Dell Technologies to Spin Off VMware Stake

Dell Technologies has announced plans to spin off its 81% equity ownership interest in VMware, resulting in two standalone companies. The transaction is expected to close during the fourth quarter of calendar 2021.

Upon completion of the spin-off, Michael Dell will remain chairman and chief executive officer of Dell Technologies, as well as chairman of the VMware board. Zane Rowe will remain interim CEO of VMware, and the VMware board of directors will remain unchanged.

The companies said they will enter into a commercial agreement that will preserve their unique and differentiated approaches to the co-development of critical solutions and alignment on sales and marketing activities. VMware will continue to use Dell Financial Services to help its customers finance their digital transformations.

"By spinning off VMware, we expect to drive additional growth opportunities for Dell Technologies as well as VMware, and unlock significant value for stakeholders," said Michael Dell. "Both companies will remain important partners, providing Dell Technologies with a differentiated advantage in how we bring solutions to customers. At the same time, Dell Technologies will continue to modernize its core infrastructure and PC businesses and embrace new opportunities through an open ecosystem to grow in hybrid and private cloud, edge and telecom."

With this transaction, Dell Technologies said it is poised to further capitalize on the rebound in infrastructure and PC spend, new cloud operating models driving as-a-service growth, compute moving to the edge, and customers' longer-term digital transformation initiatives. With a strong commercial agreement in place, Dell Technologies will have the ability to continue to work closely with VMware to drive innovation and preserve go-to-market synergies while generating new growth opportunities through an open ecosystem.

With technology at the center of the world's recovery, Dell Technologies said it is focused on:

  • Further strengthening the company's leadership position in growing technology infrastructure and client markets
  • Expanding into new growth areas of hybrid cloud, edge, 5G, telecom and data management
  • Delivering a modern customer experience in the do-from-anywhere economy, including moving quickly toward cloud operating and consumption models under the APEXinitiative