EMC sells stock to fund development of VMware

Storage supplier EMC sold 10% of its VMware virtualisation software business last week, in a move that the company said would release capital for further development of the virtualisation platform.

David Goulden, EMC executive vice-president and chief financial officer, said, "The proceeds from this transaction are expected to provide VMware with the financial resources it needs to achieve its full growth potential."

VMware president Diane Greene said, "We expect that the IPO will help us execute on our vision of an industry standard virtual infrastructure. It should enable us to continue to invest in great product development and grow an even stronger partner ecosystem."

Server virtualisation is regarded as the next big thing in datacentre computing. John Humphreys, programme director for enterprise virtualisation at analyst firm IDC, said that, as well enabling hardware consolidation, a growing number of organisations were using virtualisation technology for business continuity and disaster recovery.

With spending on server virtualisation estimated by IDC to increase to £7.5bn worldwide by 2009, virtualisation software providers such as EMC, Novell and Microsoft are ramping up product development.

IDC said virtualisation would continue to be adopted by enterprises in the next 18 months, becoming more widely available on desktops and mobile devices. This would allow businesses to reduce costs and increase security.

Microsoft is expected to update its Virtual Server hypervisor in the fourth quarter of 2007. Meanwhile, Novell and Intel are collaborating on an initiative to speed up virtualised Windows running on the Xen open source virtualisation platform.

Novell has nailed its colours to the open source mast, but last autumn it signed an agreement with Microsoft to improve they way the firms' software works together.

Novell is working with Intel to boost the network performance of the Windows operating system running in Xen-based virtual machines. In the past, Linux running on Xen achieved better performance than Windows on Xen, said Novell.

Windows uses the hardware virtualisation features in Intel and AMD x86 processors in combination with the Xen hypervisor.

Novell is releasing the software in an open pilot project with Novell SuSE Linux Enterprise Server (SLES) 10. It will then be released to all users with Service Pack 1 of SLES 10, due to ship this spring with Xen 3.0.4. Microsoft will provide joint technical support for users running Windows Server 2003 R3 with Xen and SLES.

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