6 Channel-Impacting Facts About Dell's VMware Spinoff

Dell’s spinoff of VMware will mark the end of an era and the start of a new one in VMware’s 20-year-plus history.

Dell announced the decision, a move it’s been exploring since last summer, on Wednesday. Its stake is worth $52 billion.

VMware became part of Dell five years ago when Dell acquired VMWare’s parent company, EMC, for $67 billion. It was the largest deal in tech history. VMWare has been Dell’s best-performing business unit since then; however, the EMC acquisition left Dell with considerable debt. The company plans to use the proceeds from the VMware spinoff to pay down that debt.

The spinoff will create two standalone public companies.

Dell’s Michael Dell

Michael Dell will remain chairman and CEO of Dell, and chairman of the VMware board. Zane Rowe will remain interim CEO of VMware, and the VMware board of directors won’t change.

“Both companies will remain important partners, providing Dell Technologies with a differentiated advantage in how we bring solutions to customers,” Dell said.

VMware was founded in 1998. It went global in 2003, opening its first European office in the United Kingdom. It has since opened offices around the world. In August 2019, VMware rocked the channel by announcing its acquisitions of Carbon Black and Pivotal Software for a combined value of $4.8 billion.

Scroll through our slideshow above for more details about the upcoming spinoff that will have channel impact.