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It is migrating its desktop environment from Microsoft's Windows NT to XP. As part of the project, Merrill Lynch will deploy 27,000 licences of VMware's Workstation product on traders' desktops to enable access to legacy NT applications while running XP simultaneously.
The move will ensure backward compatibility with Merrill Lynch's legacy desktop environment while allowing the company to move to a newer technology.
Merrill Lynch will use VMware's server product to consolidate multiple physical servers onto larger systems, including some within the company's application development group.
Merrill Lynch, which tested the software extensively before committing to using it, will save millions of dollars from the move, according to a company spokesman who did not elaborate or further quantify the savings.
VMware sells software-based partitioning products that allow users to carve an Intel-based server into multiple virtual slices, each of which can run a separate Windows or Linux application.
The company's workstation product has shipped since 1999. VMware entered the server market last year.
The Merrill Lynch deal illustrates the growing attention the technology is getting from large companies.
"The numbers [of licences] at Merrill speak for themselves," said Illuminata analyst Gordon Haff. "We are beginning to see VMware in some large environments."
A key driver is the software's ability to allow users to control Wintel server proliferation and exploit underused systems.