Junctus Group

VMware gets double shot of good news

Microsoft announced today that it was slipping (gasp) the RTM date of Windows Server 2008 into the 1st calendar quarter of 2008. That means the Viridian hypervisor will be another 6 months or more getting to market, giving VMware more time without a serious competitor. (Will Microsoft buy Citrix, who just purchased Xensource? Citrix and Microsoft have long had a close relationship…)

Also today, General Dynamics C4 Systems, primary contractor with the NSA for development of a highly secure workstation, announced it has selected VMware as a sub-contractor for the project. The idea of running systems of different security/trust levels in the same workstation is intriguing, and would be a major savings if it can be done successfully.

Oddly enough, VMware stock [VMW] closed down over 2% today.

Virtualization, Citrix, and XenSource

I’ve been telling people that virtualization is going to rock their world, one way or another. If you’re one of those who thinks that Virtualizaiton is a passing fad, think again: Citrix just plunked down something north of $500 Million to buy XenSource, which appears to me to be the 3rd horse in a 3-horse race.

Barron’s has an interesting take on this, including speculation about who will subsequently buy Citrix. Cisco, Microsoft, and HP were all mentioned. Citrix has been very cozy with Microsoft historically.

Let’s think for a moment: Why would VMware have allowed both Cisco and Intel to purchase “sweetheart” positions just before their IPO? Cisco plunked down $150 million on July 27th¹, and Intel put their money down July 9th to the tune of over $218 million. Aside from providing a pretty paper profit for their partners in a month’s time or less, why would VMware do that?

Could it be that we’ll see the VMware hypervisor ensconced in silicon? What about Cisco being able to virtualize all those servers that are needed for a robust IP-telephony environment, or indeed, for voice and video combined?

¹ Wall St. Journal

Virtualization Expert

I was invited to speak at Pacific Crest Securities’ Technology Forum in Vail last week. It was very interesting to see the questions that large institutional investors asked the CEOs, CFOs, CDOs (I didn’t know that there was a Chief Development Officer title), and other senior executives. It was a virtual who’s who(m) of technology companies.

I was on Brent Bracelin’s panel the first afternoon, with a representative of XenSource , and a fellow from Foedus to discuss Virtualization — how it is affecting IT, how it will affect IT in both the near term and longer term, effects on hardware vendors, and more. It was very gratifying, a standing-room-only crowd.

The second afternoon I participated in a much smaller roundtable discussion that had all seats reserved and a waiting list 3 times the number of seats available. I think it is safe to say that there is great institutional interest in virtualization as a disruptive technology… and I note that the VMware (NYSE: VMW) IPO was priced at $29 per share, and opened its first day at $52. I only wish I’d owned some.