Dell forced VMware to make 2 big dividend payments to them the last few years, for a total of $20B+ worth of cash. They used the first dividend to take Dell public. They used the second dividend to reduce the Dell debt, and supposedly "emancipate VMware", so to speak. VMware was left with no cash, and a lot of debt. Then Michael Dell turns around and sells VMware, capitulating once the stock price starts tanking. Dell makes out like a bandit, he's a financial wizard. But 20,000 VMware employees will likely lose their jobs. The fate of VMware was sealed the moment Pat and Sunjay left the company, and the current incompetent management team took over. The stock price was $160 last year this time, and $200 the year before. Now the company is being sold for a song, and layoffs loom. Talk about truly epic values.
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Where can one find the “ Change-in-Control Retention Plan” please?
Welcome to the cult
of Pat. We ignore
facts. This would have
happened under Pat.
Yes, Pat made some poor decisions as CEO. 4 years of trying to be a public cloud with VCloudAir was the worst decision ever. VMware wasted precious time, while AWS got stronger. Those poor decisions ultimately came home to roost.
Ragu's biggest mistake was the debacle called Pivotal. Tanzu is a hot mess. He is also not a charismatic leader, not inspirational to listen to at all, and his exec team is weak.
VMware had only 3% growth? That would not have happened if Pat or Sanjay were CEO.
Welcome to the cult of Pat. We ignore facts.
This would have happened under Pat. Don't fool yourself. The management has been saying that growth will slow as the transition to subscriptions came into full swing.
I know it’s not smart to blame single person for what is happening with the company . But more and more I feel the one who is fully responsible for what is happening is Dell . Poor guy - still didn’t get enough money …
As per last post. Growth has tanked. VMware has got to that point where growth is so small costs are out stripping revenue and growth. Salaries are biggest cost.
VMware has become too fat. Some BUs now becoming too costly. They had two options
- Do a large layoffs and sell off the poor performing BUs.
- Sell to highest bidder and it’s their problem to solve. Shareholders get a good return, majority of employees get the hit.
They chose option 2 because option 1 is too hard for current management.
Such a shame the darling of the IT industry is now entering this phase of its evolution. It’s happened before it will happen again
Please stop writing
about Pat and Sanjay
as some sort of
mythical savior duo
No one could have saved VMware when the share price was $90 - not Pat, not Sanjay.
The point is, the reason VMware is being sold, is the share price was sliding down, and the company had a terrible Q1. If the share price was $160 or higher, like $200 a few years ago, the company would not have been sold. VMware would have been growing from strength to strength, and Broadcom would not have been able to afford VMware.
Why is the VMware share price sliding? Because growth has tanked last 12 months. In this past Q1, read the numbers, growth was only 3%. When was the last time VMware had only 3% growth? That would not have happened if Pat or Sanjay were CEO. Current management could not grow the company. Hence, the company is being sold. Plain and simple.
I don’t feel bad for the current management. Have you read the Change-in-Control Retention Plan? Most of us would have been fired for being such useless employees, but they are going to receive up to 2x their annual OTE salary, full vesting and benefits.
Please stop writing about Pat and Sanjay as some sort of mythical savior duo. Sanjay was hired because he goes to Pat's Church, not because he had any skill in being a manager.
Pat as the worst CEO at vmware, and has moved on to finishing the destruction of Intel.
Pat had no interest in fixing the myriad problems inside vmware (software development, corrupt management, and infrastructure issues), that he was told about specifically. Instead, the people telling him bad news left because he would NOT address it.
Yet, despite all those flaws and the myth of his greatness, Pat could have done nothing to stop Dell selling. Pat allowed many terrible things to continue at vmware, but he could have done nothing about this..
How would Pat have stopped this? Taken Dell outside and offered trial by combat? Dell owned the largest stake in vmware aka able to do whatever he wants.
You also forgot Dell made VMware buy dying Pivotal for 2.7 billion (probably overpaid by 3-5 times).