Post-Dell VMware will pursue M&A, new partnerships: CEO

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Post-Dell VMware will pursue M&A, new partnerships: CEO
Raghu Raghuram (VMware)

A newly independent VMware will look to pursue deeper deals with cloud computing providers and consider "large scale" acquisitions that could help the company grow, chief executive Raghu Raghuram told Reuters.

VMware on Monday completed its spinout from Dell Technologies, which owned 81 percent of the Palo Alto, California-based software firm, to become a separate publicly-traded company worth about US$64 billion.

Founded in 1998, VMware led a major change in how big companies used their data centres with technology that let data centre owners slice up physical computers into "virtual" machines that could be quickly scaled up or down for the task at hand to get more work done. VMware became a mainstay in corporate data centres.

But as big companies began to move computing work to cloud providers such as Amazon.com's Amazon Web Services, some analysts predicted VMware's usefulness would decline.

Instead, many large businesses are opting to use a combination of their own data centres and one or more cloud providers, which has, in turn, spurred several cloud providers to strike partnerships with VMware for better access to its customer base.

Raghuram said now that VMware is not under Dell's umbrella, he wants to aggressively pursue more of those deals.

"This truly allows us to go out and be the Switzerland of the industry," he said.

VMware will also look to use its shares as a currency for buying other companies to add technologies to its offerings.

"We are not a controlled entity anymore. This allows us to use equity to do large-scale transactions down the road," he said. "Small, hot startups or reasonably valued big companies - it gives us access to the full spectrum."

Under the spinout, Dell and other shareholders will receive a special dividend of about US$27.40 per share, or about US$11.5 billion, which Dell has said it plans to use to help pay down debt.

(Reporting by Stephen Nellis in San Francsico; editing by Richard Pullin)

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