VMware stepped out into the world as an independent entity this week, as Dell Technologies wrapped a multi-billion dollar deal to spin off its 81% stake in the software company.
Announced in April, the transaction included an $11.5 billion special cash dividend for VMware stockholders, which was paid out on Monday. As part of the deal, the newly separated companies immediately entered into a commercial framework agreement which set the terms for collaboration on future products, services and go-to-market strategy. That agreement has an initial term of five years, with automatic one-year renewals set to kick in thereafter unless either party decides to terminate the partnership.
Reuters reported VMware as a standalone entity has a market value of approximately $64 billion.
Michael Dell, CEO and chairman of Dell Technologies, said in a statement the deal’s close marks an “important milestone” for both companies. “We are unlocking significant value for stakeholders, while maintaining our close partnership in sales, support and innovation for our customers,” he stated. “We are full speed ahead, solving customer problems, driving progress and capturing opportunities in areas like multi-cloud, edge and telecom.”
In a separate statement, VMware CEO Raghu Raghuram said going forward the company will “continue to bring our multi-cloud strategy to life.”
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Raghuram offered more detail about VMware’s post-spin off strategy at an analyst event last month, noting it plans to focus on creating products which enable multi-cloud operations, meet the needs of remote workers and make it easier for developers to build and launch new apps. He added the deal will open the door to new partnerships and free up room on its balance sheet for the company to pursue acquisitions.
“The demand for compute cycles is everywhere, and therefore companies are deploying clouds or utilizing clouds everywhere,” he said at the time. “VMware’s opportunity in this new world is to provide an ubiquitous software platform that enables customers to build, run and manage these workloads wherever they are.”