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ZDNet Blog Asks "Why Now?" About the VMware IPO

Dan Kusnetzky recently blogged on his ZDNet blog site asking the question that many people are thinking about - Why now?  Why is EMC/VMware now going IPO with a 10% stake of the company?  He offers up his thoughts around market pressures and EMC synergies in his latest post.  I tend to agree with his stand.  Check out what he says about the market pressures for instance:

VMware is facing pressure from Microsoft. Microsoft is in the middle of a plan to incorporates its virtual machine software into its operating systems. This move is likely to place a great deal of pressure on other competitors if history is a guide. I remember what happened to suppliers of TCP/IP software, such as TGV, and memory management software, such as QuarterDeck Software, when Microsoft released Windows 95. Windows 95 contained both types of software. The other suppliers gradually faded away.  Their software often offered more features than the software being offered than the "free" software being offered by Microsoft. The word "free" is the operative word here. IT decision-makers were more than willing to adopt less funcitonal software if it was good enough to get by and it was included at no additional cost.

VMware is also facing pressure from Xen and if Simon Crosby, CTO of XenSource, is correct (see his blog entry here), Xen's commercial products outperform VMware ESX server at a considerably lower price. As Linux distributors, such as Red Hat and Novell, simply include Xen in their Linux distributions at no additional cost, IT decision makers who use Linux are likely to move in a Xen direction.

Another Linux virtual machine software offering, the Kernel-based Virtual Machine (KVM), is emerging as a potential threat to VMware.

VMware is facing many challenges from other suppliers offering management frameworks capable of managing an entire computing environment, not just the virtual machines that are running.  The list of management vendors reaching into this space include all of the management software suppliers and most of the virtual processing software suppliers. 

Read the rest of his post or leave a comment, here.

Published Sunday, April 29, 2007 9:38 AM by David Marshall
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