Data storage, cloud software technology and services giant VMware ($VMW) announced a surprise move today in their earnings call with investors that relates to one of the D.C. area's latest and largest unicorns—also known as a startup turned billion dollar company. Earlier this year, EMC acquired Bethesda-based Virtustream for $1.2 billion. Today, VMware told investors that they planned to relaunch Virtrustream as a separate but jointly held company with EMC, each owning a 50 percent stake.
The move follows less than one week after Dell announced the now historic acquisition of EMC for $67 billion. The deal has yet to close, but is cemented.
For reference, EMC owns 80 percent of VMware but they have long been individually traded companies. Beginning in Q1 of 2016, Virtustream’s financial results will be consolidated into VMware financial statements. Clearly, it's a complicated arrangement. So why do it?
As TechCrunch's Ron Miller explains, "For now Virtustream is [a] newly formed joint venture that gives both companies a legitimate cloud property they can point customers to as they try to make the transition to the cloud future. Should the deal with Dell go through, well it gives Dell the same thing."
