As VMworld 2015 approaches (Aug. 30-Sept. 3, San Francisco), VMware and parent EMC face two lingering questions that need to be answered. Despite EMC's big-picture software-defined strategies and the EMC Federation of businesses, Wall Street remains distracted by lingering ownership and leadership questions.
Amid EMC's challenging search for consistent growth, some Wall Street pundits have called on the storage giant to spin out its VMware ownership. Fast forward to the present, and EMC's board is considering a so-called downstream merger -- in which VMware actually acquires EMC, according to Re/code.
Pat Gelsinger vs. Joe Tucci?
Now here's where things get very interesting. VMware CEO Pat Gelsinger apparently favors a scenario where VMware buys EMC, but EMC CEO Joe Tucci apparently opposes the concept, according to Re/code. EMC and VMware declined comment to Re/code.
The drama doesn't end there. Elliot Management, the activist hedge fund, has been pressuring EMC to spin out VMware, and a standstill agreement between the fund and EMC expires on Sept. 1.
Oh, and the drama doesn't end there. EMC CEO Joe Tucci, who previously pushed off retirement, is apparently working without a contract and Wall Street wants a succession plan sooner rather than later.
Only a few weeks ago, Pivotal CEO Paul Maritz stepped down from his position and indicated that he had no plans to pursue executive management opportunities. Pivotal is an EMC sister company, so Maritz's resignation effectively removes him from consideration for EMC's CEO post.
Casting A Shadow Over VMworld?
No doubt, both VMware and EMC have big product and strategy plans for VMworld. But the lingering ownership and management questions threaten to shift the conference chatter -- and media coverage -- away from core VMware and EMC messaging.
The bottom line? Wall Street despises uncertainty. It's time for EMC to offer clear answers on a succession plan for Tucci. And a potential next-step response to Elliot Management. I wonder if EMC's board plans to craft those answers in time for VMworld...
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