Report: HP's Main Goal In EMC Merger Talks Was Getting Access To VMware

When Hewlett-Packard was negotiating with EMC about a potential merger of equals, it was mainly focused on getting access to VMware and its portfolio of virtualization software, Re/Code reported Monday, citing unnamed sources.

VMware and HP are both entrenched denizens of the data center and share many of the same partners, so there's a great deal of kinship between the vendors.

VMware, which is 80 percent owned by EMC, sells server, storage and networking virtualization software. HP saw VMware as an ideal complement for its hardware, services and networking business, and as a way to stay ahead of its data center competitors, according to Re/Code's report. Both EMC and HP have refused to comment on the reports of a potential merger between the two companies.

HP and VMware already offer products that blend their respective technologies. HP sells a Converged Systems product that's bundled with VMware's vSphere with Operations Management software (vSOM), and sources told CRN last month the vendors are planning to further integrate that product and sell it as a single product SKU.

[Related: HP And VMware Teaming Up On Converged, Hyper-Converged Systems To Keep Cisco At Bay]

David Powell, vice president of TekLinks, a Birmingham, Ala.-based VMware partner, isn't surprised to hear that HP is interested in VMware.

"As the market moves towards software-defined everything, adding VMware and its high margin server, storage and networking software products would have been a good hedge for an equipment manufacturer like HP," Powell told CRN.

HP and EMC negotiated for about a year but were unable to come to terms on the proposed merger, and some reports have indicated that talks aren't likely to be revived.

PUBLISHED SEPT. 23, 2014