EMC, VMWare Spins Off As New, Independent Company

Cloud software services provider VMWare announced in its earnings call today that it will be forming a jointly-owned new company with EMC. 

TechCrunch said that the new company, will be called Virtustream, may confuse investors who are quite acquainted with the activities of both companies in the last few months alone. To note, EMC owns 80 percent of VMWare, but with the new company, will have both data computing providers owning 50-50 percent share. The new company’s financial results will reportedly be consolidated into VMWare’s financial results beginning the first quarter of next year. Moreover, EMC has been acquired by Dell last week for USD67 billion. 

Reuters said both EMC and Dell support VMWare’s independent partnering strategy. However, analysts are skeptical, predicting a troubled future for investors.

FBR Capital Markets analyst Daniel Ives told the news site, "It seems that dark days are ahead for VMware as this company is heading down a troubled path, the outlook will not sit well with investors."