VMware, Inc. 3401 Hillview Avenue Palo Alto, California 94304, USA Prospectus for the public offer of 4,108,440 shares of VMware, Inc. Class A common stock each with a par value of $0.01 under the VMware, Inc. Amended and Restated 2007 Employee Stock Purchase Plan to the employees of the European Economic Area subsidiaries of VMware, Inc. March 24, 2017 International Securities Identification Number (ISIN): US9285634021 German Securities Code Number (Wertpapier-Kenn-Nummer): A0MYC8 Committee on Uniform Security Identification Procedures Number (CUSIP): 928563402 TABLE OF CONTENTS Prospectus Summary ............................................................................................................................................... 4 Prospektzusammenfassung ................................................................................................................................... 14 Risk Factors .......................................................................................................................................................... 26 General Information .............................................................................................................................................. 45 Responsibility for Contents of the Prospectus ........................................................................................ 45 Subject Matter of the Offering ................................................................................................................ 45 Forward-Looking Statements ................................................................................................................. 45 Currency References ............................................................................................................................... 45 Documents Available for Inspection ...................................................................................................... 45 The Offering .......................................................................................................................................................... 46 Information Concerning the Shares to be Offered .................................................................................. 46 Transferability......................................................................................................................................... 46 Administration of the Plans .................................................................................................................... 46 The Offering under the ESPP ................................................................................................................. 47 Reasons for the Offering and Use of Proceeds...................................................................................................... 50 Purpose of the ESPP ............................................................................................................................... 50 Proceeds and Use of Proceeds ................................................................................................................ 50 Dilution ................................................................................................................................................................. 51 Dividend Policy .................................................................................................................................................... 52 Capitalization ........................................................................................................................................................ 53 Capitalization and Indebtedness ............................................................................................................. 53 Working Capital Statement ..................................................................................................................... 55 Selected Consolidated Financial Data ................................................................................................................... 56 Legal, Arbitration and Administrative Proceedings .............................................................................................. 57 Shareholdings and Stock Options of Members of the Administrative, Management and Supervisory Bodies..... 58 General Information on VMware .......................................................................................................................... 60 Company Name ...................................................................................................................................... 60 General Information about VMware, Inc. and its Business .................................................................... 60 Auditors .................................................................................................................................................. 61 Description of the Securities ................................................................................................................................. 62 Type and the Class of the Securities being Offered, including the Securities Identification Code ......... 62 Stock Repurchase Programs ................................................................................................................... 62 VMware Shares Repurchased for Tax Withholdings .............................................................................. 63 Legislation under which the Securities have been Created/Regulation of the Shares............................. 63 Form of Securities, Name and Address of the Entity in Charge of Keeping the Records ...................... 63 Commission ............................................................................................................................................ 63 Currency of the Securities Issue ............................................................................................................. 63 Rights attached to the Securities ............................................................................................................. 63 2 Change of Shareholders’ Rights ............................................................................................................. 65 Transferability......................................................................................................................................... 66 Applicable Squeeze-Out and Sell-Out Rules .......................................................................................... 66 Stock Based Compensation Plans ........................................................................................................... 66 Information on the Governing Bodies of VMware ............................................................................................... 68 VMware’s Directors as of the Date of this Prospectus ........................................................................... 69 VMware’s Executive Officers as of the Date of this Prospectus ............................................................ 71 Good Standing of Directors and Executive Officers............................................................................... 73 Any Arrangement or Understanding with Major Shareholders pursuant to which a Director of VMware was selected as a Member of the Board .................................................................................................. 73 Potential Conflicts between any Duties to the Issuer of Directors or Executive Officers of VMware and their Private Interests and/or Other Duties .............................................................................................. 73 Disposal Restrictions agreed by the Company’s Directors and Officers ................................................ 76 Taxation in Austria................................................................................................................................................ 77 Taxation in Bulgaria.............................................................................................................................................. 78 Taxation in France ................................................................................................................................................ 79 Taxation in the Federal Republic of Germany ...................................................................................................... 81 Taxation in Ireland ................................................................................................................................................ 82 Taxation in the United Kingdom ........................................................................................................................... 83 Recent Developments and Outlook ....................................................................................................................... 85 Recent Developments ............................................................................................................................. 85 Trend Information ................................................................................................................................... 85 Outlook ................................................................................................................................................... 85 Signature S-1 Page…………………………………………………………………………………………… 3 PROSPECTUS SUMMARY Note to the reader Summaries are made up of disclosure requirements known as “elements.” These elements are numbered in Sections A – E (A.1 – E.7). This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of “not applicable” together with a short explanatory statement. Section A. — Introduction and Warnings A.1 This summary should be read as an introduction to the prospectus. Any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor. Where a claim relating to the information contained in the prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states of the European Economic Area (“EEA”), have to bear the costs of translating the prospectus before the legal proceedings are initiated. Civil liability attaches to those persons who have assumed responsibility for the contents of the summary or presented the summary including any translations thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, the required key information. A.2 Use of the Not applicable. The issuer has not consented to the use of the prospectus for prospectus for subsequent resale or final placement of securities. subsequent resale or final placement of securities by financial intermediaries. Section B — Issuer B.1 Legal and The legal and commercial name of the issuer is VMware, Inc. References in this Commercial summary to “VMware” or the “Company” means VMware, Inc. and its consolidated Name of the subsidiaries, unless the context indicates otherwise. Issuer B.2 Domicile and VMware is a corporation incorporated and existing under the laws of Delaware. Legal Form of VMware’s principal offices are located at 3401 Hillview Avenue, Palo Alto, VMware, the California 94304, USA. The Company incorporated in Delaware in 1998 and is Legislation registered with the Delaware Department of State, under registration number under which 2853894. the Issuer operatesand its Country of Incorporation B.3 Description of VMware pioneered the development and application of virtualization technologies the Nature of with x86 server-based computing, separating application software from the VMware’s underlying hardware. By its own assessment, VMware is a leader in virtualization current and cloud infrastructure solutions that enable businesses to transform the way they Operations build, deliver and consume information technology (“IT”) resources in a manner that and its is based on their specific needs. VMware creates solutions that enable digital principal transformation for its customers as they transform their applications, infrastructure Activities and and devices for their future business needs. identification Over the years, the Company has increased its product offerings beyond compute of the virtualization to include offerings that allow organizations to manage IT resources principal 4 markets in across private clouds and complex multi-cloud, multi-device environments by which the leveraging synergies across three product categories: Software-Defined Data Center issuer (SDDC), Hybrid Cloud Computing and End-User Computing (“EUC”). VMware’s competes portfolio supports and addresses the four key IT priorities of its customers: modernizing data centers, integrating public clouds, empowering digital workspaces and transforming security. VMware incorporated in Delaware in 1998, was acquired by EMC Corporation (“EMC”) in 2004 and conducted its initial public offering (“IPO”) of its Class A common stock in August 2007. Effective September 7, 2016, Dell Technologies Inc. (“Dell”) acquired EMC. As a result, EMC became a wholly owned subsidiary of Dell and VMware became an indirectly held, majority-owned subsidiary of Dell. As of December 31, 2016, Dell controlled approximately 82.8% of the Company’s outstanding common stock, including 38 million shares of its Class A common stock and all of the Company’s Class B common stock, and VMware is considered a “controlled company” under the rules of the New York Stock Exchange. On October 25, 2016, the Company’s Board of Directors approved a change to VMware’s fiscal year from a fiscal year ending on December 31 of each calendar year to a fiscal year consisting of a 52- or 53-week period ending on the Friday nearest to January 31 of each year to align with Dell’s. The change in VMware’s fiscal year was effective January 1, 2017. As a result of the change, VMware had a transition period that began on January 1, 2017 and ended on February 3, 2017, and VMware’s first full fiscal year under the revised fiscal calendar began on February 4, 2017 and will end on February 2, 2018. VMware plans to include its unaudited financial statements for the approximately one-month transition period in the Company’s Quarterly Report on Form 10-Q filed for the fiscal quarter ended May 5, 2017. Total revenue in 2016 increased 8% to $7,093 million. Total revenue is comprised of license revenue of $2,794 million and services revenue of $4,299 million. While sales of the Company’s VMware vSphere (“vSphere”) product have remained strong, the majority of the Company’s license sales originate from products and services solutions across its portfolio beyond VMware’s compute products. The Company continues to experience growth in sales of VMware NSX (“NSX”), the Company’s network virtualization solution, VMware vSAN (“vSAN”) products, the Company’s VMware vCloud Air Network offering and the Company’s EUC solutions. Revenue by geographic area for the years ended December 31, 2016, 2015 and 2014 were as follows (table in millions): For the Year Ended December 31, 2016 2015 2014 United States $ 3,588 $ 3,311 $ 2,912 International $ 3,505 $ 3,260 $ 3,123 Total $ 7,093 $ 6,571 $ 6,035 B.4a Recent Trends The virtualization, cloud computing, end-user computing and software-defined data center industries are inter-related and rapidly evolving, and the Company faces intense competition across all the markets for its products and services. The Company faces competition from, among others, providers of public cloud infrastructure and SaaS-based offerings. As businesses increasingly utilize public cloud and SaaS-based offerings, they are building more of their new compute workloads off-premises and may also shift some of their existing workloads. As a result, the demand for on- premises IT resources is expected to slow, and the Company’s products and services will need to increasingly compete for customers' IT workloads with off-premises public cloud and SaaS-based offerings. The Company also faces competition from large, diversified enterprise software and hardware companies, companies offering competing platforms based on open source technologies, other industry alliances and its partners and members of its developer and technology partner ecosystem. The Company believes that the key factors in its ability to successfully compete include the level of reliability, interoperability and new functionality of its product and service offerings; the ability of its product offerings to support multiple hardware 5 platforms, operating systems, applications frameworks and public cloud platforms; its ability to anticipate customer needs in rapidly evolving markets for IT resources; the pricing of its product and service offerings; the ability to integrate open source technologies that are critical in private and public cloud computing architectures; the ability to attract and retain key employees; and the ability to maintain and expand its ecosystem of technology partners, service providers and sales channel partners. B.5 Organizational Not applicable, because information regarding the organizational structure of Structure VMware is not required to be provided elsewhere in the prospectus. B.6 Interests in Not applicable, because information regarding VMware’s capital structure is not VMware’s required to be provided elsewhere in the prospectus. Capital B.7 Selected The following selected financial data is derived from the Company’s audited Financial consolidated financial statements for the fiscal years ended December 31, 2016, Information December 31, 2015 and December 31, 2014 as published in the Company’s Annual regarding Report on Form 10-K for the fiscal year ended December 31, 2016 which can be VMware and accessed as described in the section “Documents Available for Inspection” of this subsequent prospectus. The Company’s consolidated financial statements were prepared in material accordance with accounting principles generally accepted in the United States of changes America (“GAAP”). Table in millions, except per share amounts, and shares in thousands For the Year Ended December 31, 2016 2015 2014 Summary of Operations: Revenue: License $ 2,794 $ 2,720 $ 2,591 Services $ 4,299 $ 3,927 $ 3,444 GSA Settlement $ - $ (76) $ - Total revenue $ 7,093 $ 6,571 $ 6,035 Operating income $ 1,439 $ 1,197 $ 1,027 Net income $ 1,186 $ 997 $ 886 Net income per weighted average share, basic, for Class A and Class B $ 2.82 $ 2.35 $ 2.06 Net income per weighted average share, diluted, for Class A and Class B $ 2.78 $ 2.34 $ 2.04 Weighted average shares, basic, for Class A and Class B 420,520 424,003 430,355 Weighted average shares, diluted, for Class A and Class B 423,994 426,547 434,513 December 31, 2016 2015 2014 Balance Sheet Data: Cash, cash equivalents and short-term investments(1) $ 7,985 $ 7,509 $ 7,075 Working capital(1) $ 5,781 $ 5,231 $ 4,886 Total assets $ 16,643 $ 15,746 $ 15,216 Total unearned revenue $ 5,624 $ 5,076 $ 4,833 Long-term obligations(2) $ 1,500 $ 1,500 $ 1,500 Total stockholders’ equity $ 8,097 $ 7,923 $ 7,586 Cash Flow Data: Net cash provided by operating activities $ 2,381 $ 1,899 $ 2,180 ____________________________ 6 (1) In 2012, VMWare acquired all of the outstanding capital stock of Nicira, Inc. (“Nicira”) for $1,100 million, net of cash acquired, consisting of $1,083 million in cash and $17 million for the fair value of assumed equity attributed to pre-combination services. (2) On January 21, 2014, in connection with the Company’s agreement to acquire A.W.S. Holding, LLC (“AirWatch Holding”), the sole member and equity holder of AirWatch LLC (“AirWatch”), VMware entered into a note exchange agreement with EMC providing for the issuance of three promissory notes in the aggregate principal amount of $1,500 million. The total debt of $1,500 million includes $450 million that was exchanged for the $450 million promissory note outstanding in prior years. B.8 Pro Forma Not applicable, because no historical financial information is required to be provided Financial in the prospectus. Information B.9 Profit Forecast Not applicable. This prospectus does not contain any profit forecast. B.10 Qualifications Not applicable. There are no such qualifications in the auditors’ report. in the Audit Report on the historical Financial Information B.11 Working VMware believes that its working capital (i.e. its ability to access cash and other Capital available liquid resources in order to meet its liabilities as they fall due) is sufficient Statement to meet its present requirements for at least the next twelve months. Section C — Securities C.1 Type and Class The shares offered under the VMware, Inc. Amended and Restated 2007 Employee of the Stock Purchase Plan (“ESPP”) are Class A common stock of VMware, par value Securities $0.01. being offered, The International Securities Identification Number (ISIN) for the Company’s including the common stock is US9285634021. The U.S. security identification (CUSIP) number Security for the Company’s common stock is 928563402. Identification Code C.2 Currency of The United States Dollar is the currency of the securities issue. the Securities Issue C.3 Number of The Company had 408,350,785 shares of common stock outstanding as of December Shares Issued 31, 2016, with a par value of $0.01 per share, of which 108,350,785 shares were Class A common stock and 300,000,000 were Class B common stock. C.4 Rights attached No participating employee will have any voting, dividend, or other shareholder rights to the with respect to any offering under the ESPP until the purchase rights have been Securities exercised and the shares have been purchased and delivered to the participating employee. Following such purchase and delivery, the participating employee will be entitled to the rights attached to the shares, as further described below: Classes of Common Stock. VMware has two classes of authorized common stock: Class A common stock and Class B common stock. Only Class A common stock is the subject of this prospectus. Dividend Rights. Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of VMware’s Class A common stock and Class B common stock are entitled to receive dividends, out of assets legally available, sharing equally in all such dividends on a per share basis, at the times and in the amounts that VMware’s board of directors (“Board”) may determine from time to time. Dividend rights attach when shares of common stock are issued. However, stockholders do not become entitled to dividends until (and if) the Board declares a dividend. If dividends are declared, all stockholders of record as of a certain date set forth by the Board will be entitled to such dividends. If someone 7 is not a stockholder of record on such date, he or she will not be entitled to any dividend payments. Under §1197 of Title 12 of the Delaware Code, dividends that are unclaimed for 3 years escheat to the State of Delaware. Specifically, dividends become subject to escheat after a period of dormancy which is the full and continuous period of 3 years during which an owner has ceased, failed or neglected to assert a right of ownership or possession. There are no dividend restrictions and no special procedures for stockholders resident in the European Union and the EEA. Conversion Rights for Class B common stock. Each share of Class B common stock is convertible while held by EMC or its successor-in-interest at the option of EMC or its successor-in-interest into one share of Class A common stock. All conversions will be effected on a share-for-share basis. Voting Rights. Except that holders of Class A common stock are entitled to one vote per share while holders of Class B common stock are entitled to 10 votes per share on all matters to be voted on by VMware’s stockholders and except with respect to the election of directors, conversion, certain actions that require the consent of holders of Class B common stock and other protective provisions, the holders of Class A common stock and Class B common stock have identical rights. The holders of VMware Class B common stock, voting separately as a class, are entitled to elect 80% of the total number of directors on VMware’s Board which it would have if there were no vacancies on the Board at the time. Subject to any rights of any series of preferred stock to elect directors, the holders of VMware Class A common stock and the holders of VMware Class B common stock, voting together as a single class, are entitled to elect the remaining directors, which at no time will be less than one director. In any such election, the holders of Class A common stock and the holders of Class B common stock are entitled to one vote per share. Generally, all other matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast at a meeting by all shares of Class A common stock and Class B common stock present in person or represented by proxy, voting together as a single class, subject to any voting rights granted to holders of any preferred stock. No Preemptive or Redemption Rights. VMware’s Class A common stock and Class B common stock are not entitled to preemptive rights to acquire shares of the Company’s common stock and are not subject to redemption or sinking fund provisions. Right to Receive Liquidation Distributions. Upon VMware’s liquidation, dissolution or winding-up, the holders of VMware’s Class A common stock and Class B common stock are entitled to share equally in all of VMware’s assets remaining after payment of all liabilities and the liquidation preferences of any outstanding preferred stock. C.5 Transferability The offering of shares under the ESPP has been registered with the U.S. Securities and Exchange Commission on a registration statement on Form S-8 and the issued and outstanding shares of common stock are generally freely transferable. A participant may sell shares purchased under the ESPP at any time he or she chooses, subject to compliance with any applicable securities laws, insider trading policies and applicable blackout periods. The participant assumes the risk of any market fluctuations in the price of the shares. C.6 Admission to Not applicable. The Company’s shares are listed for trading on the New York Stock Trading on a Exchange (“NYSE”), which is not a regulated market within the meaning of the Regulated Directive 2004/39/EC, under the symbol “VMW.” In Germany, the shares are traded Market on the unofficial market segment (“Freiverkehr”) on the exchanges in Frankfurt, 8 Stuttgart, Munich and Berlin as well as on Tradegate under the symbol “BZF1”. They will not be admitted for trading on any regulated market. C.7 Dividend Subsequent to VMware’s IPO in August 2007, the Company has not declared or paid Policy cash dividends on its common stock. VMware currently does not anticipate declaring any cash dividends in the foreseeable future. Section D — Risks Employees should carefully consider the risks described below, which are described in more detail under the caption “Risk Factors”, and other information contained in this prospectus, and take these factors into account in making their investment decision. The occurrence of one or more of these risks alone or in combination with other circumstances may have a material adverse effect on the business and financial condition of the Company and cause the market price of the Company’s shares to decline. In such case, employees could lose all or part of their investment. The prospectus contains all risks which the Company deems material. However, the risks described below may turn out to be incomplete and therefore may not be the only risks to which the Company is exposed. Additional risks and uncertainties could have a material adverse effect on the business and financial condition of the Company. The order of presentation of the risk factors below does not indicate the likelihood of their occurrence or the extent or the significance of the individual risks. D.1 Risks related to Risks Related to VMware’s Business VMware or its • VMware’s success depends increasingly on customer acceptance of its emerging Industry products and services. • A significant decrease in demand for VMware’s server virtualization products would adversely affect VMware’s operating results. • VMware faces intense competition that could adversely affect its operating results. • The loss of key management personnel could harm VMware’s business. • Competition for VMware’s target employees is intense and costly, and VMware may not be able to attract and retain highly skilled employees. • Adverse economic conditions may harm VMware’s business. • VMware may not be able to respond to rapid technological changes with new solutions and services offerings. • Breaches of VMware’s cybersecurity systems could seriously harm VMware’s business. • VMware’s operating results may fluctuate significantly. • VMware is exposed to foreign exchange risks. • VMware operates a global business that exposes it to additional risks. • VMware’s current research and development efforts may not produce significant revenue for several years, if at all. • VMware is involved in investigations and regulatory inquiries and proceedings that could negatively affect it. • VMware may not be able to adequately protect its intellectual property rights. • VMware’s use of “open source” software in its products could negatively affect its ability to sell its products and subject VMware to litigation. • The evolution of VMware’s business requires more complex go-to-market strategies, which involve significant risk. • VMware’s success depends upon its ability to develop appropriate business and pricing models. • VMware’s products and services are highly technical and may contain errors, defects or security vulnerabilities. • Failure to effectively manage VMware’s product and service lifecycles could harm VMware’s business. • VMware’s success depends on the interoperability of its products and services with those of other companies. • Disruptions to VMware’s distribution channels could harm its business. • VMware’s vCloud Air and SaaS offerings rely on third-party providers for data center space and colocation services. • Joint ventures may not yield expected benefits and outcomes. 9 • SaaS offerings, which involve various risks, constitute an important part of VMware’s business. • Improper disclosure and use of personal data could result in liability and impact VMware’s business. • If VMware fails to comply with its customer contracts or government contracting regulations, VMware’s business could be adversely affected. • Acquisitions and dispositions could harm VMware’s business and operating results. • If VMware’s goodwill or amortizable intangible assets become impaired, VMware may be required to record a significant charge to earnings. • Problems with VMware’s information systems could interfere with its business and could adversely impact VMware’s operations. • VMware may have exposure to additional tax liabilities, and its operating results may be adversely impacted by higher than expected tax rates. • Catastrophic events or geo-political conditions could disrupt VMware’s business. • Changes in accounting principles and guidance could result in unfavorable accounting charges or effects. Risks Related to VMware’s Relationship with Dell • VMware’s stock price fluctuated significantly following the announcement of the Dell Acquisition, and VMWare’s future relationship with Dell may adversely impact VMware’s business and stock price in the future. • Holders of VMware’s Class A common stock have limited ability to influence matters requiring stockholder approval. • Dell has the ability to prevent VMware from taking actions that might be in VMware’s best interest. • Dell has the ability to prevent a change in control transaction and may sell control of VMware without benefiting other stockholders. • If Dell’s level of ownership significantly increases, Dell could unilaterally effect a merger of VMware into Dell without a vote of VMware stockholders or the VMware board of directors at a price per share that might not reflect a premium to then-current market prices. • VMware engages in related persons transactions with Dell that may divert its resources, create opportunity costs and prove to be unsuccessful. • VMware’s business and Dell’s businesses overlap, and Dell may compete with VMware, which could reduce VMware’s market share. • Dell’s competition in certain markets may affect VMware’s ability to build and maintain partnerships. • The realignment of VMware’s fiscal calendar to coincide with Dell’s and Dell’s reporting on VMware’s financial results may result in fluctuations in the Company’s stock price, and errors in its implementation of the realignment could adversely impact VMware’s business operations and financial results. • VMware could be held liable for the tax liabilities of other members of Dell’s consolidated tax group. • VMware has limited ability to resolve favorably any disputes that arise between VMware and Dell. • VMware’s CEO, its CFO and some of its directors have potential conflicts of interest with Dell. • Dell’s ability to control VMware’s board of directors may make it difficult for VMware to recruit independent directors. • VMware’s historical financial information as a majority-owned subsidiary may not be representative of the results of a completely independent public company. • The price of VMware’s Class A common stock has fluctuated significantly in D.3 Key Risks recent years and may fluctuate significantly in the future. related to the • If securities or industry analysts change their recommendations regarding the Shares Company’s stock adversely, its stock price and trading volume could decline. • Anti-takeover provisions in Delaware law and VMware’s charter documents could discourage takeover attempts. Section E — Offer 10