products, apps, and solutions, and the company is honored to share our achievements and innovative initiatives. VMware IT partners with all parts of the business, including R&D to deploy VMware products in the environments and with Sales to share our product deployment journey with Customers. They have had a major impact on improving collaboration throughout the company and introducing infrastructure programs to complement app modernization. Dell and the VMware Special Committee of independent directors have agreed to terms that include significant simplification to the corporate ownership structure, plus an $11.5 billion to $12 billion special cash dividend immediately prior to the spinoff, subject to closing conditions. Dell stockholders will receive a proportional distribution of VMware shares held by Dell Technologies, and CEO Michael Dell and Silver Lake Partners will own direct interests in VMware.
The two companies have also finalized a commercial agreement. VMware plans to move ahead in the software and SaaS market, across clouds and hardware infrastructure. Independence from Dell will allow VMware to make strategic moves to achieve this goal. VMware will continue to work with Dell but being independent provides more flexibility and “more openness for partnerships.” He declined to provide specifics on opportunities outside of Dell, which remains a significant shareholder. Some analysts don’t see many repercussions for either company moving forward, as both can continue to work together on the same core products they have prior to the split. The move isn’t expected to dampen either company’s fortunes going forward. But one unknown element is Gelsinger’s departure, and whether his successor can keep the company on a roll. “The market value of VMware is at a peak right now, but whether it stays there depends on how sound the leadership will be coming in after Pat [Gelsinger],” said Geoff Woollacott, senior strategy consultant and principal analyst at Technology Business Research.
Given the growing acceptance of open source across the tech industry, Dell might find it easy to form relationships with VMware competitors that have been more aggressive in embracing open source, Woollacott said. “VMware’s got legacy subscription software that has always competed against open-source alternatives,” Woollacott said. “But the open-source, mainly in the form of Kubernetes, is becoming the great equalizer and the markets are moving more and more in that direction.” VMware has made some investments in open source in the recent past, similar to other software companies that have portfolios full of proprietary offerings. “VMware has a lot of closed software, and most of its money is made off that software,” Chen said. “Microsoft was the same way, but look at how they have pivoted to Linux and open source. For [both Microsoft and VMware], it will be a matter of balancing where proprietary software works best and where and how open-source software works best.”
Result
VMware streamlines the journey for organizations to become digital businesses that deliver better experiences to their customers and empower employees to do their best work. Their software spans app modernization, cloud, networking &security, and digital workspace. Between now and 2030, the company aims to measure and report its environmental, social, and governance (ESG) impact and work to drive progress across its 30×30 Goals. It recognizes that it cannot do this alone, nor all at once. The company will invest in co-innovation and collaboration with the expansive ecosystem of customers and partners and together will redefine what it means to be a force for good.
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