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This posting is provided "AS IS" with no warranties, and confers no rights. The opinions expressed within are my own and should not be attributed to any other Individual, Company or the one I work for. I just happen to be a classic techie who is passionate about getting things to work as they should do (and are sometimes advertised and marketed as being able to?) and when I can I drop notes here to help others falling in to the same traps that I have fallen in to. If this has helped then please pass it on - if you feel that I have commented in error or disagree then please feel free to discuss with me either publically or privately? Cheers, Dave
Thin Clients, VDI and Linux integration from the front lines.... Raw and sometimes unedited notes based on my experiences with VMware, Thin Clients, Linux etc.

So it looks like the gloss is coming off the VMware IPO? now that we are back down to the $70 mark I wonder how many people will stop and remember that this was an IPO of only $29?

Let's be honest here, regardless of the hype surrounding the stock and the IPO, most companies and advisors do not normally release a stock for IPO and price it at 30% or 50% of value? It was priced at $29 for a reason and now we are starting to come back to that.

If anything I feel sorry for those that are not intimately familiar with IT and VMware and bought in above $100 - but in all fairness we are in turbulent times and with the credit squeeze from the sub-prime issue hanging over this and this has clearly exasperated the issue.

Market Scan
Storm Clouds Ahead For VMware

When VMware unveiled the second generation of its virtualization software two weeks ago, the company seemed to be building on the foundation investors have gone wild for since its initial public offering in August. But now, with more competitors cropping up that are adding their own virtualization software to their products, the question is whether VMware shares can continue to soar.

The answer on Monday seemed to be “no,” as the stock tumbled 9.4%, or $7.40, to $71.44 at the close. To be fair most business technology companies fell Monday, but none took a beating quite like VMware (nyse: VMW - news - people ). International Business Machines (nyse: IBM - news - people ) fell 2.0%, or $2.08, to $101.97; Microsoft (nasdaq: MSFT - news - people ) slid 3.3%, or $1.14, to $32.97; and Oracle (nasdaq: ORCL - news - people ) tumbled 3.0%, or 61 cents, to $19.70. One of the few bright spots in the sector was Sun Microsystems (nasdaq: JAVA - news - people ), whose shares jumped 1.4%, or 27 cents, to $19.43.

VMware's "virtualization" software lets a single computer function like multiple machines, allowing companies to spend less on equipment and energy in their data centers. Right now VMware is the only company which concentrates solely on server virtualization, whereas its rivals bundle virtualization software with their products.

When it first had its IPO, VMware had near-exclusive claim on the idea of virtualization, but once its competitors caught on, investors realized the firm was going to be just one player in the larger virtualization market. Now virtualization software is being duplicated for free by Xen hypervisor and being added as a feature of products sold by Citrix and Oracle.

Canaccord Adams analyst Mark Kelleher said that the risk for VMware is that Microsoft decides to add virtualization as a feature for free in its products. “What you’ve seen is just some realization of where VMware fits in the world,” Kelleher said. “There’s a lot of competition coming into the market right now and I think some of that competition put a little more reality around VMware.”

....

Chowdhry says VMware is on borrowed time for one or two more quarters. “Then it will probably tank,” he said.

Storm Clouds Ahead For VMware - Forbes.com

Posted on Wednesday, November 28, 2007 8:29 AM IT Management , VMware and other Virtualization tools | Back to top


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