EMC was quick to assures shareholders and users that its intended sale of 10% of VMware's shares in an initial public offering (IPO) is not a prelude to it giving up ownership in the virtualisation company.
EMC announced yesterday that is will sell about 10% of the shares but will retain ownership of the remaining VMware shares and has no intention of spinning out or otherwise divesting this ownership interest.
VMware is a wholly-owned subsidiary of EMC.
Joe Tucci, chairman, president and CEO at EMC, says: "VMware is one of the fastest-growing businesses in the history of the software industry. We expect the IPO to unlock more of VMware's value for EMC shareholders while also strengthening its ability to retain and attract the software industry's top talent."
VMware had record sales in 2006, growing revenues 83% to $709-million. It finished the fourth quarter of 2006 with year-over-year revenue growth of 101%, delivering accelerating year-over-year growth for the fifth consecutive quarter.
Diane Greene, VMware president and EMC executive vice-president, says: "VMware has secured its leadership position in the virtualisation market through industry-leading and award-winning products.
"Our focus on people, innovation, and the customer adoption of our products has enabled us to continue to grow our company and deliver significant value.
"We expect that the IPO will help us execute on our vision of an industry standard virtual infrastructure. It should enable us to accelerate our ability to find and attract great people, continue to invest in great product development, and grow an even stronger partner ecosystem."
The IPO is not expected to have a material impact on EMC's 2007 business outlook. VMware will be a publicly traded entity upon completion of the transaction.