Rumor: EMC may sell VMware (to Intel)

Posted by Alessandro Perilli | Friday, May 16, 2008 | 4 Comments

Bloomberg just published a rumor about the possible sale of VMware.
Their article doesn't mention any potential buyer.

virtualization.info can confirm that this rumor is spreading since several months with a key additional detail: the potential buyer mentioned so far by multiple sources is Intel.

While it's possible that this rumor is spreading just to artificially increase the VMW stock, if confirmed such acquisition may give VMware a unique competitive advantage, slipping the hypervisor directly onto the CPU, and may completely change the IT industry order, with new alliances and competitors.

In any case an acquisition isn't like to happen before January 2009, when EMC will be able to do a tax-free distribution of shares.

Update: Obviously EMC denies the possibility to sell its VMware stake.

Second update: Two months later (July 7) RBC Capital Markets publicly embraces the idea that VMware may be sold in early 2009 and updates its EMC stock rating to outperform.
The result is a temporary performance boost of 4.5%

Bookmark & share this article | Email this article

4 Comments

Marco Russo Saturday, May 17, 2008 11:07:00 AM

Technologically, this sounds interesting. However, this might change the relationships between Microsoft and Intel. With what consequences? Who knows... There is also an anti-trust implication: for years Apple builthardware running only its own operating system and vice-versa, but with a less than 10% figure it never worried regulators. If Intel would start to sell software other than hardware and if that software and that hardware would be strictly tight together... with the market-share of Intel... Probably lawyers would be enthusiast of such scenario!

tech1 Sunday, May 18, 2008 5:52:00 PM

it would be tough to pull this through without Microsoft having a major issue with it, unless Microsfot get VMware via Intel :)

Paul Milligan Monday, May 19, 2008 10:28:00 AM

This would obviously be good for EMC, and in general good for VMware and its users. However there would be obvious concerns for AMD who have a strong presence in the server marketplace. Given that the major server vendors all have significant relationships with Intel, they should be able to ensure consumer interests are protected.

Until recently the holy grail of operating systems was represented by a micro-kernel architecture that allowed drivers and filesystems to run in user space. However the 3 major monolithic OS (Windows, Linux, Unix) never looked like they would attain that goal. Only OSX with it's mach based kernel has come close and Apple has chosen to keep it proprietary. A micro-kernel virtualization system may now be the best we can hope for. However once virtualization is embedded in the BIOS / Chipset OS design achieves another level of freedom.

It seems to me that it's upside 5/10, downside 5/10; it will be interesting to see what happens.

PS How would this look to Citrix / Xen?

Rob Bergin Thursday, May 22, 2008 5:31:00 PM

I am seeing alot of ESX shops buying the HP DL585 - its got four sockets and a ton of DIMM banks for RAM (which is where ESX tends to eat up resources first). It's big brother is the DL785 with 8 sockets (AMD) and even more RAM. The Sun X4600 is also AMD Opteron Based. The IBM x3755 is AMD-based but the 3850 and the 3950 are both Intel. But in the bigger ESX environments, it seems like AMD has significant mindshare amongst ESX folks buying these servers. I would be interested in where the Xen and Hyper-V server are landing (Intel or AMD). Thanks, Rob Bergin Systems Engineer www.vkernel.com

Rumor: EMC may sell VMware (to Intel)

4 Comments

Add New Comment