Billion dollar question: What gives with EMC? by Barb Darrow @FortuneMagazine August 27, 2015, 12:10 PM EDT E-mail Tweet Facebook Linkedin Share icons The future of storage kingpin EMC and its federation of related companies is unclear to anyone except (perhaps) those in the EMC, VMware, and Elliott Management executive suites. By all accounts, including those of company insiders, many options are on the table including an EMC buyout of the 20% or so of VMware it doesn’t already own, or a reverse merger in which VMware would buy its parent company. Or, if activist investor Elliott Management prevails, EMC could sell its stake in VMware. In any scenario, it’s very likely that long-time EMC chief executive Joe Tucci will cede that title, most likely to David Goulden, the chief executive of the EMC EMC information infrastructure group. EMC has a deep management bench with Howard Elias, who is president and COO of global enterprise service, or Jeremy Burton, who is president of product and marketing. Each could also step in as top dog. But don’t expect Tucci, who is 68 but shows no signs of wanting to retire, to give up the chairmanship. The good news for financial analysts is that EMC’s board now seems to get that something’s got to give to remedy the company’s stagnant share price. From a research note by Wells Fargo analyst Maynard Um: “What we feel is most important is the board’s view that status quo, in an industry that’s changing rapidly, is not an option. We have steadfastly believed that a combined entity would be more powerful from a product portfolio and go-to-market perspective while offering significant synergy benefits.” Of course that is exactly the opposite tack that Elliott Management has been pushing. Last year, Elliott started urging EMC to divest itself of VMware VMW because that company would be more valuable on its own. A standstill agreement between Elliott and EMC expires in September. In his own research note, UBS analyst Steven Milunovich said an EMC acquisition of VMware would afford it the opportunity to rename itself as VMware, which is, after all, a hotter name right now. But face it, while both EMC and VMware are powerhouses within corporate data centers, they each face a huge battle proving that they are definitely in the cloud computing game, whereas Amazon AMZN Web Services has been stealing workloads and Microsoft MSFT has launched a multi-billion-dollar bid to make Azure the cloud of choice for businesses. Meanwhile, the EMC Federation cloud story has been, to put it politely, confusing. In its own words, it “provides the Federation Enterprise Hybrid Cloud Solution—an on-premise private cloud offering that provides on-ramps to public cloud services such as VMware vCloud Air.” Toward that end it’ll be worth watching for what EMC does with Virtustream, the cloud company it acquired earlier this year for $1.2 billion. At that time EMC said that Virtustream would join the EMC Federation as its managed cloud company. VMware periodically proclaims the superiority of vCloud Air, its public cloud response to AWS and Azure, as it did again last week, but in terms of market adoption, it has a long way to go to be mentioned in the same breath with those two cloud giants. It only makes sense that vCloud Air would end up in that cloud entity, as has been rumored. If that happens, EMC (or its federation) could have a coherent cloud story. For more on the cloud landscape and Amazon’s place in it, see the video below. Subscribe to Data Sheet, Fortune’s daily newsletter on the business of technology.