VMware president defends staying public

Carl Eschenbach says staying public means protecting the VMware identity and brand

VMware's president and COO, Carl Eschenbach, has defended the decision to remain publicly traded following Dell's proposed takeover of VMware's parent firm EMC.

On Monday Dell announced a proposed $67bn deal for EMC, which will then become a private company, but VMware is to stay in public hands within the enlarged group.

Dell is already private, following a management buyout by Michael Dell and Silver Lake Partners in 2013. Dell's eponymous leader has since evangelised the merits of going private, during an interview with Bloomberg TV, and said he expects more tech giants will follow his firm's lead.

But VMware, unlike its parent, is not going to follow suit, for the time being at least.

Eschenbach said privatising VMware would create too much debt.

"It's a very complex financial transaction, as you can imagine," he said. "It requires a massive amount of debt. To take VMware private as well it would have to raise 20 per cent more debt. $67bn, do you have a mortgage like that?"

He also said the move represents the most beneficial path for all parties.

"At VMware we have our own identity, our own culture," he said. "We are a young disruptive software-driven technology company, and we don't want to lose that engagement with our ecosystem and our customers. If you look at the arrangements of the transaction, we thought this would be best for everybody. VMware remains publicly traded and now we have the synergies from these two companies."