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Dell Looks to Cloud for Next Chapter Amid VMware Talks

Nico Grant
·2 min read

(Bloomberg) -- Dell Technologies Inc. unveiled software that could burnish its hybrid-cloud aspirations, in the hardware giant’s effort to plot a future beyond a possible spinoff of its most prized asset, VMware Inc.

The product, called Project Apex, will let customers manage information and applications across public clouds and their own data centers, Round Rock, Texas-based Dell said Wednesday in a statement. It will also help customers use the company’s technology based on consumption or through a subscription. The initiative is similar to rival Hewlett Packard Enterprise Co.’s GreenLake product that gives customers a unified view of their information technology environment.

Project Apex gets Dell further involved in the cloud-computing journeys of clients rather than leaving that work to VMware, the software company majority owned by Dell. Both parties continue to negotiate Dell’s possible divestment of its holdings, but any agreement would leave a deep partnership in place.

“We’re not selling VMware, we’re not looking for a buyer,” Chief Executive Officer Michael Dell said during a press conference. “We are exploring taking the shares that Dell Technologies owns and distributing them directly to our shareholders. If we do this, it will simplify our capital structure and as Pat said, unleash value for all shareholders,” he said, referring to VMware CEO Pat Gelsinger. Gelsinger said talks remain at an early stage.

The company has said that any divestment would not take place before September 2021, so that the transaction could be tax-free. While billionaire Michael Dell has spent the last five years expanding his technology empire so that it could move beyond personal computers and servers, he has recently tried to offload assets in an attempt to pay down corporate debt and boost the company’s market value. The company reported $43.6 billion of long-term debt as of July 31.

Since Michael Dell holds about half of his namesake company’s equity, he would personally own a large portion of VMware’s stock if his company divests.

(Corrects name of HPE’s competing offering in second paragraph of story published Oct. 21.)

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