This post originally appeared at The Var Guy
As far as rumors go, this one was a whopper: Dell was in talks to buy EMC. And, as it turns out, it was absolutely true: Dell and EMC have signed a definitive agreement under which Dell will acquire EMC. The deal is valued at $67 billion.
Under the terms of the deal, EMC shareholders will receive $24.05 per share in cash in addition to tracking stock linked to a portion of EMC’s economic interest in the VMware business. Dell plans to maintain VMware as a publicly traded company, which could mean it’s leaning on VMware’s success to fund the EMC deal.
According to the release announcing the deal, the combination of Dell and EMC creates “the world’s largest privately controlled, integrated technology company.” For sure, adding EMC technology propels Dell into the storage stratosphere, and when combined with Dell’s servers, storage, virtualization and PCs, Dell’s portfolio becomes a force to be reckoned with.
The deal also better positions Dell to be a major player in high-growth technology areas including hybrid cloud, software-defined networking, converged infrastructure, mobile and security.
What this means for VMware ultimately remains to be seen. Should Dell stick with its plan to run VMware as a publicly traded company, VMware could become a cash cow for Dell. Dell also could decide to sell the company, which, considering it has a market value of about $33 billion, according to the New York Times, is about half the size of the deal. Currently, EMC has an 81 percent stake in VMware.
What the deal means for Dell and EMC solution providers seems obvious at first glance—better access to a complete technology portfolio and a more solid ability to sell into emerging markets. What it means to VMware partners, however, remains to be seen. You can bet we’ll be keeping our eye on the implications of the deal.