VMware Inc. is making Dell Technologies Inc. fat and happy. The acquisition is paying off generously, generating 10 percent of Dell’s revenue and more than 50 percent of its free cash flow. But how long can Dell ride the gravy train, especially with some question marks remaining in VMware’s cloud journey?

Without a doubt, founder and Chief Executive Officer Michael Dell made a razor-sharp business decision when he bought VMware, according to Dave Vellante (@dvellante), co-host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio.

“It goes down in history as one of the greatest trades ever,” Vellante said. 

Analysts’ previous speculations that he might sell the company seem rather silly at this point. It is a fine card to be holding, to be sure, but even good cards can be poorly played. How will Dell get the most from VMware? And should VMware’s fortune’s change, what does that mean for Dell? 

Vellante spoke with cohosts John Furrier, Stu Miniman and Lisa Martin during the VMworld conference in Las Vegas. They discussed the outcomes of the acquisition and VMware’s future direction. (* Disclosure below.)

With NSX, VMware hurries to keep up with cloud

When Dell and EMC merged, from afar it looked like two clunky hardware companies throwing their stuff together for some indeterminate reason.

“The big concern we had is the impact of cloud,” Miniman  said. “Well, OK. They’ve got VMware over there and they’ve got Pivotal, but Dell’s just going to be a boring infrastructure company with server, network and storage.” But VMware’s NSX virtualized networking is helping to send out a surprisingly resonant multicloud message for the company, Miniman added.

That said, VMware needs to push out more new innovation to keep pace with the market, according to Furrier. “VMware has to start pumping out really strong products and technologies that the customers are going to buy,” he said.

VMware’s partnership with Amazon Web Services Inc. continues to evolve, with the announcement of Amazon Relational Database Service, on-prem generating a lot of buzz. It addresses the reality that most customers can’t snap their fingers, make their data centers disappear and go all-in on cloud. Still, the question looms: Will AWS eventually seduce tons of VMware customers away from virtualization and deeper into cloud?

“I think it’s a one-way trip to the cloud in a lot of instances,” Furrier said. If this occurs, it will be interesting to see how VMware and Dell adapt.

Here’s the complete analysis, part of SiliconANGLE’s and theCUBE’s extensive coverage of the VMworld conference. (* Disclosure: VMware Inc. sponsored coverage of VMworld, and some segments on SiliconANGLE Media’s theCUBE are sponsored. Sponsors have no editorial control over content on theCUBE or SiliconANGLE.)

Photo: VMware