VMware May Spin Off 'Non-Core' Technology

The rumors about VMware spinning off Cloud Foundry, GemStone and SpringSource into an EMC-based subsidiary are back. If former VMware CEO Paul Martiz heads up the hypothetical organization, it may put VMware and EMC in a much stronger position to compete with rivals in the cloud and virtualization space.

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The rumors about VMware Inc. spinning off all "non-core" VMware technologies into a separate company are back. Cloud Foundry, GemStone and SpringSource, which are all secondary foci for the virtualization company, are set to fall under the control of an EMC Corp.-owned subsidiary. By offloading less critical technologies to a separate stewardship, VMware hopes to focus all of its resources on VMware technology.

The official announcement will reportedly be made sometime next week, according to "familiar sources" quoted by GigaOm. The initial buzz about the spin off started in July, when Pat Gelsinger replaced outgoing CEO Paul Maritz . The platform-as-a-service division, Cloud Foundry, was growing and speculation arose that EMC may spin it into a separate company. Today, rumor has it that the former VMware CEO may play "a key role" in this hypothetical new company, although his position as CEO has not been confirmed.

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Superficially, VMware is shedding some pounds to get back to the basics (vSphere), but reports also seem to suggest that VMware has been unable to sell much more than its core product. With the extra technological responsibilities holding it down, a spin-off is seen as a smart move for both VMware and EMC, VMware's parent company.

With a renewed focus on the heart of what VMware does best, VMware will find itself a more agile company. This will make VMware more competitive in the growing cloud/virtualization marketplace , which is critical for its success as it goes up against rivals like Microsoft, Citrix, Amazon.com and more.

If Maritz does end up playing a major roll at the yet-unnamed spin-off, he is likely to apply the same growth and leadership strategy he used with VMware. This will strengthen EMC position in the virtualization and cloud space while fast-tracking the maturation of the tech within. With two strong pillars under the EMC empire, the corporate trio should be able to deliver a more focused market strategy for all its technologies, which may benefit cloud and virtualization across the entire IT industry.

At the time of this writing, VMware stock has rallied on the rumor, rising to just over $92 per share, a jump of more than 3 percent since the opening bell. Channelnomics sees this as a continuation of VMware's strong fundamentals which continue to drive the company forward.

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