Virtualization Technology News and Information
VMware: The Apple connection is tenuous
Quoting USA Today 
Q: Why is there so much hype around the initial public offering of VMWare (VMW)?

A: VMWare makes a variety of "virtualization" software.

Virtualization? You're probably scratching your head. But when I tell you some of VMWare's Fusion virtualization software lets you run Microsoft's (MSFT) Windows Vista on an Apple (AAPL) Macintosh computer, it probably starts to get more clear.

This Apple connection probably explains much of the hype over VMWare's initial public offering. VMWare is selling shares to the public so it can invest more in developing its software. Investors, eager to get their hands on anything remotely connected to Apple, see VMWare as another entry point in the Apple hubbub, other than Apple stock itself.

Apple has become the new darling among tech investors. The company's success with the iPod music player has brought attention back to the company and its stock. Apple now has a market value of about $105 billion, almost double the market value of Dell.

Apple bulls are convinced consumers who bought iPods will get curious about Apple's Mac computers. If that happens, many consumers, still accustomed to Microsoft's Windows operating system, may look for ways to run Windows on Apple machines. If that's the case, VMWare could benefit.

Investors, though, should be cautious before jumping on board. First, despite Apple's successes winning over Windows converts, Mac sales are still a sliver of the market. Estimates peg Mac shipments at about 5% of total PC shipments.

So, you're dealing with a small subset of the market to begin with. And you need to carve it further. VMWare's Fusion isn't the only solution for Mac users who want to run Windows. There is another popular software program called Parallels, and Apple itself offers a free software program called Bootcamp. Second, not all Macintosh users will want to run Windows.

Add to this the fact that VMWare is being hyped by regular investors, and you're dealing with a pretty risky bet. It might be time to turn up the volume on your iPod to block out the hype on this one.

Read the original, here.

Published Thursday, August 23, 2007 5:50 AM by David Marshall
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