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Elliott Management Sends Letter to Board of Directors of EMC Corporation
Federation Structure No Longer Appropriate
Significant Value Can Be Unlocked Through a Spin-Off of VMware

NEW YORK (October 8, 2014) Elliott Management Corporation (Elliott) today sent a letter to
the Board of Directors of EMC Corporation (NYSE: EMC) detailing its recommendations on the
right path forward for EMC. Elliott believes that EMCs Federation structure obscures enormous
value at the company and that the Board of Directors and Management should pursue pathways
to recognize this value, including a separation of VMware from Core EMC and/or various M&A
opportunities.
Elliott, affiliates of which collectively own or have economic exposure to approximately 2.2% of
the common stock and equivalents of EMC Corporation, is a multi-strategy investment firm with
deep experience investing in public and private companies.
Full text of the letter follows:
October 8, 2014

The Board of Directors
EMC Corp.
176 South Street
Hopkinton, Massachusetts 01748
Attn: Joe Tucci, Chairman & CEO

Dear Joe and Members of the Board:

I am writing to you on behalf of Elliott Associates, L.P. and Elliott International, L.P. (collectively,
Elliott or we), which collectively own 2.2% of the common stock and equivalents of EMC
Corp. (the Company or EMC), making us one of your largest shareholders. We greatly
appreciate the dialogue we have established with Joe and his team and we look forward to
continuing it.
Since the publication of news reports detailing our position, we have received numerous calls
from fellow shareholders requesting our views and sharing theirs. In addition, EMC
management has spoken publicly about their view of the Companys structure. The purpose of


todays letter is to share our thoughts on the right path forward. We hope this will help to inform
Joe and the Board as part of EMCs current review process regarding the long-term value-
maximizing pathway for the Company.
The summary takeaways from our letter, which are more fully described below, are:
- EMCs current structure the Federation obscures enormous value at EMC
- EMC should pursue pathways to recognize this value, including a separation of
VMware from Core EMC and/or various M&A opportunities
Elliott

Elliott is an investment firm founded in 1977 that today manages approximately $25 billion of
capital for both institutional and individual investors. We are a multi-strategy firm based in New
York, active in debt, equities, commodities, currencies and various other asset classes across a
range of industries. Investing in the technology sector is one of our most active efforts at Elliott
and one in which we have built a long track record.

Our approach to EMC is consistent with our approach to many of our current and previous
technology investments. We have conducted extensive research to better understand the
Companys operations and strategy, including working with respected technology and
management consultants to examine the broader storage, data center virtualization, security,
big data analytics and end-user computing landscapes, and EMCs position within those
markets. We have also worked with engineers to examine and assess the capabilities and
competitive positioning of EMCs products and technologies across all of its offerings. Our
efforts during the past year include a survey of over 580 EMC and VMware customers, enabling
us to better understand the storage and data center virtualization landscape from a buyers
perspective and to identify what factors are most important in driving purchasing behavior. We
have also retained senior executives in the storage, data center virtualization and broader
technology marketplaces to advise us on higher-level corporate considerations. We believe this
time- and resource-intensive exercise has given us a strong understanding of the markets in
which EMC participates, as well as a deep appreciation for the Companys competitive
strengths and challenges.

Our Thoughts on EMC

We have grouped our thoughts into the following three categories, which we discuss more
expansively throughout the remainder of this letter:

1. The Federation
2. EMC and the Reality Today
3. The Right Course Forward

It is important that we convey that Joe, for whom Elliott has the highest respect, and his team
deserve immense credit for assembling, integrating and building EMC into what it is today. The
substantial value opportunity we describe in Section 3 is only possible due to the high quality of
the Company and its individual businesses.





The Federation

EMC has developed an incredible set of assets including EMC II, VMware, RSA and Pivotal.
Each of these companies is comprised of acquired and organically developed product offerings
and businesses that by themselves are frequently the best in the industry.

It is well known and has been broadly recognized by those who follow EMC and its markets that
the structure of the Company is unusual: VMware, Pivotal, RSA and EMC II are run as
independent companies. Each of VMware, EMC II and Pivotal is headed by a CEO who reports
to Joe. RSA is headed by a CEO-level executive who reports to David Goulden, EMC IIs CEO
(and, until last week, CFO of EMC). EMC management refers to this arrangement as The
Federation.


The Federation
Joe Tucci: EMC Federation Chairman
and CEO, VMware Chairman; 67
years old
Pat Gelsinger: VMware
CEO and Director,
Former President of
EMC II; 53 years old
David Goulden:
EMC II CEO;
55 years old
Paul Maritz: Pivotal CEO,
Former VMware CEO, Former
EMC Chief Strategy Officer,
VMware Director; 58 years old
Art Coviello: Executive
Chairman of RSA;
61 years old
100%
Public Shareholders
Description: Leader in
data center virtualization
software
Background: Acquired by
EMC in 2004 for $625M
14E Revenue: $6B
14E EBITDA: $2B
Market Cap: $40B
Description: Leader in
enterprise storage systems
Background: Core
enterprise storage business
14E Revenue (excl. RSA):
$17B
Description: Leader in
enterprise security products
Background: Acquired by
EMC in 2006 for $2.0B
14E Revenue: $1B
Description: One of the top IT
vendors of hardware,
software and services to
enterprises
14E Revenue: $25B
14E EBITDA: $7B
Market Cap: $59B
Description: Focused on
Platform-as-a-Service, big
data analytics and agile
software development tools
Background: Formed by
EMC and VMware through
contribution of assets in
2013; GE purchased 10% at
$1.05B valuation in April
2013
14E Revenue: $0.23B
14E EBITDA: ($0.2B)
EMC II (incl. RSA) 14E EBITDA : $5B


The origin of this unorthodox structure is an important part of the story: EMC used to be only
what is now called EMC II, the storage company. Over the years, however, EMC bought
VMware (2004), RSA (2006), and the assets that comprise Pivotal (2009-13), among many
other acquisitions. Joe had the foresight to allow VMware to develop independently as a
separate and distinct company, paving the way for its extraordinary success in server
virtualization and positioning it to enable the virtualization of other components of the data
center.



Much has changed since 2004, though, when VMware was solely a server virtualization
company and EMC was primarily selling high-end storage arrays. Indeed, the correct decision
more than a decade ago is not necessarily the right one for today or for the future.

EMC and the Reality Today

The reality today is that the Federation structure, which may have served EMC well years ago,
no longer does. We have compiled considerable detail to support this conclusion and
summarize our thoughts briefly below:

A. Stock Price Underperformance: EMCs stock price has underperformed its proxy
peers and the market over all relevant timeframes while this structure has been in place.
B. Core EMC is Deeply Undervalued: The Federation structure has led to a widely-
recognized undervaluation of Core EMC (EMC excluding VMware).
C. EMC and VMware now compete: Both EMC and VMware have grown and are now
competing against one another, confusing customers, employees, Street analysts and
shareholders.
D. EMC II and VMware hinder one another: Though separate companies, they are still
together, a fact that inhibits each businesss ability to partner.
E. The Federation and Joes Tenure: Joe is the architect and manager of the Federation.
It is not viable to keep the structure as it stands today beyond his tenure as CEO.

Stock Price Underperformance
Though EMC is a leader in numerous markets with great products, EMCs stock price has
deeply underperformed its proxy peers and the market over all relevant time periods. It is
important to keep in mind that the current structure (EMC + VMware) has existed over the entire
timeframe illustrated below. The below chart highlights EMCs stark underperformance as of
July 18, 2014, the trading day prior to the public disclosure of Elliotts position in EMC.


Ending July 18, 2014
1-Year 2-Year 3-Year 4-Year 5-Year Since VMW Acq.
(1)
EMC Relative Performance
1. EMC versus Proxy Peers
(2)
EMC 7% 10% 3% 37% 98% 96%
Proxy Peers 19% 67% 68% 93% 118% 109%
Over / (under) performance (12%) (57%) (64%) (56%) (20%) (14%)
2. EMC versus NASDAQ
EMC 7% 10% 3% 37% 98% 96%
NASDAQ 24% 55% 67% 114% 150% 139%
Over / (under) performance (17%) (45%) (64%) (78%) (52%) (43%)
3. EMC versus S&P 500 Information Technology
(3)
EMC 7% 10% 3% 37% 98% 96%
S&P 500 Information Technology 29% 46% 64% 98% 128% 114%
Over / (under) performance (22%) (36%) (61%) (62%) (31%) (18%)
No te: Repres ents to tal returns including dividends
(1) Since EMC clo s ed o n its acquis itio n o f VMware o n J anuary 9, 2004
(2) P ro xy P eers include ACN, ADBE, CA, CSCO, CSC, EBAY, HP Q, INTC, IBM, MSFT, NTAP , ORCL, STX, SYMC, and XRX
(3) S&P 500 Info rmatio n Techno lo gy is the s to ck index us ed by EMC in ranking its relative to tal s hareho lder return (TSR) fo r management co mpens atio n purpo s es
(s pecifically, ves ting thres ho lds fo r the 2014 LTIP s to ck units )


On the right side of the above chart, we include underperformance since the VMware
acquisition. These numbers are astonishing EMCs stock has materially underperformed its
peers and the market since the VMware acquisition, despite that purchase bringing EMC over
$32 billion of value (VMware has a $40 billion market cap and EMC owns 80% of it). The driver
of this underperformance is EMCs unusual corporate structure and the damaging valuation
impact it has on Core EMC.

The Federation structure also adversely impacts VMware, a leader in server virtualization and a
would-be leader in virtualizing storage. Many in the industry believe VMware should have
created and dominated the software-defined storage market by this point had it not been owned
by a storage hardware company.

Core EMC is Deeply Undervalued
Elliott is hardly alone in pointing out that Core EMC is significantly undervalued. This problem
has been widely reported and discussed, yet it has gone unaddressed for years.

The undervaluation is staggering: Prior to the disclosure of Elliotts position in EMC on July 21,
2014, Core EMC traded at just ~3x 2015E EBITDA and ~8x 2015E P/E. Those metrics are
incredibly cheap on any basis but especially so when you consider that NetApp, Core EMCs
closest peer, currently trades at ~6x 2015E EBITDA and ~13x 2015E P/E, a premium to Core
EMC of ~80% and ~70%, respectively. This is even despite the fact that Core EMC is the
market leader in storage with such attractive assets as VNX, Data Domain, Isilon, XtremIO,
RSA and Pivotal (all of which are included in Core EMC). Core EMC, if it traded as a
standalone company, would undoubtedly trade at a premium to NetApp.


The discount serves no ones benefit not shareholders, not employee-shareholders and not
the executives trying to run the company. Heres a brief sampling of what independent
observers have said:

In fact, at current price we believe investors are getting core EMC ($16B sales, 20% Op
margins, $1.35 EPS) for FREE as EMCs price reflects value of: VMW ($15.85), Emerging
storage ($6.24), RSA ($2.99), Pivotal ($1.71) and Cash on hand ex-VMW ($1.21). Should core
EMC get valued close to NTAP, it would add an incremental ~$10 to EMC's stock RBC
Capital Markets (10/7/14)

The case for a VMware spinoff is straightforward, more compelling if combined with
cash. Based on our SOTP, core EMC remains undervalued, trading on P/E of 9x versus the IT
Enterprise/Hardware sector of 12x, despite superior growth and technology positioning
potential Credit Suisse (7/24/14)

[O]ngoing lackluster relative share performance should leave us / investors to question (or
pressure) EMCs willingness to do something else to unlock value [] (e.g., consideration for
any distribution of VMware shares to EMC shareholders). [] [W]e believe the current
valuation warrants EMC management to provide investors with a better understanding of how
the company plans to unlock what appears to be a very discounted EMC Information
Infrastructure valuation Stifel Nicolaus (1/12/14)

Core EMC getting no respect. 4 years with no gains? Core EMC has been essentially
flattish over a 4 year horizon, suggesting all gains in EMC shares over the last 4 years have
come from appreciation in VMW stockISI (1/29/14)

EMC II and VMware Now Compete
Management continually states that EMC II and VMware are better together. But this
sentiment is at odds with the reality that the Federation keeps the two companies in a sort of
limbo where they are together but not really. The Federation has actually created the worst of
both worlds: EMC II and VMware are not together enough to have completely joint
infrastructure, development and go-to-market capabilities, or to eliminate confusion
among customers, employees and investors. However, they are together enough to
create damaging competitive dynamics and to hinder essential third-party partnerships.

At the time of VMwares acquisition and for years afterward, EMC II, composed primarily of
EMCs storage business, and VMware competed in different worlds: EMC II sold sophisticated
storage hardware and VMware sold software that virtualized servers.

Over time, however, as VMware saturated the server virtualization market, it began to consider
its next growth driver. Storage virtualization was a clear choice. At the same time, EMC II, a
vendor of storage hardware platforms (and the software that runs on top of them), began
developing its own software-defined storage platforms.

Today, EMC II and VMware are completely at odds. In fact, we have heard from many in the
industry (including former EMC and VMware employees) that they would have been at odds
long ago but that VMware was slow to enter the storage market because it was owned by a
storage hardware company. Regardless, they are now competing, a fact that EMC
management concedes:



[T]here's aspects of software-defined storage that Pat's [VMwares] doing, that David's [EMC
IIs] duplicating, or David's doing that Pat's duplicating, depending on how you want to look at
it Joe Tucci, EMC CEO and Chairman

So the confusion between [ViPR and vSAN] is the ViPR block data service, which is based on
ScaleIO, and vSAN, those 2 are storage systems which do similar things Jeremy Burton,
EMC President of Products & Marketing

We [EMC and VMware] both partner and compete in SDS [software-defined storage] Chad
Sakac, EMC SVP

Even VMwares recent 10-K acknowledges this growing competition: EMC could assert control
over us [VMware] in a manner which could impede our growth or our ability to enter new
markets or otherwise adversely affect our business and [t]here can be no assurance that EMC
will not engage in increased competition with us in the future.

EMCs response to this obvious problem has been to say that they like the competition and
overlap:

Will there be some overlap [between EMC and VMware]? I hope so. I hope so. Because if you
leave seams, that's where our competitors go through Joe Tucci, EMC CEO and Chairman

But, anyway, there's not as much joint development as you think [between EMC and VMware].
As a matter of fact, it's very little. I would rather see a little bit of overlap than trying to get these
seams perfect Joe Tucci, EMC CEO and Chairman

Unfortunately, this no seams rationalization isnt working and is causing confusion among
employees, customers, Street analysts and shareholders. The marketing messages are
different and the products are competitive its unclear and is helping neither company:

They should not be developing competing products, since they are, they should be
separate so they can develop the best for their consumers EMC & VMware customer

Originally, it made sense to keep VMware and EMC together. But now there are competing
products. It is time to separate the two companies Former EMC employee

We are in phase 2 of the VMware life cycle. Tucci's decision not to spin it completely off 7 years
ago was appropriate at the time in order to continue to help VMware grow in server
virtualization. Now there are competing productsits time to spin off Former EMC
employee

Our view is that over time vSAN will create some challenges for traditional storage
vendors, including EMC. We believe that as the product matures there is a risk of conflict with
many of VMwares traditional storage partners. In particular, it will be interesting how EMC
manages this conflict as there will clearly be sales overlap and competition between EMC
and VMware. In fact, we believe that the EMC parent may have two sales forces competing
against each other. Barclays (7/21/14)

As part of our extensive diligence on EMC, Elliott commissioned a leading management
consulting firm to conduct a survey of 287 EMC customers and 298 VMware customers. Below
are the results:


Source: EMC and VMW customer survey
Q: How would a complete
separation impact your spending
levels on EMC storage products?
Q: How would a complete separation
impact your spending levels on VMW
virtualization products?
Q:Which of the following best
describes your view on a complete
separation of EMC and VMW?


They should not be developing competing products, since they are, they should be
separate so they can develop the best for their customers EMC & VMware customer

Both companies could benefit from this divorce EMC & VMware customer

The decision to keep VMware affiliated but still separate as part of the Federation was right for
its time. However, it is abundantly clear that this is no longer the case. As time passes, this
untenable situation is going to get worse.

EMC II and VMware Hinder One Another
This together but not really structure has damaging consequences far beyond just their
competition in the storage market the structure is hindering critical relationships that Core
EMC and VMware need to maintain to advance their presence in their markets, as well.

For example, service providers are one of EMC IIs fastest growing verticals and EMC IIs
relationship with these customers is critical, particularly as the storage customer base
consolidates with more traditional enterprise customers turning to these telcos for cloud storage
offerings. However, VMware is directly competing with those customers through its vCloud Air
offering, a hybrid cloud service built, owned, operated and supported by VMware through eight
data centers globally. We have heard repeatedly that this new source of competition has
recently become an issue for EMC IIs telco customers, who now have their storage vendors
affiliate competing against them in cloud services. This competition can be damaging to EMC II,
as the CEO of NetApp pointed out, [W]e actually looked at should NetApp become a service
provider and realized that a large number of these customers, these cloud providers, were our
customers. So we felt like it was much more effective for our business to be a pure play. We
have no intent to become a service provider ourselves.



EMC II also needs to maintain strong partnerships with networking providers like Cisco, with
whom they partner to sell converged infrastructure offerings (integratedi solution of storage,
networking and servers). The Cisco relationship, for example, was nearly fatally damaged when
VMware entered the networking market through its acquisition of Nicira. EMC II did not benefit
from VMwares Nicira acquisition but did suffer significant damage to its Cisco partnership as a
result.

VMware has substantial potential in storage and networking virtualization, attractive markets
that are complementary to its pioneering success in server virtualization. We believe VMware is
the natural player to dominate these opportunities, but both established and upstart competitors
are also vying for share. In order to achieve the same level of ubiquitous success it has in
server virtualization, VMware needs to be the partner of choice at IBM, HP, Cisco, Dell and
others. Being together but not really with EMC II, a direct competitor to many of those
companies, is harmful to these critical efforts.

Though the Federation strategy for EMC and VMware does not work and cannot be continued,
the two companies can easily continue their partnership after a separation. Indeed, VMware
need not be owned by EMC in order for the companies to work together. For example, we note
that there is a reseller relationship between EMC and VMware, which, per VMwares 10-K,
brought in $141 million last year (less than 3% of VMwares revenue). This relationship and any
revenue generated by EMC for VMware could certainly be maintained through a close reseller
and technology partnership (as often occurs among enterprise IT companies). Other non-
revenue generative strategic benefits could also be achieved through technology sharing and
partnerships, as also happens frequently in the IT industry.

The Federation and Joes Tenure
Elliott has enormous respect for Joe and looks forward to continuing our dialogue with him, his
team and the Board as we convey the views of EMCs shareholder base on this issue. As
illustrated above, Joe is the CEO of EMC Corp., the holding company for the Federations
assets. Reporting to Joe are David Goulden, Pat Gelsinger and Paul Maritz. Art Coviello, the
head of RSA, reports to David Goulden, because RSA is part of EMC II. These men are well-
respected, CEO and CEO-caliber executives who are paid like CEOs, who are industry leaders,
who can leave to go elsewhere, and, yet, who still report to another CEO.

This highly unique and tenuous structure is only tenable under Joes active leadership as CEO.
Joe is the Federations architect and its leader: There is only one Joe and he is not
substitutable.

As Joe and the rest of the Board evaluate the path forward, we believe it is critical for the Board
to fully appreciate that it cannot retain a structure that doesnt work without one specific
individual. The most important thing a Board does is succession planning and preparation to
retain a bespoke structure dependent upon one very unique individual is not the correct
decision. It may hang together while Joe is still the active CEO, but it will not work beyond him.

The Right Course Forward

It is clear to us that the Federation is not the right structure for EMC and that from shareholder-
value, operational and financial perspectives, there are better alternatives. We believe the
alternatives fall into two main categories:

A. Spin-off of VMware from EMC


B. M&A Opportunities for EMC

Spin-off of VMware from EMC
A tax-free spin-off of all of VMware from EMC would result in EMC distributing its VMware
shares to its current EMC shareholders. Post-transaction, current EMC shareholders would own
both their existing EMC stock and stock in a newly independent VMware. For example, a
shareholder who currently holds 100 shares of EMC would own the following after a spin-off of
VMware: i) their same 100 shares of EMC (now Core EMC) and ii) approximately 17 shares of
VMware. Thus, this shareholder would receive continued benefits from both Core EMC as well
as from VMware. Immediately and over the longer-term, we believe such a separation creates
financial and operational benefits that are extremely meaningful.

EMC owns great assets, but shareholders and management are not realizing the value they
should from the highly attractive businesses within EMCs holding company structure. The
potential for a separation has often been discussed, and the benefits from a value standpoint
are enormous. The sum-of-the-parts valuation is meaningfully higher than EMCs current stock
price and represents a significant opportunity to drive a substantial increase to shareholder
value by adjusting the Federation structure.

We have modeled our assumptions below and discuss them here. First, we believe it is beyond
debate that EMC II would trade at a premium to NetApp. EMC II is the market leader in storage
and has coveted assets such as Data Domain, Isilon, RSA and XtremIO that NetApp does not.
Second, we believe that VMware, at its current valuation of 14-15x Enterprise Value/2015E
Unlevered Free Cash Flow, is trading inexpensively given the companys growth profile.
Though we dont model it below, we believe that as an independent company with the
opportunity to more freely partner and more aggressively invest in software-defined storage,
VMware would have the opportunity to grow faster and be worth more.

In order to realize the intrinsic sum-of-the-parts value of EMC, a tax-free spin-off could be
initiated immediately. However, the opportunity for shareholder value creation does not stop
there. Core EMC is a slower-growth but extremely stable company, and its capital structure
should reflect this reality. Once VMware is separated, we believe Core EMC can and should
add leverage to repurchase stock. Core EMC could easily repurchase 20% of its stock while
retaining sufficient cash to do growth-additive M&A. In the below analysis, we show the highly
positive impact that a buyback would have on Core EMCs stock price, post-spin, even after its
valuation multiple has meaningfully increased from its implied level today as you can see, the
value accretion is highly attractive:
















VMware Spin-off and Share Buyback Analysis

($ in millions, except per share data)
Stock Repurchase for Core EMC
(1)
$9,000
(/) Core EMC Buyback Stock Price
(2)
$20.98
Shares Repurchased (M) 429
PF EMC II (incl. RSA) 2015E EPS
(3)
$1.83
P/E Multiple
(4)
13.0x
EMC II (incl. RSA) Value Per Share $23.74
Pivotal Value Per Share to Core EMC Shareholders
(5)
0.83
Core EMC Share Price
(6)
$24.57
EMC-Owned Portion of VMware's Market Cap
(7)
$31,960
EMC Diluted Shares Oustanding
(8)
2,065
VMware Value Per EMC Share $15.48
Total Value to EMC Shareholders $40.05
Share Price Prior to Elliott (7/18/14) $26.98
Upside (%) 48%
So urce: Ellio tt es timates , Co mpany filings , Blo o mberg, Capital IQ
No te: Co re EMC includes Info rmatio n Sto rage, Info rmatio n Intelligence, P ivo tal and RSA
(1) Funded by $ 4.8B o f new debt (pro fo rma leverage o f 2.0x), $ 2.7B o f US cas h and $ 1.5B repaid
interco mpany lo an. Co re EMC will generate o ver $ 3.3B o f free cas h flo w per year with the additio nal
interes t expens e.
(2) Repurchas e P rice repres ents 6.75x 2015E EMC II EBITDA o f $ 5,605M plus $ 1.3B valuatio n fo r Co re
EMC's 62% interes t in P ivo tal bas ed o n a 7x 2015E Revenue valuatio n and includes repayment o f
$ 1.5B interco mpany lo an in Co re EMC cas h balance.
(3) P ro fo rma fo r buyback. As s umes interes t rate o n cas h o f 0.5% and o n debt o f 3.75%.
(4) In line with NetApp's current P /E multiple o f 13x as o f 10/6/14 fo r co ns ervatis m.
(5) Repres ents Co re EMC's 62% interes t in P ivo tal at 7x 2015E revenue, which is a co ns ervative
as s umptio n given P ivo tal co uld IP O at a 10x fo rward revenue multiple bas ed o n certain co mparables .
(6) Additio nal ups ide po tential as s o ciated with s ale o f Co re EMC to s trategic buyer after s pin-o ff.
(7) Repres ents market value o f EMC's 80% interes t in VMware as o f 10/6/14.
(8) Us es treas ury s to ck metho d bas ed o n To tal Value to EMC Shareho lders s hare price.


Elliott recognizes that there are other mechanisms to accomplish a separation of Core EMC and
VMware which also drive meaningful stock price upside. One of these mechanisms is a split-off
whereby EMC shareholders are given the option to exchange their shares for VMware shares at
an attractive exchange ratio (which effectively enables the Company to use VMware stock as
currency to repurchase EMC shares in a tax-free fashion). The above analyses contemplate a
spin-off, but the benefits of a split-off are also compelling.

Whatever the mechanism used for a separation, both Core EMC and VMware would retain their
significant strategic value. Core EMC contains spectacular assets, making the company highly
attractive to numerous strategic buyers. After a tax-free spin or split of VMware, Core EMC
could be acquired on a tax-free basis, an outcome that would result in even greater value to
shareholders than the value illustrated in the analysis above. We believe this is the likely
outcome as we have a well-founded understanding that Core EMC is a strategically attractive
asset to a number of parties.


M&A Opportunities for EMC
As has been long speculated, EMC and its assets are attractive to a number of parties in the
broader enterprise IT landscape. Since the announcement of Elliotts position in EMC, we have
learned of acquisition interest in EMCs assets on the part of several large companies that make
strategic sense and which involve parties that could both afford to acquire the EMC Federation
as a whole or distinct assets within the Federation, and could also successfully integrate these
acquisitions. An acquisition of EMC by any of these buyers would create the leading enterprise
IT company in the world, selling every component of the data center and a dominant converged
infrastructure offering. It would be a highly attractive outcome for both the acquiring company
and EMC, as well as for the combined companys shareholders.

We believe that it makes sense for EMC to fully explore acquisition interest (and to do so in a
way that preserves the option of a tax-free spin-off of VMware) and we understand that much of
that work is ongoing. Elliott would be supportive of a value-creating transaction that would allow
current EMC shareholders to continue to benefit from the upside of a combined EMC and
acquirer company. Additionally, we believe it may be advantageous for EMC to pursue a spin-
off of VMware while evaluating these other options. Announcing and pursuing a spin-off does
not preclude an M&A pathway.

Now is a Great Time

We believe now is not only a great time but the optimal time for EMC to establish a future
structure that makes financial and strategic sense for the long term. Whether through a tax-free
spin-off of VMware or through M&A, the options are compelling due to the incredible quality of
EMCs assets. Regardless of which path is chosen, the conclusion is clear to us as it is to
many that the current Federation structure is not right for EMC or its shareholders.

We hope that you find these perspectives and observations useful. Elliott has spent a
considerable amount of time diligencing and developing these ideas, and I personally believe in
their merits.

I want to reiterate the tremendous amount of respect we have for Joe and his team and for what
the Company has accomplished.

Thank you very much for the time and consideration.

Best regards,




Jesse Cohn
Portfolio Manager


About Elliott Management Corporation
Elliott Management Corporation manages two multi-strategy hedge funds which combined have
more than $25 billion of assets under management. Its flagship fund, Elliott Associates, L.P.,


was founded in 1977, making it one of the oldest hedge funds under continuous management.
The Elliott funds' investors include pension plans, sovereign wealth funds, endowments,
foundations, funds-of-funds, high net worth individuals and families, and employees of the firm.
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