EMC has issued two responses to the letter that investor Elliott Management made public Wednesday calling for the vendor to spin off VMware and/or explore a merger with other large companies.
EMC first released a direct response to the Elliot letter, saying little except to repeat claims that EMC is exploring options but believes its strategy is sound.
An indirect response did a better job of making EMC’s case for keeping its federation of EMC, VMware, RSA, and Pivotal together. That response came today in the form of a release touting its Federation Software-Defined Data Center Solution.
The solution is little more than a combination of products from EMC’s companies with extras such as a self-service portal and scripts to tie them together. But the concept shows how the parts of the EMC Federation work together, testing the products at the federation’s engineering lab on the VMware campus, and putting pieces together to solve distinct data center problems.
Is it a coincidence that the data center solution release came one day after Elliot’s letter to CEO Joe Tucci and the EMC board questioning the value of EMC keeping everything under one umbrella? Bharat Badrinath. EMC’s Senior Director of Global Solutions Marketing, isn’t saying.
“That’s something Joe and the board will determine,” he said of the spinout and merger issue.
Badrinath’s job is pushing products, not mergers. EMC’s solution announcement also provided this list of EMC Federation products brought together as part of the software-defined data center solution:
- Management and Orchestration: VMware vCloud Automation Center, VMware vCenter Operations Management, VMware IT Business Management, EMC Storage Resource Manager
- Hypervisor: VMware vSphere, the industry’s most widely deployed virtualization platform
- Networking: VMware NSX, the network virtualization and security platform for the software-defined data center. VMware NSX brings virtualization to existing networks and transforms network operations and economics
- Storage: Designed for EMC ViPR & EMC Storage, EMC Storage Resource Manager, VMware Virtual SAN.
- Hybrid Cloud Deployment Models: Connectivity to VMware vCloud Air
- Choice of Hardware: Built on converged infrastructure and can be deployed on a variety of hardware including VCE Vblock and VSPEX.
- PaaS: Delivering Platform-as-a-Service with Pivotal CF
- Documented Reference Architectures
The point EMC wants to make is these products from different parts of the federation are intertwined and cannot be broken apart without harm.
“We have four strategically aligned companies which are working together at times, but there are also times when they are independent and operate on their own,” Badrinath said. “Customers can pick products developed independently or together. It’s all about us being better together or bringing the best of the best within the four businesses.”
Other solutions that will follow include Platform-as-a-Service, End-User Computing, Virtualized Data Lake and Security Analytics. Badrinath said they all should be available by early 2015.
Badrinath said the testing for the software-defined data center portion of the program took 40,000-person hours of engineering across federation companies. He also emphasized that EMC and VMware continue to work with outside partners, even if those partners such as Microsoft or other storage vendors compete with federation companies at times.
While the federation’s software-defined data center initiative has been going on for months, the release sounds as if it were put together to counter specific complaints from Elliot. The letter, signed by Elliot portfolio manager Jesse Cohn, said the EMC storage company and VMware “hinder one another” because they compete in areas, and the relationship prevents them from developing other critical relationships. Cohen said EMC’s stock is underperforming, the company is undervalued, and EMC and VMware would both be better off apart.
“As time passes, this untenable situation is going to get worse,” he wrote to EMC.