Software // Information Management
News
8/14/2007
05:35 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

VMware IPO Defies Falling Stock Market; Rises 76%

One analyst predicts that the virtualization software field "will become its own ecosystem," with Microsoft and VMware vying to lead in that space.

In a gravity-defying performance, VMware's initial public offering ignored a dropping stock market and rose from $29 to $51 by the close of its first day of trading, a gain of 76%.

The stock market as a whole took a drubbing. The Dow was down 207 points for the day, as renewed credit worries and a pessimistic report from Wal-Mart drove investors away.

But VMware's gain, with 38,238,000 shares changing hands, showed a huge appetite for a virtualization play in the computer industry.

"The market is showing it's finally realizing how valuable and disruptive VMware is," said Ashmeet Sidana, venture partner at Foundation Capital and a former director of VMware's ESX Server hypervisor product line. VMware's VMware Server, ESX Server, and Virtual Infrastructure 3 have made VMware the market leader in virtualization software, according to IDC.

VMware is owned by EMC, and EMC's sale of 10% of the company raised $957 million for future VMware expansion and development. Early trading in its 33 million share offering sent VMware share up as high as an 84% gain before falling back to the 76% gain and $51 figure.

Shares of the software unit of EMC were priced at $29 Monday, raising $957 million and coming in at the high end of the company's forecast range.

Sidana predicted that the virtualization software field "will become its own ecosystem," with Microsoft and VMware vying to lead in that space. Microsoft offers Virtual Server and has plans for a hypervisor, Veridian, as an offering with the upcoming Windows Longhorn Server.

Many additional virtualization startups will drive the ecosystem, with venture capital funding behind them, Sidana predicted.

Comment  | 
Print  | 
More Insights
The Agile Archive
The Agile Archive
When it comes to managing data, donít look at backup and archiving systems as burdens and cost centers. A well-designed archive can enhance data protection and restores, ease search and e-discovery efforts, and save money by intelligently moving data from expensive primary storage systems.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July 22, 2014
Sophisticated attacks demand real-time risk management and continuous monitoring. Here's how federal agencies are meeting that challenge.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A UBM Tech Radio episode on the changing economics of Flash storage used in data tiering -- sponsored by Dell.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.