Tuesday, August 04, 2015

Why EMC May Soon Buy Out — Not Spin Out — VMware | Re/code

Financial virtualization?

"It makes sense for a variety of reasons. As Elliott Management has pointed out as VMware has grown, its business in some places overlaps and even competes with that of its parent. Tucci has defended this “no seams” approach, saying it prevents would-be competitors from squeezing through openings.

But it also means that both companies have to bear the burden of their own operating costs. Amit Daryanani, an analyst with RBC Capital Markets, estimated in a research note to clients last week that combining EMC and VMware into one company would reduce their combined operating costs by nearly $950 million next year — which, when combined with the $175 million in savings on the table for next year, would exceed the billion dollars Tucci hopes to eventually save."
Why EMC May Soon Buy Out — Not Spin Out — VMware | Re/code
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