EMC acquires server specialist VMware - News - Software

To print: Select File and then Print from your browser's menu

--------------------------------------------------------------
This story was printed from ZDNet Australia.
--------------------------------------------------------------

EMC acquires server specialist VMware

By Stephen Shankland, 0
December 16, 2003
URL: http://www.zdnet.com.au/news/software/soa/EMC-acquires-server-specialist-VMware/0,130061733,120281940,00.htm

Storage specialist EMC announced plans Monday in the U.S. to acquire VMware, a start-up that sells software to make servers more flexible, for about US$635 million in cash.

The move will help EMC reach further into the world of utility computing, a trend sweeping the industry as companies search for ways to make information technology easier to manage and more efficiently used, the Hopkinton, Massachusetts-based company said.

VMware and EMC are in different realms, though. Whereas EMC is geared toward storage systems and data-management software, VMware's software is geared for use on servers.

"It is going to push EMC a bit into areas they haven't been comfortable with before," said Illuminata analyst Gordon Haff. "A lot of what VMware does is...server-centric. It certainly is a movement a long way from traditional big storage iron."

But EMC chief executive Joe Tucci said separation between storage and servers is becoming a thing of the past. "Until now, server and storage virtualisation have existed as disparate entities. Today, EMC is accelerating the convergence of these two worlds," he said in a statement.

The technology will help EMC join different manufacturers' information technology into "a single pool of available storage and computing resources," the company said in a statement.

VMware's software lets a single server run multiple operating systems simultaneously on different "virtual machines," a technology well developed in expensive mainframe computers, maturing in Unix servers, and now arriving in lower-priced machines based on Intel processors.

VMware, based in Palo Alto, California, is profitable and was planning an initial public offering.

The acquisition, expected to close early in the first quarter of 2004, could reshape alliances in the growing market for Intel-based servers. VMware has been a close partner to IBM and Hewlett-Packard and also has alliances with Dell and Unisys.

IBM's and HP's comfort working with a neutral start-up may not carry over to EMC, a competitor in the storage domain, Haff said.