virtualization.info

As expected, today VMware, Cisco and EMC announced a special alliance, a coalition as they call it, dubbed Virtual Computing Environment (VCE).

This entity will share investments to sell the components, training and consulting for a number of bundle packages called Vblocks.

The VCE will also count on a partners ecosystem, which already counts on six system integrators: Accenture, Capgemini, CSC, Lockheed Martin, Tata Consulting Services, and Wipro.

The Vbocks can be deployed at customers data centers or hosted online. 
To design them, operate them on behalf of the customers, or just transfer them from the hosting facility to the customers data centers, Cisco and EMC created a special joint venture called Acadia
VMware and Intel invested in Acadia too, and the company will start operating in 2010. 
It’s not clear why the system integrators above cannot do that instead of Acadia.

At its launch VCE will offer three Vblocks:

• Vblock 0
  entry-level configuration available in 2010
  supporting 300 up to 800 virtual machines
  leveraging Cisco's UCS and Nexus 1000v, EMC's Unified Storage (secured by RSA), and the VMware vSphere platform
• Vblock 1
  mid-sized configuration (undisclosed launch date) 
  supporting 800 up to 3,000 virtual machines
  leveraging Cisco's UCS, Nexus 1000v and MDS, EMC's CLARiiON storage (secured by RSA), and the VMware vSphere platform
• Vblock 2
  high-end configuration (undisclosed launch date) 
  supporting up to 3,000-6,000 virtual machines 
  leveraging Cisco UCS, Nexus 1000v and Multilayer Directional Switches (MDS), EMC's Symmetrix V-Max storage (secured by RSA), and the VMware vSphere platform

VCE will develop and offer additional bundles over time for shared services, applications and vertical industry solutions.
“Shared Services” and “Applications” is where the interest should focus the most. There, it’s possible to see popping up the hosting provider Terremark, where VMware invested $5 million, and SpringSource that VMware acquired in August for $420 million.

All Vblocks will be ISO 27001 compliant.

To manage these data-centers-in-a-box as a whole, EMC is offering a new management product called Ionix Data Center Insight.

Ionix will not replace the vSphere and UCS management consoles, but will coordinate them, gluing them with an application management stack that controls what happens inside the virtual machines:

The most important question around this partnership is: why these VMware, Cisco and EMC have to form a coalition to validate and sell their products as a commercial bundle?
Their architects already produce jointly validated infrastructure blueprints that customers can use to design new data centers. 
Part of their channels already sell their solutions together where it makes sense, and more will do if the products works better together.
Their customers don’t need a new brand and marketing brochures to buy the idea of cloud computing and private cloud. Cisco alone (in terms of selling servers) is new enough to generate interest and concerns.

VMware is taking a lot of risks with this move.
HP alone sells 36% of all virtualized servers. And it has EDS.
Dell just acquired Perot Systems, which is one of the biggest consulting arms in the world to sell the VMware-centric Dell virtualization portfolio.
IBM just has to think about Red Hat and its new KVM-centric offering, and it could be a dangerous competitor on a global scale.

Months ago virtualization.info published an article suggesting that VMware may be slowly morphing into an infrastructure management company that will compete with BMC, CA, HP and IBM.
Maybe it’s not VMware, it’s EMC that has this ambition. Ionix seems to imply so.
And because Cisco may have a similar ambition too, and both can’t afford to become an infrastructure management company in 2010 without controlling the virtual layer, VMware is the mandatory addition.

Maybe the VCE coalition is just an attempt to generate significant results that can validate a future merger.
VMware, Cisco and EMC all have a neutral position in the market today. 
All have a solid relationship with the entire ecosystem (except their direct competitors), including Microsoft (except of course for VMware).
While this coalition doesn’t change much, apparently, an actual merger would drastically change the way these companies behave. And the shareholders may not consider the move worth losing the current market alliances.
But, if a coalition could produce amazing results in 12-18 months of work, then it would much easier to justify the new Ciscoware.

While waiting to see if the merger will take place or not, it’s worth to consider once again how this coalition will impact the other OEMs that so far preferred VMware over Microsoft and Citrix.
A number of smart people suggested that this partnership will not change anything, but it’s worth to remind that Cisco has a significant stake in VMware, that Intel and VMware just invested in the new Acadia joint venture, and that VMware just sent out a message to its sales channel that says:

…The Virtual Computing Environment coalition offers organizations of all sizes an accelerated approach to data center transformation with dramatic efficiencies that promise significant reductions in both capital and operating expenses. As a result, organizations will no longer have to choose between best-of-breed technologies and end-to-end vendor accountability…

Who knows if HP, Dell and IBM consider this a non-problem.

Labels: Alliances, Cisco, EMC, VMware

At the end of the last week Reuters broke the news about an upcoming joint venture between EMC, its subsidiary VMware and Cisco.

The three should announce a new product portfolio this week, called vBlock, probably gluing together Cisco Unified Computing System (UCS) and Nexus, EMC V-Max and VMware vSphere, which the joint venture will sell as a hosted service.
And if the customer wants it, the vBlock gear can be moved inside the company’s boundaries.

At the end of September virtualization.info published an article about the strong alliance that these three companies are building and how it’s going to impact the VMware partnership with the other OEMs and how it’s going to influence the perception that customers have of the VMware position in the market.

We expect the official announcement before publishing further comments, but it’s clear that this joint venture is going to modify the landscape in some serious way.

Update: In an interesting interview with John McCool, Senior Vice President and General Manager of Data Center Switching and Services Group at Cisco, that Network World published today, the joint venture (codename Alpine) is mentioned but the executive refuses to comment about it.

Labels: Cisco, EMC, VMware

Since the VMware acquisition at the end of 2003, EMC always said that its new subsidiary had to stay independent to win the market.
A few really trusted those words at the time: nothing like virtualization has driven the storage spending in the history of enterprise IT (and it’s just the beginning, wait for VDI to become mainstream).
It was hard to believe that EMC wouldn’t leverage its relationship with VMware to declass NetApp, HP, IBM, Sun (now Oracle) and others as second choice options when designing virtual data centers.
But over the years the storage giant demonstrated its commitment to keep VMware independent.
For a period of time EMC was even accused of not doing enough, lacking that minimum integration that customers expect between two technologies as complementary and connected as the VMware hypervisor and the EMC storage array.

If EMC ever used its influence on VMware to damage its competitors, virtualization.info is not aware of it and no customer or reader ever complained about that.

Now everything is changing.

It’s not changing in the sense that EMC has started to adopt sneaky or illegal techniques to better position inside the virtual data center.
It’s changing because the EMC commitment is no more to let VMware play nice with every storage vendor in a very balanced way.

The new EMC commitment is to develop, evangelize and deploy solutions that work with VMware better than anything else available from competitors. And they are doing well. Really well.

A major driver in this new strategy is Cisco: the networking giant doesn’t have any real competition in the virtualization space at this point, and this puts the company in the position to demand for an unprecedented level of commitment to its new partners EMC and VMware.

If unpleased, Cisco can go to Citrix. Or Microsoft.
And both VMware and EMC know that networking is the next biggest bottleneck in the virtual data center of tomorrow.
Simply put, Cisco is too important (with or without its unified fabric effort) to let it go.

Nobody here is trying to say that the EMC effort entirely depends on Cisco. 
Their effort depends on a long-term vision that finally makes a lot of sense and that is embraced at all levels inside and outside the company.
The synergy/symbiosis with Cisco is just accelerating the events.

NetApp, HP and IBM (assuming that one day Big Blue will start paying attention again to the x86 market) have a huge problem.
It doesn’t matter how good their solutions in the virtual data center are. It doesn’t matter how tight the integration with VMware vCenter is.
There’s a growing perception that EMC is the way to go. And a growing perception that there’s nothing on the market that can compete with the triad VMware-Cisco-EMC.

These companies have three options: do nothing, start to spend a massive amount of energies in countering the EMC activity and gain back the attention of the VMware audience, or build something similar elsewhere.
Of course this last option is the most interesting. Something may happen around Citrix and Microsoft in the coming months.

Labels: Alliances, Cisco, EMC, VMware

At the beginning of July virtualization.info reported how VMware, Cisco and EMC (the VCE triumvirate?) are working together to execute virtual machines live migrations across data centers that are 80 km (50 miles) away from each other.

Well, what was considered an impressive yet experimental configuration in July became an officially supported scenario in September.

The three companies discussed three different scenarios for long-distance VMotion at VMworld 2009 and announced the joint validation for one of them, where VMware supports a 200 km live migration (assuming you can satisfy some pretty demanding requirements):

Chad Sakac, Vice President of VMware Technology Alliance at EMC, has as usual provided a comprehensive coverage of the session that is really worth a review.

Labels: Cisco, EMC, VMware

Last month virtualization.info announced a new initiative called OneHourOn.

OneHourOn is a live webcast that virtualization.info will host from its cutting-edge Rent-A-Lab facility in Zurich.
The webcast shows a live configuration and/or management of a popular virtualization product among the ones that we daily track in the news.

There are no slides at all. Everything is performed live and directly on product consoles.

Our first show featured the configuration of VMware Site Recovery Manager 1.0 with EMC Celerra NS20 storage arrays, something that is not exactly easy to test without the proper lab equipment.

We got several inquiries from the vendors to show their products in the next OneHourOn shows, but before moving on we’d like to repeat the first one one more time for the readers that wanted attend and couldn’t because of the limited seats available.

This time we increased the availability to 50 seats, and we’ll progressively increase more as long as we are satisfied by the performance.

So the second virtualization.info OneHourOn show is scheduled for July 23 @ 6pm CET (9am PST).
Once again our presenter will be Marcel Brunner, VMware Specialist at EMC Switzerland.
The webcast will be delivered in English language.

Like for the previous show, attending the event is free.
You are welcome to register at this address: http://onehouron.eventbrite.com

Attention: The attendees will receive the coordinates to join the meeting by email, so be sure to register using a real email address and be sure to check the SPAM folder if you didn’t receive the meeting coordinates by June 22.

If you want to send suggestions about what product should appear in the next OneHourOn show, or if you are a vendor and are interested in demoing your product during the next OneHourOn show, please send an email to onehouron@virtualization.info

Labels: Announcements, EMC, OneHourOn, VMware

VMware, Cisco and EMC are really putting a massive effort in promoting the new Unified Computing System (UCS) blade platform that Cisco unveiled in March.

One of the most interesting things produced in this effort is the whitepaper that Cisco just published on his website: Scalability Study for Deploying VMware View on Cisco UCS and EMC V-Max Systems.

The triad managed to setup and document a VDI environment based on VMware Infrastructure 3.5 Update 4 with 640 virtual desktops (Windows XP with 512MB vRAM and 8GB vHD), served by four UCS blades (160 seats per blade), each with 96GB RAM and the new Intel Xeon 5500 Quad Core CPUs.
Which is four times what was achieved on Dell M600 blades.

The description of the environment is extremely detailed and goes deep into the configuration setup and the performance analysis. It’s really worth a read.

Thanks to Virtual Geek for the news.

Labels: Cisco, EMC, Papers, VDI, VMware

Today virtualization.info is happy to announce the launch of a new initiative called OneHourOn.

OneHourOn is a live webcast that virtualization.info will host from its cutting-edge Rent-A-Lab facility in Zurich.
We’ll use our on-demand datacenter to show the configuration and management of products provided by the many virtualization vendors that we daily track in the news.

So no slides at all.

This is a great opportunity to see in action a product that you may be interested in purchasing and by the way this also is a great opportunity to see how powerful, flexible and fast Rent-A-Lab can be.

Of course we’ll take full advantage of the enterprise equipment we have (currently 28 servers, each with 2 x Quad Core Intel E5420 2.5GHz, plus 35TB of storage served by SANs from several vendors).
This is why the first OneHourOn webcast will show a fairly complex installation to reproduce in a lab without expensive test equipment: the installation and configuration of VMware Site Recovery Manager 1.0 with EMC Celerra NS20 storage arrays.

The first virtualization.info OneHourOn is scheduled for June 25 @ 6pm CET.
Our presenter will be Marcel Brunner, VMware Specialist at EMC Switzerland.
The webcast will be delivered in English language.

Attending the event is free.
Because this is the first attempt to run such virtual event we decided to limit the number of seats to 15.
You are welcome to register at this address: http://onehouron.eventbrite.com

Attention: The attendees will receive the coordinates to join the meeting by email, so be sure to register using a real email address and be sure to check the SPAM folder if you didn’t receive the meeting coordinates by June 24.

If you want to send suggestions about what product should appear in the next OneHourOn show, or if you are a vendor and are interested in demoing your product during the next OneHourOn show, please send an email to onehouron@virtualization.info

Labels: Announcements, EMC, OneHourOn, VMware

After the acquisition of some of the jewels of the IT industry, like VMware (in 2003 for $635 million) and RSA (in 2006 for $2.1 billion), plus an endless number of other interesting vendors, EMC slowed down its pace in 2008. But the worldwide financial crisis represents a great time to restart the shopping season and close amazing deals.

So last week EMC announced the acquisition of Configuresoft, a configuration management company that started to focus on virtualization and VMware in early 2008.
The price paid for this deal was not disclosed.

The main reason behind the operation is the OEM relationship which already exists between the two companies, where EMC is selling Configuresoft technologies as Server Configuration Manager (SCM) and Configuration Analytics Manager (CIA).
But considering that EMC is the parent company of VMware, parts of the Configuresoft intellectual property may go to the subsidiary which may find them extremely useful to enrich its vCenter Suite.

Labels: Acquisitions, Configuresoft, EMC

Just two weeks ago, after one year and a half of silence, EMC (or better a couple of its top executives) decided to publicly criticize the Oracle support policy against its subsidiary VMware.

The trigger for such change of directions probably was the acquisition of Sun, which may transform Oracle in a dangerous competitor in the long term.
Rather than replicate on the corporate blog, Oracle answered with the acquisition of Virtual Iron, which is pretty much equal to a declaration of war.

While Oracle VM Server is being sold as a general purpose hypervisor that customers can use for any workload, a few are really using it to run any application but Oracle ones.
The acquisition of Virtual Iron, even more than the acquisition of Sun and its xVM virtualization portfolio, may change this perception and attract a different kind of customers that not necessarily use Oracle products.

So EMC is back on the topic, this time attacking the entire Oracle virtualization strategy.
Once again is Chuck Hollis, Vice President, Global Marketing CTO, to push the button on his personal blog:

…Put in the context of other recent activities, the picture is crystal clear: it appears that Oracle intends to use their market power with databases to force customers to consider their soon-to-be-announced virtualization stack.

…

Almost all of my IT customers want to standardize on a single virtualization layer.  They'd like to use one consistent set of technology to virtualize server applications, virtualize desktop applications and virtualize all the supporting cast of management, security, backup, etc. as well.
And, not surprisingly, they've all chosen VMware as the direction they'd like to go.
It appears that Oracle is going to try and bust up this happy customer-centric vision.  It looks like they're going to use customers' dependence on the Oracle database to force a separately architected, separately managed and separately supported virtualization layer on their customer base.

…

There are a host of useful features in VMware that we'll probably never see in the Oracle hypervisor.

…

Sorry, Mr. Customer.  You'll have to live with a separate, clunky, inefficient and expensive Oracle Officially Supported Alternative.  Oracle wins, customers lose.

…

Sorry, Mr. Customer.  I guess you can't consider Oracle for vSphere fault tolerant environments.  Maybe SQLserver, maybe UDB, maybe something else -- but not the Oracle database since that feature isn't in the Oracle Officially Supported Alternative.  Oracle wins, customers lose.

…

Now, you know I talk to large customers frequently, and -- frankly -- they're pissed at all of this.  With Oracle's latest moves regarding Sun and now Virtual Iron, they can clearly see what's going on here.  And they're starting to figure out how they want to play this.

One smart fellow told Oracle that they were starting a large-scale proof-of-concept around Microsoft's SQLserver as the strategic alternative to the Oracle database.  The Microsoft team was more than happy to help, as were we at EMC.  I don't know how it's going to end, but I bet that Oracle does a special deal with this guy regarding VMware support as a result.

Another guy told me he was starting to contract with one of the focused Oracle boutique consulting organizations for most support issues -- they had no problem with VMware -- and denying Oracle services revenue in the process…

Labels: EMC, Oracle, Sun, Virtual Iron

More than one year and a half ago Oracle has broken its happy marriage with VMware, announcing its own hypervisor and clarifying that its software is not supported on ESX or any other 3rd party virtualization platform.
As a matter of fact the new support policy that Oracle introduced obliges its customers to adopt Oracle VM Server or give up virtualization (here’s a very recent and deep analysis of the support policy provided by an Oracle professional).

At that time the public reaction of VMware was firm but polite, expressed in a long document that explains why Oracle products run well on ESX.
Probably VMware didn’t react more aggressively in the hope to recover the relationship with the database vendor, knowing how critical is Oracle for its audience. But so far there’s no data about how many customers really followed the VMware suggestion deciding to virtualize anyway.

Now, someone at EMC, the VMware parent company, must have decided that it’s finally time to take a strong position on this topic.

For the first time in public to our knowledge, not one but two high-level executives at EMC decided to comment the Oracle support policy: Chad Sakac, Vice President of VMware Technology Alliance, and Chuck Hollis, Vice President, Global Marketing CTO, used their personal blogs, the same day, to attack Oracle and incite the customers to rebel:

Chad Sakac:

…

Customer after customer is telling me about Oracle sales heavy-handed tactics pushing them away from VMware.   Consistently, they point to a well-known metalink article.   Now, clear support positions are a GOOD THING.  But in this case, Oracle seems to be calling out a position where normally they don’t.

…

Has Oracle put the fear of god into you re: Oracle on VMware?   Have your Oracle sales teams pointed to the metalink article and said “it’s not supported on VMware, don’t do it”?   While there’s no question an ISV is entitled to bring you a value proposition of “the full stack” – what do you think about ISVs who dictate a specific infrastructure design, particularly when it diverges with what you’re trying to do in the datacenter? If you’re not happy about Oracle’s support position – and are an Oracle customer – POST YOUR COMMENTS below!

Chuck Hollis:

…

VMware Functionality Competes With Oracle DBMS Features

Now we're getting warmer.  Much warmer. 

Oracle hasn't come out and said this to the best of my knowledge, but it's pretty clear to many of us that this is the case.

Let's construct a side-by-sde mental model of two similar Oracle DBMS configurations.

On one hand, we've got a multi-server configuration running Oracle's latest (and most expensive) RAC product.  It's doing load balancing, high availability, and making the hardware function as a giant pool.

Nice.

On the other hand, we've got the same multi-server configuration running the much cheaper Oracle SE on VMware. 

It too is load balancing, offers high availability, and makes the hardware function as a single giant pool.  Many of the management tasks are handled quite well outside of Oracle's domain.

By the way, none of those features can be found in Oracle's hypervisor.  Why would Oracle want any functionality in a hypervisor that's open source?

And VMware brings a few very cool features to the table that Oracle doesn't, like real fault tolerance.  Or Dynamic Power Management.  Or Site Recovery Manager.  The list goes on and on.

Nicer.

Not that anyone I know would ever want their Oracle databases to run fully fault tolerant on industry-standard hardware :-)

And wouldn't it be very surprising if -- for some workloads -- customers saw far more performance and throughput from the VMware / Oracle SE database config as compared to the much more pricey Oracle RAC configuration?

Maybe Oracle could fight it out with VMware toe-to-toe on the finer points of performance, functionality, etc. -- but why bother? 

So much easier to create the impression that Oracle doesn't support VMware, and move on.

…

Larry Wants To Own The Stack

Some of the more interesting statements made by Larry Ellison and his team as part of the Sun announcement point to their vision that Oracle could now provide a complete solution "from database to disk".

Now, if that's Oracle's strategic goal, it would be very inconvenient indeed if customers preferred to break up that nice stack with a cloud operating system from VMware, wouldn't it?

To spend all that money on Sun, and not be able to "close the walls of the garden" so to speak -- well, that just wouldn't do in the grand scheme of things, would it?

I don't know if you're aware of this, but when IT vendor strategy guys get together, they talk about emerging stacks, control points, where you want to be open and where you don't, where you monetize and where you commoditize, and so on.

Not to share deep industry secrets here, but it's a very common strategic framework for how IT vendors think about assembling their portfolios.

And having VMware inconveniently show up in the Oracle's new stack with all these radical capabilities just isn't a good thing for Oracle's implied strategy with Sun.

Put differently, if you're Oracle, you don't want a really big and important strategic control point in your stack being owned by someone else. 

That's a bad scenario for Oracle.  However, that's a very good scenario for customers…

As both Sakac and Hollis used their personal blog this cannot be considered the EMC official position, but still the role, visibility and credibility of both executives is so high that their words can’t be taken as just the rant of an average blogger.
The fact that VMware is spreading their posts through its huge community using Twitter confirms that Sakac and Holly’s personal positions are pretty much echoing the official sentiment at VMware and EMC.

The big question now is not what Oracle will answer to that, but why EMC is reacting so strong in public only today.
Is EMC already seeing Oracle-Sun as a dangerous competitor?
Or is this an attempt to drive more sales to VMware now that the company expects its first negative quarter revenue?
Or is this the indirect answer to the recent critics that Oracle expressed against VMware about its virtual appliance strategy?
In any case it’s hard to believe that it’s just a coincidence.

Considering the current state of the global economy, the customers may want to use this opportunity to ask for an official answer. It may appear on the new Oracle virtualization blog, where the company started its indirect skirmish with VMware a few weeks ago.
For sure it’s unlikely that the answer will be pleasing. Larry Ellison, the Oracle CEO, made it very clear in the Sun acquisition announcement:

Oracle will be the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.

It’s easy to guess that Oracle will do everything possible to keep its customers on its brand new full computing stack.

Update: The remarkable number of comments generated by this article led to a follow-up which addresses several questions and misconceptions about the Oracle products and support policy.
The new article is here and it’s highly recommended that you read it.

Labels: EMC, Oracle, VMware

Finally, after more than three months since virtualization.info broke the news, Cisco is ready to unveils its much rumored blade system codenamed California, dubbed as Unified Computing System (UCS).

The announcement was made a few minutes ago by John Chambers, Cisco CEO, and top notch executives from Intel (Paul Otellini, CEO), VMware (Paul Maritz, President and CEO), EMC (Joe Tucci, CEO), BMC Software (Bob Beauchamp, CEO) and Microsoft (Bob Muglia, President of Server and Tools Business).

For Cisco “unified computing” means data center networking, unified fabric as well as private and extranet-intranet clouds (Cisco calls this “inter-cloud).

To deliver this architecture the company is calling a number of partners, not just the ones above: Accenture, BMC Software, CSC, EMC, Emulex, Intel, Microsoft, Net App, Novell, Oracle, QLogic, Red Hat, SAP, Tata, VMware and Wipro.

Intel collaborates with Cisco on this project not only for the Nehalem CPUs, but also for the 10Gb Fibre Channel over Ethernet (FCoE) part.

Besides FCoE, UCS will access the storage (provided by EMC) will be accessible through Ethernet, Fibre Channel and iSCSI.

Easy to guess VMware is going to certify the upcoming vSphere 4.0 for this platform and ship it with Cisco Nexus 1000V.

Microsoft is going to do the same, with an OEM agreement to ship Windows Server 2008 with Hyper-V (or Windows Server 2003 or SQL Server 2008).
Anyway the involvement of Microsoft is limited as their System Center Virtual Machine Manager (or other components of the System Center family) is not going to ship with the hardware.

On top of the hypervisors and their management tools UCS will ship with BMC software management and automation technology.

The whole thing will be orchestrated by the new UCS Manager (available as GUI and command line interface).
Additionally, Cisco will provide an open API for management, to simplify the transition from “legacy” data center infrastructures.

But for now Cisco is not yet showing what UCS Manager can really do, so there’s no way to measure the level of innovation and the capability to compete with Egenera on the software stack integration.

The only public things right now are the fact the platform can be segmented to simulate up to 320 isolated servers, with thousands of virtual machines, and its components:

• Cisco UCS 6100 Series Fabric Interconnects is a family of line-rate, low-latency, lossless, 10-Gbps Cisco Data Center Ethernet and FCoE interconnect switches that consolidate I/O within the system. Both 20-port 1RU and 40-port 2RU versions accommodate expansion modules that provide Fibre Channel and/or 10 Gigabit Ethernet connectivity.
• Cisco UCS 5100 Series Blade Server Chassis supports up to eight blade servers and up to two fabric extenders in a 6RU enclosure without the need for additional management modules.
• Cisco UCS 2100 Series Fabric Extenders bring unified fabric into the blade-server chassis, providing up to four 10-Gbps connections each between blade servers and the fabric interconnect, simplifying diagnostics, cabling, and management.
• Cisco UCS B-Series Blade Servers based on next generation Intel Xeon processors adapt to application demands, intelligently scale energy use, and offer best-in-class virtualization. Each blade server utilizes network adapters for access to the unified fabric. Cisco's unique memory-expansion technology substantially increases the memory footprint, maximizing performance and capacity for demanding virtualization and large-dataset workloads. In addition, the technology offers a more cost-effective memory footprint for less-demanding workloads.
• Cisco UCS Network Adapters are offered in a mezzanine-card form factor. Three types of adapters offer a range of options to meet application requirements, including adapters optimized for virtualization, compatibility with existing driver stacks, or efficient, high-performance Ethernet.
• Cisco UCS Manager provides centralized management capabilities that serve as the central nervous system of the Cisco Unified Computing System. Cisco UCS Manager is the embedded software that unifies system components into a seamless, cohesive, system

No specific word on pricing or availability, but is providing the general availability for Q2 2009 (during the Q&A session Cisco mentioned April 09), which means that VMware vSphere will be likely available in Q2 2009.

Update: As usual, Scott Lowe has some brief but very interesting details to add to the UCS story.

Labels: BMC Software, Cisco, EMC, Intel, Microsoft, VMware

Rumors of a possible EMC/VMW acquisition by Cisco has resurfaced.

virtualization.info has discovered some circumstantial evidence which combined could mean that something huge is about to go down.

• Cisco is raising cash for possible acquisitions, as reported earlier today.
• Yesterday’s SEC filing is evidence that someone is hoarding VMware shares.
• At Cisco Networkers 2009 a tighter Cisco/VMware/EMC strategy was evident.

Monday’s SEC filings shows that Cisco posted a prospectus on raising $4 billion in senior bonds. The book building is run by all the major investment banks and is closing on February 17.
Cisco must be really confident for such a major issuance in these market conditions, but Standard & Poors is giving the senior unsecured notes an A+ rating with a stable outlook.
Cisco will use $500 million of the $4 billion to repay short term debt.  When combined with sizeable cash holdings, this leaves them with with $4.7 billion in cash at the US parent company. According to CNET that amount excluded cash holdings at subsidiaries overseas.

That is not enough for a full takeover as the market cap of EMC is around $25 billion and VMware about $10.5 billion, but a possible stock swap with a cash settlement sprinkled on top could certainly interest EMC investors (Cisco currently hold 1.7% of the total outstanding stock).

VMware holds about $1.8 billion in cash, so a possible deal could be $6.5 billion in cash and $6-7 billion in Cisco stock (Cisco would have to pay at least a 20% premium here).

EMC holds about $5.8 billion in cash and $1 billion in short term investments,for a combined $8.2 billion (with 84% VMware ownership) in cash equivalent. A possible deal could then be $13 billion in cash and $15-17 billion in Cisco stocks.

Another piece of the (possible) puzzle is some interesting moves in VMware stock holders lately.

When a company acquire above 5% of the outstanding shares in a public company, US laws require them to file a SEC 13G form, reporting their interest to the stock market.
It must also be clearly understood that the party acquiring the stake in the company is only a passive investor, and does not intend to exert control.

The 13G must be filed within 10 days after acquiring the stocks.
On February 10 UBS filed on behalf of several accounts.
These are usually anonymous investment accounts so we do not know who is hiding behind UBS, but surely someone thinks VMware is a good investment.

The holdings made public are:

This is a total of 26,078,227 shares, representing 6.7% of the outstanding shares.

The reason for the different percentages is due to EMC chose to split the VMW shares in two stock classes when it took VMware public in 2007.
The shares have different voting rights and are divided in class A and B common shares.
Even though just 90,448,000 shares are listed on NYSE, there are a total of 389,602,066 outstanding.
EMC still owns 327,000,000 shares, representing 83,4% of the company.
This means UBS clients are currently controlling about a quarter of the NYSE listed shares.

VMware had a profit of $290 million on revenues of $1.9 billion in 2008.
With a valuation of $10.5 billion that represents a P/E in the low thirties, a very high number.
If we look at the pure financials and EMC's controlling stake, VMware is simply not worth this even with a projected 50% growth rate.
It is still far better than the P/E the company had when it was valued at $45 billion in October 2007.

But for Cisco, both VMware and EMC would have a significant strategic value.
With cloud computing portrayed as the future of computing, a merger with EMC would be a perfect match.

Cisco are already partnering with Dell, EMC and VMware, they would be able to provide a single vendor solution of the entire stack with an OEM deal with Dell.

Cisco have already very thigh integration between Vframe and VMware vCenter. They could provide the 10,000 feet management and automation platform, with a unified I/O fabric with some distributed storage at the back end from a single vendor.
So maybe the upcoming Cisco blade system codename California is more than just the result of a business partnership.

A Cisco/EMC/VMware entity would offer a very compelling cloud computing platform, even though they don't control an API like Amazon web services, Google Apps or Microsoft Azure.

Labels: Acquisitions, Cisco, EMC, VMware

Last week mainstream news magazines Network World and Business Journal suggested that two major IT vendors, Novell and Dell, are ready to make some acquisitions in the virtualization space.

Network World is reporting the Novell President and CEO’s words:

...Novell is now planning to extend the technology to provide tools to users that will enable them to move workloads from virtual environments to a cloud computing model…

Business Journal instead is speculating that Dell may want to acquire Egenera, countering the HP’s acquisition of Opsware:

Dell officials have suggested that it’s time for the company to do more deals to expand its revenue base to compete with rivals such as Hewlett-Packard Co. and IBM Corp.
The question is: Will it gamble on large acquisitions or continue with a track record of relatively conservative deals?

On top of the rumors above, this week CNET is reporting that Cisco plans to sell $4 billion in bonds to raise some cash.
Part of this money ($500 million) will be used to pay floating rate debt. The rest could be used to buy some somebody at the virtualization shopping mall.

CNET goes as far as suggesting that Cisco may want to buy EMC, but that’s definitively more expensive than $3.5 billion.

Labels: Acquisitions, Cisco, Dell, Egenera, EMC, Novell

Yesterday EMC and Microsoft signed a 3 years extension of their strategic alliance (now ending in 2011).

Part of the agreement involves virtualization, which is pretty odd considering that EMC owns 80% of VMware and that VMware can be seriously impacted by the endless amount of free virtualization products/technologies that Microsoft released and will release in future.

The thing is rather comic as part of the agreement (published by both companies PR departments) includes:

Microsoft offers one of the fastest-growing and most cost-effective virtualization solutions from the desktop to the datacenter, including the ability to manage both physical and virtual environments from a centralized management console. EMC’s technology solutions enable storage, protection and management of information in Microsoft virtualized environments including Windows Server 2008 Hyper-V, Microsoft System Center, and jointly supported mission-critical workloads such as Microsoft Exchange Server, Microsoft SQL Server and Microsoft SharePoint Server.
EMC Consulting’s Application Practice, a thousand-person strong team with deep Microsoft knowledge, provides expertise in assessing, planning and implementing Microsoft’s technologies in a wide array of virtualization solutions.

Now, coopetition is something that every customer can understand but believing that the EMC consulting division will recommend (or support) the implementation Hyper-V over VMware seems way too much.

Steve Ballmer answers to CNET on this very point with a hard-to-believe statement:

We're not sitting here pretending we're partnering with VMware. That's more competition.

With EMC, which is a large majority owner in VMware, but is also independent, there's a lot that rides on virtualization. The fact of the matter is the storage business is being transformed also by virtualization. And virtualization is transforming the storage business. We want to do very well in virtualization. While Joe may own 80 percent of VMware, he still thinks it's a good idea to sell storage in places where perhaps we'll win as opposed to VMware…

(the entire interview below definitively deserves a read)

EMC always waved the VMware independence and its desire to not influence the virtualization vendor, but at the end of the day, as Patrick O’Rourke at Microsoft says, VMware provides EMC $200 million direct profit /year plus additional indirect profit positively influencing the stock trading.

Assuming EMC will really do its best to play fair with both VMware and Microsoft on virtualization, the real question is: how VMware will react to this?

At this point it’s legit to suspect that this agreement is the real reason why Diane Greene couldn’t stay as VMware CEO and had to be replaced by Paul Maritz (a former Microsoft executive).

While wondering about this last point it’s worth to recap the current status of the some key strategic alliances in the virtualization world:

• Microsoft, which is now seriously partnering with EMC, is also seriously partnering with Citrix which is now seriously partnering with Intel which was rumored to be interested in buying VMware away from EMC.
• EMC, which is now seriously partnering with Microsoft, owns 80% of VMware which is now seriously partnering with Cisco which owns 1,7% of VMware

So, let’s see, this story will end up with VMware and Citrix seriously partnering together?

Labels: Alliances, EMC, Microsoft, VMware

At the beginning of December 2008 virtualization.info broke the news about the upcoming entrance of Cisco in the x86 server market, revealing some details about a massive blade system codenamed California that will be powered by VMware technology (and probably by EMC storage).
Only two months later the rest of the worldwide press (including mainstream newspapers like the New York Times) confirmed the information.

Cisco (as well as VMware and EMC) stays mum about this project, besides the company’s CTO, Padmasree Warrior, admitted the future entrance in new markets with something called Unified Computing.
It’s even unclear when the three will announce the partnership (VMworld 2009?).
Despite that, we may have the first pieces of the puzzle. And it’s coming from EMC.

Yesterday in fact, Chad Sakac, Senior Director of VMware Strategic Alliance at EMC (and Top Blogger 2008 for virtualization.info), published one of his amazing posts highlighting the vision of a private cloud in a box:

…

Point 1: It presumes a 100% virtualized datacenter (at least as far as x86 workloads go).   What can we do to make any x86 workload a candidate for a VM, and how do we help customers accelerate that transformation.

Point 2: Every Layer of the physical infrastructure (CPU, Memory, Network, Storage) need to be transparent.   Transparency means "invisible".   This implies a lot, and implies that the glue in the middle, like a general purpose OS, needs to provide the "API models" for those hardware elements to be transparent. 

Point 3: Every Layer of the physical infrastructure needs to be able to think/understand/respond to "VM objects" (or more accurately, groups of VMs that define applications and application SLAs).  These groups of VMs that define the application become central, both as a way to get fast value (Virtual Appliances), and also for the infrastructure to support.   Long and short - the Network and Storage need to be "VM-aware".

…

Of course Sakac published the article as a personal view of the future, but his point of view is pretty reliable as, by a fortunate coincidence, he co-presented with Steve Herrod, CTO at VMware, and Ed Bugnion, CTO at Cisco, at the last VMworld 2008 (and will do again at the upcoming VMworld Europe 2009).

So, just in case, be sure to read the whole piece as it’s the best indicator publicly available today to understand what these three vendors will do in the near future.

Labels: Alliances, Cisco, EMC, VMware

Just two days ago Dell took the stage announcing a number of new product and services focused on virtualization.
Easy to imagine, the most interesting piece of their news release was about a new feature called Auto-Snapshot for VMware Infrastructure, a VirtualCenter plug-in available at the end of the month for free to any EqualLogic SAN customers.

Of curse EMC, fully committed to invest on its own subsidiary VMware, had to answer in an appropriate way: the company announced a new version of its Replication Manager for VMware Infrastructure.

…

With the latest version of Replication Manager, management of copies and complete recovery of both physical and virtual environments is handled through a single console.  Now, the EMC data protection software provides integrated array replicas at the VMware virtual machine level and integrates with VMware ESX Servers and Virtual Center APIs to ensure virtual machine consistency.  This streamlines virtual machine file system (VMFS) replica management by providing near-instant, virtual machine consistent backup and recovery of VMFS delivered via EMC’s array based snapshot and clone technology.

This new functionality can be used for direct integration with VMware VMFS providing instant VMFS level backup and virtual machine level restore.  Automating and scheduling VMFS replicas has become much easier through intuitive easy-to-use wizards and a point-and-click user interface.  Customers can leverage replicas created by Replication Manager for a single virtual machine level restore through VMware’s VirtualCenter management software…

The new version of the product, Replication Manager 5.1 Service Pack 2, is available now.

Looking at the latest announcements It’s clear enough that virtualization is not only boosting the storage sales. It’s also exacerbating the competition as the storage layer will become one of the key differentiation in a world where the hypervisor is a commodity and the customers look for VDI and data center automation.

Labels: EMC

It’s obvious that owning VMware grants some benefits to the parent company EMC, but so far they never appeared too evident.
Now EMC decides to show some muscles and prove that the investment on VMware wasn’t limited to its acquisition in 2003.

On Tuesday the company announced its new enterprise storage array, the CLARiiON CX4, which features a series of features specifically VMware.

Chad Sakac, Senior Director of VMware Strategic Alliance, is becoming the new public face of EMC through its personal blog and wrote a long insight about the strategy behind the new CX4:

…in the VMware environment my main interest is in the UltraFlex I/O modules.

Why are these important?   The following are true statements from where I sit, and lead (at least for me) to a couple obvious conclusions of where datacenters are headed:

• Any x86 workload can be virtualized, and what can be done, will be done (we've shown only a small sampling of that here, here, and here)   There's too many good reasons to do this.   This will include all sorts of workloads that even on their own, have a heavy I/O impact.  Put them together and it's straight addition.
• Consolidation ratios are only going to increase.    With Intel (and in this cycle, AMD to a lesser extent - but I'm sure they will come out swinging) making a quad core proc for $250 now, and setting clear expectations for 8-core and more in 2009, and memory innovation to come, we will quickly move from 10:1 to 20:1 (I would argue we're already well past that!) to 40:1 to 100:1 and beyond. 
• BTW, please think about what that sort of hyper-consolidation future implies about: 1) Memory Page Sharing (aka memory dedupe) and about those that CAN do it (VMware) and those that can't (Hyper-V and Xen); 2) whether you care that you can do live, non-disruptive movement of VMs when you have 100 on a single host - is that going to become more important, or less?
• The bottleneck is moving to the I/O layer (both the network and storage transport and the back-end).   This is particularly acute on network and IP storage today (again, know that I'm an IP super-fan, and no-fanboi of FC for it's own sake) - where many, many GbE interfaces off a single server are common, and blades once again come into vouge, not for power/space/density issues (VMware makes the only question power/space/density per VM the question) - but rather for IO aggregation/virtualization/management reasons.
• Above all, flexibility is paramount (i.e. the ability to non-disruptively adapt to unforeseen changes) with things like Vmotion and Storage VMotion - and those constructs will increasingly appear in all parts of infrastructure.

Now, making storage built for VMware is only part of EMC's strategy - our view is that everything needs to adapt to a world where nearly every host is a hypervisor, and every app is a VM or VM appliance.   This affects infrastructure operations (backup/recovery/DR, etc), management (understanding and adapting to pervasive mobility, PtoV mapping and relationships) and skillset (we're at 400 VCPs and still adding at 50/quarter)…

Please note that this is the only major announcement that EMC made at the Pacific Crest Technology Conference.
The company didn’t unveil any acquisition, merge or spin-off as rumored few days earlier.

Labels: EMC

The usual amount of rumors about EMC and its subsidiary VMware reached an unprecedented level when a suspect number of stock options were traded over the last week.

The Wall Street Journal, Reuters and others are reporting at least a couple of rumors:

• EMC may be acquired by Cisco
• EMC may finally spin-off VMware 

The first scenario is particularly interesting: Cisco dreams a liquid computing future but at the moment the company has a firm leadership only in the networking area; EMC and VMware could fill the holes in the storage and platforms area to complete the vision.

As further confirmation that something is about to happen, in July the company’s Senior Vice President and General Manager of Data Center, Switching and Services Group answered the question:

Q: Do you plan to invest in another hypervisor vendor, similar to your relationship with VMware?

A: No announcements to date. We're continuing to work with all the hypervisor vendors. We are interested in virtualized data centers and to the extent that hypervisor and virtualized servers exist in the data center we think that's a very powerful construct for customers and one that's going to take network support.

Nonetheless in June the company’s CEO, John Chambers, explicitly said that Cisco is not interested in buying VMware.  Maybe that was an attempt to clarify that EMC has to sell all or nothing.

Some financial analysts expect the news to be announced later today, at the Pacific Crest Technology Conference, where both EMC and VMW are present.

Update: The EMC calendar for investors now includes an announcement set for tomorrow August 5 @ 10am EST.
The speaker will be Dave Donatelli, President of Storage Division.

Second Update: virtualization.info has received an anonymous tip suggesting that tomorrow EMC will unveil its CLARiiON CX4.

This is more than enough to justify the announcement planned for tomorrow, but it seems not enough to explain the abnormal trade of options of last week.

Labels: EMC

With a very short news just published by several press agencies VMware announces that its popular (and honestly beloved) CEO, Diane Greene, has been replaced by Paul Maritz.

Paul Maritz is the President and General Manager of Cloud Computing division at EMC, with a 14 years old career in Microsoft where he was Vice President of the Platforms Strategy and Developer Group.

It’s clear that VMware is working to enter the cloud computing space, but replacing a highly successful CEO like Diane Greene doesn’t seem the best way to do that.
Additionally, it’s odd that Maritz’s wikipedia entry is already updated with the new position while the official announcement didn’t provide any detail about the reasons behind such a sudden replacement or which kind of involvement Greene will have in the company in future.

It’s worth to highlight that the VMware’s Chief Scientist, Mendel Rosenblum, is also her husband.
This replacement, if imposed by the parent company EMC, may have a huge domino effect on the whole VMware management team.

Update: Some sources are reporting that Diane Greene was fired by the board and immediately replaced.
virtualization.info is unable to confirm this news, but we can speculate on the reason: the attempt to unchain VMware from EMC control, selling to another, more interesting partner like Intel.

It’s well know in fact that Diane Greene and Joe Tucci, EMC’s CEO, had a hard time working together since the early beginning.

Second update: Multiple news magazine are confirming that Diane Greene didn’t resign but was replaced.

The key question is not just why the board fired the VMware CEO, but most of all why it replaced the CEO with somebody totally unrelated with the company.

In normal conditions, the safest thing to do would be appointing the next charismatic person from the original executive team that led VMware before the EMC acquisition in 2003.
This would have avoided the panic and confusion among the employees, which are already reacting in a negative way. But EMC CEO preferred to pick a just arrived executive (Maritz arrived in EMC just in February 2008, after the acquisition of its company Pi) with a lengthy career at the VMware’s worst enemy.

A possible explanation is that Tucci couldn’t trust anybody in the VMware team and was obliged to appoints somebody totally outside the Greene’s influence.
And this makes sense only if the whole VMware’s management team was cooperating in something that implied the CEO’s removal.

Now it’s critical to understand what Mendel Rosenblum and the others will do. On their moves depend the confidence that VMware can maintain the market leadership against Microsoft.

Third update: At the end of the day the VMW performance suffered a –24.44%, translating in billion of dollars in losses:

Almost every news magazine reported that the Greene removal depended on the negative financial performance expected for the Q2 2008, lower than the forecast.
This is simply impossible: some slightly lower results would never be enough to justify the departure of a successful and popular CEO like Diane Greene.

EMC will have to provide extensive and credible explanations on what happened today to recover the investors’ trust and avoid an even lower result tomorrow.

Fourth update: The Diane Greene profile as VMware CEO has been already replaced.
Meanwhile ValleyWag published a small insight about Paul Maritz.

Fifth update: BusinessWeek reveals that the Board of Directors offered to Diane another position in the company and she refused. Obviously the magazine can’t tell what conditions she’d agree on.

Sixth update: NetworkWorld reveals some critical details about what happened at the Board level.
Two members of eight, the only two that are not employed at EMC, were against the decision to remove Diane Greene: Dennis Powell, representing Cisco, and Reene James, representing Intel.

Cisco and Intel are exactly the two key firms that were rumored to be interested in the VMware take over during the last months, even if just few days ago Cisco CEO officially dismissed any interest in buying the company.

Cisco is not happy with the decision to remove Greene and as direct result just retired $78 million from its $150 million investment made before the last year VMware’s IPO.

The domino effect has just started.

Seventh update: virtualization.info published an exclusive document submitted by a VMware employee, revealing some critical details and exposing the confidential emails sent to the company by Joe Tucci and Paul Maritz.

Eighth update: Two days after the announcement (July 10) VMware filed a form 8-K to formalize the replacement of Diane Greene.
The document clarifies that the departure would be treated as a Termination without Cause.

Nineth update: In the sixth update above we reported that Cisco retired $78 million from its investment in VMware, trusting NetworkWorld source.
This is incorrect. Cisco lost that amount because of the stock performance but didn’t operate any modification on the amount of shares it owns.

Labels: EMC

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%

Labels: EMC

Quoting from Reuters:

Computer data storage company EMC Corp. does not plan to reduce its stake in its VMWare subsidiary for at least two years after an upcoming initial public offering, Chief Financial Officer David Goulden said on Wednesday.

...

EMC's April filing with the U.S. Securities and Exchange Commission said the IPO would raise up to $100 million...

Read the whole article at source.

Labels: EMC

TechWorld reports EMC silently acquired Indigo Stone (just like VMware did with Propero), a UK firm focused on hardware agnostic backup solutions.

This acquisition may be irrelevant for VMware business: in this years EMC added to its portfolio at least a couple of backup solution (NetWorker, obtained by Legato acquisition, and Retrospect, obtained by Dantz acquisition) without reaching any kind of serious integration with subsidiary virtualization plaforms. But a statement from Todd Cadley, PR Manager at EMC, perspects a new opportunity:

Indigo Stone is complimentary today to Avamar, NetWorker and VMware. HomeBase - the product from Indigo Stone - provides profiling and protection for server system state, while Avamar and NetWorker provide protection for user and application data. In VMware environments, Indigo Stone provides server recovery from physical to virtual and from virtual to physical.

Read the whole article at source.

Labels: EMC

Quoting from the EMC official announcement:

...

Answering customer demand, ControlCenter 6.0 offers comprehensive support for VMware Infrastructure, including discovery, problem management, compliance, change management, provisioning, and reporting of VMware ESX Server host and guest servers —fully enabling SRM in virtual environments. EMC ControlCenter complements VMware's VirtualCenter software by providing end-to-end storage relationship information -- from a VMware ESX server host to the physical array devices. Users can view properties, capacity and usage information for a VMware ESX server host and corresponding virtual machines. The solution discovers individual VMware ESX Server guests – including guest name, OS version and IP address – and reports the capacity of virtual disk files and raw storage devices mapped to each virtual machine guest. ControlCenter 6.0 also enables users to provision, mask and zone storage to VMware ESX server hosts.

Labels: EMC

Microsoft answer on recent VMware whitepaper attacking licensing strategy about virtualization arrived quickly, brief and allusive.

Mike Neil, General Manager of Virtualization Strategy at Microsoft, commented the paper to virtualization.info this way:

Microsoft believes the claims made in VMware's whitepaper contain several inaccuracies and misunderstandings of our current license and use policies, our support policy and our commitment to technology collaboration.

We believe it's better to resolve VMware's claims between our two companies so that we can better serve customers and the industry. EMC is a long-time partner of Microsoft. We've extended this courtesy to VMware due to our mutual customers and partnership with EMC. We are committed to continuing to collaborate with VMware as we have been doing on regular basis. Consistent with this, Microsoft believes that we will be able to accommodate a mutually agreeable solution between our two companies and clear up any existing misunderstanding with regard to the points raised in the whitepaper.

While suggesting a pacific resolution of this case (which would require a public rectification from VMware), Microsoft is clearly recalling its partner EMC for the unprecedented attack of its virtualization subsidiary.

EMC announced launch of VMware Initial Public Offering (IPO) for this summer and a compromising of Microsoft partnership could lead to a remarkable damage for stock performance. An undesired risk for EMC which is not obtaining Wall Street's benevolence since a long time.

Update: SWsoft Director of Technology, Ilya Baimetov, decided to take part in this odd competition, extending the endless competition with VMware and indirectly remarking the new partnership with Microsoft.

On his corporate blog he commented the paper defending Microsoft efforts in changing its licensing model, and remembering how VMware itself is very closed on its standards.

Labels: EMC

With an unexpected move, just few weeks after receiving critics about value of acquisition, EMC just announced it will sell 10% of VMware with an Initial Public Offering.

Quoting from the official announcement:

EMC Corporation, the world leader in information infrastructure solutions, today announced its intention to sell approximately 10% of VMware via an initial public offering (IPO) of newly issued VMware stock. EMC will retain ownership of the remaining shares of VMware, and has no intention of spinning out or otherwise divesting this ownership interest.

...

VMware had record sales in 2006, growing revenues 83% during the year to $709 million. It finished the fourth quarter of 2006 with year-over-year revenue growth of 101%, delivering accelerating year-over-year growth for the fifth consecutive quarter.

...

EMC believes the IPO, which is expected to occur this summer, will provide both EMC and VMware with a number of significant advantages including:

• Improved visibility into VMware’s performance and growth relative to the market
• Strengthened VMware employee retention and recruitment through a broad-based equity award pool
• Reinforced commitment to VMware’s open platform strategy

...

The IPO is not expected to have a material impact on EMC’s 2007 business outlook. VMware will be a publicly traded entity upon completion of the transaction. Tucci and Greene are expected to be named to VMware’s Board of Directors...

The VMware IPO is a remarkable event.

Excluding Google, the Palo Alto company is one of the few IT companies which showing an impressive growth for several years in a row, and which is expected to further grow in the near future thanks to massive virtualization adoption trends research firms like Gartners, IDC and Forrester are reporting since 2003.

Nontheless the operation can hide some risks: current VMware owner, EMC Corporation, is not collecting notable successes in Wall Street since a long time, despite impressive results of VMware and prestigious acquisitions of RSA, NetForensics.

Google Finance helps understanding EMC trends since December 2003, when VMware acquisition boosted stock price to $15.59 in January 2004:

So there is a chance VMware stock could face same kind of acceptance because of EMC ownership. On the other side VMware IPO could improve EMC stock value itself.

Update: Patrick O'Rourke, Senior Product Manager of Windows Server Division, posted some provocative comments about the IPO on the official Microsoft blog.

It's a worthy reading.

Is Microsoft further influencing this move from EMC? Is this summer the last good chance to launch the VMware IPO before the biggest competitor seriously enters the space with its Windows Server Virtualization hypervisor (codename Viridian)?

Labels: EMC

J.P.Morgan doubts about real benefits of current relationship between EMC and its subsidiary VMware, as ZDNet reports:

EMC's acquisition of virtualization software maker VMware completed in January 2004 may have been one of the better deals in the technology sector in the last three years. But perhaps it's time for EMC to bid adieu.

...

VMware could eventually become a substantial component of EMC’s overall market capitalization. While this suggests that VMware should generate incremental value for EMC’s shareholders, EMC’s stock has not seemed to benefit from this at all.

Indeed, looking at EMC’s market capitalization from 2004 to the third quarter of 2006, we can see that our estimated value for VMware has increased from 2% of the total to 13% in 2006, yet EMC’s stock price fell 10% over the same time period...

Read the whole article at source.

Just few days ago EMC Vice President of Technology Alliances, Chuck Hollis, tried to clarify from his corporate blog why EMC and VMware relationship is so evanescent.

Labels: EMC

If there was any thought that storage giant EMC might spin out its virtualisation specialist and subsidiary VMware, which has established itself as the clear market leader, EMC's CEO Joe Tucci put that idea to rest ... “VMware is a tremendous asset and to separate it from EMC would be a huge mistake,” he said. “It’s not going to happen.”

Labels: EMC

... But the Authentica deal also signifies a new focus on external storage security. Whereas Captiva targets ILM and Acartus archives large volumes of content, Authentica offers software for securing email documents and data on mobile devices. By tying Authentica and Documentum together, EMC hopes to add an additional layer of security to users' documents. An EMC spokesman tells Byte and Switch that the startup's software will let Documentum users apply rights management policies to content, both inside and outside corporate firewalls...

Labels: EMC

• Storage Best Practices with VMware ESX Server 2.x
• Using VMware for Business Continuity and Disaster Recovery
• Using VMware for Server Consolidation
• Trends in Virtualization
• VMotion with CLARiiON Storage (Hands-on Workshop)
• VMware and Storage: Planning and Deploying with Fibre Channel, iSCSI and NAS
• VMware ESX with CLARiiON - Best Practices
• VMware Integration with Symmetrix
• VMware Remote Disaster Restart using CLARiiON Replication Software
• VMware's ESX Server Architectural Overview

Labels: EMC

Analysis EMC shareholders concerned about the stagnant nature of the company's shares should open up a new document file right now. They should address it to CEO Joe Tucci, and they should title it "Spinoff VMware and unlock precious shareholder value." ... Reasons to stay at home Without question, VMware has benefitted by becoming part of EMC. VMware's management has always been engineer rich. CEO Diane Greene is an incredibly successful businesswoman holding, with her husband, more than a 50 per cent stake in VMware, but she's a geek at heart. Before the EMC buy, VMware spent little on marketing and depended on word of mouth. In addition, the nature of the server partitioning market demands that customers trust that their software supplier will be around for a long time. You're not going to slice up hundreds of systems and pray that VMware stays in business or has the support you need when something goes wrong. You have to know that for certain. EMC helps on both fronts by putting its full marketing weight behind VMware, adding muscle to its support staff and slapping a big, trusted name on the VMware products. EMC gives VMware a more mature, solid presence. Reasons to fly There's, however, little reason to believe that VMware can't instill the same level of trust in customers and apply the same marketing savvy given its current size and the state of the partitioning market. ...

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