If this doesn’t happen, how does VMware come back from this? Truly, what happens? We all just go back to normal?
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If we survive, VMware needs something like when Steve Jobs came back to Apple in 1997. Someone to come in, cut all the marginal businesses that lose money, and then focus the company on a core group of profitable products. Then we need to begin innovating again. VMware created virtualization. It defined the market. We need something like that again. Kubernetes is an open source product from Google that a bunch of companies have built solutions on top of. It's not a sustainable competitive advantage like VMs were. We need a new category-defining product. VMware needs its iPhone.
I don't agree. I think VMW can still recover with the right leadership.
Remember AMD 6/7years ago was basically dead and very near to close everything.
Look now, is one of the most valued company in the S&P 500 and surpassed Intel in market cap and competing with Nvidia thanks to a new generation of leadership with great vision.
And VMW is in a much better state than AMD was at the time. It has still good revenue and can have a good margin if it doesn't waste huge amount of money in bad investment/tech. The name is still very valued in the IT world
VMware was doing fine before the deal was announced.
Not sure it was tbh.
VMware was doing fine before the deal was announced.
So here’s my rampant speculation on what’s going to happen. IMO a lot of time, money, and effort went into planning a resizing of VMware. If VMware remains independent that resizing is still going to happen. The BUs will still be collapsed into a single unit (except EUC). The layoffs will still happen, but without HR, Legal, and other positions that would have been redundant if the takeover had happened.
EUC is still going to get spun off one way or another. That has been discussed for nearly a decade and it does make sense to do it now.
All of this will be done to make VMware more attractive to another buyer. Dell Technologies has about $20billion in debt. They were on track to make a bit over $21Billion from this buyout. Having zero debt is going to put Dell Technologies in an amazing position compared to its competitors. Those competitors have to keep financing their debt at a time that interest rates are higher than ever. A zero debt Dell is going to be in the best financial position in the entire industry.
Depends on what Dell and his cronies want. They can throw up their hands and just dismember the company and auction off the pieces to sharks. Or they can try to repair the damage done as quickly as possible to restore confidence with employees and customers, which could include:
- New leadership ASAP.
- A firm and quick timeline for whatever cuts need to happen.
- A firm and quick timeline for whatever spinoffs need to happen.
- For employees who chose severance instead of a Broadcom FTE, let them leave with that severance if they wish.
The deal is toast. Broadcom has already shown they are unwilling to proceed without China, and China has no reason to back down if the new chip penalties aren't removed. And why would they be so soon? It's over, we just have to wait out this stupid dance for four more weeks in an information vacuum.
The stock won’t get cut in half , more likely to head to back around the 100 to 110 mark.
As for someone swooping in and buying it , MD and Silverlake will still have majority control.
At a guess :
New executive team brought in.
Restructures across the business .
Company incentives reduced
New direction .
Raspberry Kombucha removed from the canteen.
Assuming VMware doesn't get bought out by someone else and have the chance, I think they can recover, but it will be a hit and lower stock price for a couple of years.
Stock gets cut in half and someone else swoons in to buy VMware for half price.
It will be best for Raghu and his comrads to resign and let new leadership rebuild trust with employees.