Beer Friday Is Key to VMware’s Acquisition Strategy

Photograph by Ronda Churchill/Bloomberg

VMware CEO Pat Gelsinger, right, employs an acquisition policy that involves not meddling with startup culture.

VMware Chief Executive Officer Pat Gelsinger is not interested in taking away startups’ Friday beer parties.

Preserving small companies’ cultures is a key to successful acquisitions, the former EMC executive said today on a panel at the Economist magazine’s Ideas Economy conference in Berkeley, California.

“Between EMC and VMware, we’ve acquired 80 companies over the past decade or so,” he said. “Most acquisitions fail because you’re trying to grind it into the corporate culture.”

VMware, which makes corporate software including computer-server virtualization tools, has had several opportunities to test Gelsinger’s strategy recently. Palo Alto, California-based VMware, which is majority owned by EMC, has agreed to buy at least seven businesses since the beginning of last year, including Nicira Networks for $1.26 billion.

“Rule No. 1 in acquisitions for us is, ‘Do no harm,’” Gelsinger said. “This is an area where we’ve had great success in acquisitions.”

Gelsinger, who became CEO last September, said beer Friday and bring-your-dog-to-work policies are allowed for newly acquired businesses that want them.

“One company asked if I’d defend their Friday beer policy,” Gelsinger said. “Who cares if they have Friday beer, and the rest of the corporate culture doesn’t support Friday beer? Get over it.”

After EMC acquired Data Domain in 2009, the group was allowed to continue to use its preferred enterprise software, including Salesforce.com, which isn’t widely used at EMC, Gelsinger said in an interview after the panel.

Presumably, the engineers are also free to crack open a Pabst while inputting their customer-relationship-management data, if they so choose.

What do you think about this article? Comment below!