VMware, a business unit of EMC seems to be slowly preparing itself to accept Dell as its new master. With Dell and EMC’s $67 billion deal almost on the verge of completion, the world’s leading server virtualization technology giant is trying its best to accept the future change.
As a first stepping, the company chose to get leaner, and has announced that it is shedding 800 jobs — almost 5% of the company’s total workforce — at a cost of between $55 million and $65 million. Most of the 800 job losses are believed to have come from VMware’s cloud operations.
This doesn’t mean that the company is pulling down out of the cloud entirely, though. It plans to stand out of the competition by channelizing itself in providing specialized cloud software and services unique to VMware and distinct from other public cloud providers.
VMware plans to also focus on NSX business on a serious note from now on. NSX is a network virtualization and security platform for software defined data centers that has emerged from VMware’s $1.3 billion acquisition of startup Nicira back in 2012. This grew over 100% year on year, bringing the total annual bookings run rate to well over $600 million.
Instead of competing with Azure and AWS, VMware is planning to sustain in business by hunting for enterprises which rely on public clouds platforms like Azure and AWS. Its NSX business offering can be used to set up secure encrypted overlay networks across corporate data centers and Azure, AWS and other public clouds.
Another area in which VMware wants to show its market presence will be its VMware’s Virtual SAN. The company said in company’s financial report last month that its vSAN has grew 200% year on year in Q4 2015, with a total annual bookings run rate well over $100 million.
One more promising area in which VMware highlights itself is so-called end-user computing, which grew over 30% year-over-year, bringing the total annual bookings run rate to over $1.2 billion. End-user includes things like VMware Horizon VDI infrastructure, as well as Air Watch, the enterprise mobility management software company that VMware acquired in 2014 for about $1.5 billion, and which can be used to deliver secure cloud applications.
So, what’s all this for?
Industry analysts’ feel that all these developments lead to one point and that VMware is deliberately transitioning itself in order to work under Dell in future. That’s going to make life rather interesting for Dell, because it will take a couple of years for the company to discover whether VMware’s transformation strategy succeeds and whether keeping it under its wings will work out on an economic note.