Independent but accelerated: Gelsinger, Dell discuss post-merger place for VMware

Dell Technologies CEO Michael Dell

Technologies CEO

— If attendees at Dell PEAK event at Aria here this week were left wondering just where Dell was, as the conference downplayed the Dell name in light of its looming independence from the computing giant, they didn’t have to look far to find the answer. Dell Technologies was just down The Strip, with a large presence, including multiple appearances by CEO Michael Dell at at Mandalay Bay.

Here, Dell and CEO were bringing their message that once the Dell/ merger is complete, VMware will remain strongly independent, but will benefit greatly from a closer relationship with the suddenly-expanded Dell.

In a conference with press at VMworld, Gelsinger and Dell both expressed a belief that VMware (which is 85 per cent EMC-owned, and thus will become 85 per cent Dell-owned post merger) and Dell are “better together,” and a belief that both companies have to continue to be independent in building their respective ecosystems.

Both companies spoke of the importance of “open ecosystems” to their respective businesses, but even in the co-opetition-heavy technology industry, would relationships like Dell’s longstanding partnership with VMware-rival (and sometimes ally) , or VMware’s partnership with Dell competitor Hewlett Packard Enterprise continue unabated? In a word, from Dell, yes.

“Just as VMware has an open ecosystem of partnerships, and you see at VMworld all the industry companies work in that ecosystem, Dell also has an open ecosystem,” Dell told reporters. “Our industry has always been about open and choice. Companies that offer that kind of flexibility have done well.”

VMware CEO Pat Gelsinger

VMware CEO Pat Gelsinger

Gelsinger stressed that VMware will retain autonomy, and will be free to pursue relationships that make sense for VMware’s growth, even if those plays wouldn’t be Dell’s first choice. He said that theory has already been put to the test with an expanded cloud relationship between VMware and Dell rival . The chief executive said that when he took the idea to Dell, Dell acknowledged that it made sense for VMware’s growth, and quickly gave his blessings.

That independence, because VMware remains a publicly-traded company inside privately-held Dell. While it’s a fairly unique arrangement, it’s not totally unique, even for Dell, which also includes publicly-traded SecureWorks within the family. Talking about the arrangement, Dell returned to what the company sees as the advantages of being a private entity, particularly being able to make long-term investments that are right for the direction of the business but might not result in the biggest current-quarter pop, and the ability to better incubate and innovate “fast and flexible startups” growing rapidly in new markets within the company. Two current examples: Boomi from the pre-merger Dell side, and Pivotal from the pre-merger EMC side.

So what does VMware get out of its connection to Dell? Gelsinger said he sees several benefits, perhaps the biggest of which is his ability to accelerate VMware’s growth in global markets where Dell may have a larger and more powerful presence today than does VMware.

“If I had to build up the reach they have into tier-three or tier-four cities in India, in Brazil, or in China — man, that takes a long time,” Gelsinger said.

Dell also played up the engine that VMware becomes part of, saying that with the merger done, VMware will become part of “the largest, strongest supply chain int ehw orld,” and “the largest, strongest go-to-market engine in the world” in Dell.

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