Literally a day after writing the post on how vCloud Air and Air Network Partners are critical to VMware’s future cloud play and how the joint venture with Virtustream would be beneficial for VMware and vCloud Air Partners in general I came across this tweet.
— Anthony Spiteri (@anthonyspiteri) November 25, 2015
While that came a little bit of a shock initially there has been a few more articles surface in the last week that explain the reasons behind this likely about face.
I’m not a financial analyst, but the reasons and explanation behind the impact on the VMW stock price felt on the day of the vCloud Air/Virtustream Cloud Business Unit announcement make sense and the VMW stock has started to semi correct it’s self since rumors of the joint venture being no more came to light.
The issue was that under the original terms, VMware would assume much of the cost of Virtustream’s growing-but-expensive enterprise cloud business and that would hurt the price of VMware’s tracking stock set up as part of the EMC-deal. Now, EMC would assume those costs.
My humble take is that the dollars have gotten in the way of what would have been a really good partnership for both VMware and Virtustream…both sides appeared to bring serious synergies to the joint venture and it was looking really positive for vCloud Air Network partners to benefit from the joining of both sides features and smarts…that said I’m sure all my VMware mates with VMW stock are happy…but that aside VMware and its partners need vCloud Air to remain strong and for serious development to continue on vCloud Director or else that 90 billion dollar Hybrid market will start to go elsewhere.