VMware Drops Plans to Launch Joint Cloud Venture with EMC

Cloud JV plans blamed for VMware's drastic stock drop

Nicole Henderson, Contributor

December 14, 2015

1 Min Read
VMware CEO Pat Gelsigner speaking at VMworld 2014 in San Francisco.VMware

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Article courtesy of theWHIR

VMware said on Monday that it will no longer be part of a cloud services joint venture called Virtustream with EMC which was expected to launch in Q1 2016. VMware made the announcement in a one-line statement in a regulatory filing.

Announced in October, the new business unit was supposed to include cloud services from EMC, VMware and Virtustream, the cloud services provider EMC acquired in May for $1.2 billion.

The joint business was to be jointly owned 50:50 by VMware and EMC. According toSilicon Valley Business Journal, it was estimated that would hit VMware’s adjusted bottom line next year by between $200 million and $300 million.

The Virtustream announcement has been blamed for contributing to a 25 percent decline in VMware share value over the last two months, according to a report by the Re/Code. It was supposed to be a part of the acquisition of EMC by Dell.

Shareholders in EMC and VMware were displeased with the plans for the joint venture, calling it a “dumping ground” for money-losing assets, Re/Code said.

This first ran at http://www.thewhir.com/web-hosting-news/vmware-drops-plans-to-launch-joint-cloud-venture-with-emc

About the Author(s)

Nicole Henderson

Contributor, IT Pro Today

Nicole Henderson covers daily cloud news and features online for ITPro Today. Prior to ITPro Today, she was editor at Talkin' Cloud (now Channel Futures) and the WHIR. She has a bachelor of journalism from Ryerson University in Toronto.

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