Intel Capital to buy $218.5 million share of VMware
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(InfoWorld) - Intel said Monday it plans to buy a $218.5 million stake in the software firm VMware, bolstering the companies' existing agreement to run VMware's virtualization software on Intel's processors. Intel has been selling chips since November 2005 with specialized technology that allows enterprise IT managers to use a VMware application that treats each hardware platform as multiple "virtual" platforms. The companies also cooperate on their marketing and product development strategies. The chip giant will make the purchase through its investment arm, Intel Capital, subject to approval by U.S. antitrust regulators. The purchase will be part ofÂ an IPO, in which VMware plans to sell 10 percent of the company. VMware has not set a date for that sale, but it is expected to happen in the second half of 2007. In addition to purchasing stock, Intel will also gain the power to appoint one of its executives to the VMware board of directors. However, Intel will still hold a minority stake in the company with just 2.5 percent of VMware stock, according to an IPO registration form filed Monday by VMware with the U.S. Securities and Exchange Commission. The majority of VMware stock -- 89 percent -- will be held by EMC, the enterprise data storage company that acquired VMware in January 2004. That investment has paid off well as VMware has grown quickly. VMware revenue rose 82 percent last year, from $387.1 million in 2005 to $703.9 million in 2006. VMware says that growth rate will continueÂ as currently just a small fraction of existing servers and business desktop and notebook PCs use virtualization software. At the same time, many companies use only a portion of their computing power because the latest multicore processors have allowed their processing power to grow faster than workloads. To solve that problem, businesses can use virtualization software to separate the operating system and application software from the underlying hardware. That allows them to combine multiple servers, storage, and networking units into pools of capacity they can allocate to wherever it is needed most, VMware said in the SEC form. Coming so close to VMware's stock offering, Intel's investment is likely to generate greater demand for the new stock, and for the virtualization industry in general, one analyst said. "Intel likes to know it has a more personal stake instead of waiting for market forces to advance the application of virtualization software," said Richard Doherty, research director at The Envisioneering Group. "It's not like that money was gathering dust on their shelf, but Intel's venture arm tends to trigger others to invest in an industry sector too." The purchase also underlines a growing problem for software firms that have historically charged their licensing fees per processor, Doherty said. In this age of quad-core chips and virtualized server networks, that model could spell trouble for enterprise software providers, who could see their customers doing more work with fewer seats of software. By taking a stake in VMware, Intel is indicating that it sees virtualization firms claiming some of that revenue. Also on Monday, VMware launched Lab Manager 2.5, a new version of its lab automation software. IT organizations use the application to efficiently manage their software development and testing labs, save money on IT management and deliver new software applications to market sooner, the company said. In a separate announcement, Borland Software said it would integrate Lab Manager 2.5 with its Lifecycle Quality Management application, SilkCentral Test Manager 2007. Together, those applications will allow software developers to test their applications across multiple configurations using virtual platforms, instead of having to own many separate, physical test labs, Borland said.
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Stocks to watch on Tuesday: ADVANCED MICRO DEVICES INC. , INTEL CORP. :
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Group adds muscle and white papers Exclusive Come Monday, the elusive Green Grid consortium that focuses on the energy consumption of data centers will announce the acquisition of two industry heavyweights - Intel and Microsoft, The Register has learned.â¦
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NEW YORK Veritas Software, the largest independent US storage software provider, will buy the e-mail backup company KVault Software for $225 million in cash, Veritas said Tuesday.
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Asset management company Federated Investors Inc. on Thursday said it will buy Alliance Capital Management Holding LP&#39;s cash management business.
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(InfoWorld) - Intel'sÂ deal with STMicroelectronics to create a new semiconductor company was a hit this week with IT investors, who continue to reward bold merger and acquisition moves in hard-fought tech markets like chips and Internet services. Rumors of aÂ Salesforce.com hook up with GoogleÂ andÂ Yahoo's continuing search for Web 2.0 companiesÂ also are stoking investor interest. Intel's deal with ST allows them to get immediate cash for money-losing operations while laying claim to future profits in the flash market. They are spinning off flash memory units into a new company, which will borrow money to pay the parent corporations cash for the deal: $432 million for Intel and $468 million for ST. The new company, as yet unnamed, will have annual revenue of $3.6 billion, ahead of rival Spansion, which is itself a spinoff from AMD. There were shadows on the deal, however. Though parts of the flash market are hot because the components go into cell phones and digital cameras, Intel has been losing money for years on its NOR flash memory products, more suited for storing code than multimedia files and considered less of a growth market than other areas of the flash sector. On balance, traders saw the deal as a clever way of protecting the parents while reaping immediate rewards for the investments they have made. When the deal was announced Tuesday, Intel shares rose to $22.99, up $0.36, and ST shares rose to $20.26, up by $0.38. Investors have been excited about deals in the most competitive areas of technology, including mature enterprise software as well as the burgeoning Internet services arena. Rumors of a possible new deal between Salesforce and Google this week combined interest in precisely these areas. Discussions between the two companies, reported Monday by The Wall Street Journal, played into long-time speculation that an outright acquisition of Salesforce would make sense: In one stroke, it would give Google a solid foothold in enterprise software-as-a-service technology, and it would give Salesforce the vast resources of the high-flying Internet search champion. The companies already cooperate in the development of a number of software projects. Salesforce shares jumped to $47.76 Monday, up by $1.96, while Google shares ticked up to $470.60, up by $0.30. The companies, however, remain silent on the matter. Yahoo shares fell Tuesday on the other hand, when officials quashed rumors that the company was going to buy social-networking site Bebo. Yahoo shares fell $0.43 cents to $28.92. While bold moves have been rewarded lately, the long-anticipated move by historically direct-sales vendor Dell into the retail market Thursday failed to get a rise from investors. Dell shares fell Thursday by $0.37 to close at $25.89. Financially beleaguered Dell, suffering from price pressure and competition from a rejuvenated Hewlett-Packard PC unit, has been applauded lately for getting serious about cost-cutting measures and a more flexible sales strategy. But a potential boost from the entrance in retail, which will seeÂ Dell selling desktop PCs at Wal-Mart, may have been dampened by the overall down market. Remarks this week by former Federal Reserve Board Chairman Alan Greenspan about the potential fragility of China's economic expansion weighed heavy on the technology-oriented Nasdaq. The Nasdaq, which has been riding high on strong technology company revenue this quarter, closed at 2537.92 Thursday, down by 39.13. Sometimes macroeconomic concerns trump sector issues.
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Thinstall hops into fat wallet All the investor capital jingling in VMware's pockets has given the virtualization giant a healthy appetite for acquisitions. VMware said today it's planning to buy Thinstall, an application virtualization software firm based in San Francisco for an undisclosed sum.â¦
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By Hiawatha Bray, The Boston Globe  Feb. 8--EMC Corp. of Hopkinton plans to turn virtual software into real  cash.   The company will sell 10 percent of its California software subsidiary  VMware Inc. in an initial public offering this year.
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These days, numbers just seem to blur together. Microsoft is thinking about paying $500 million for 5 percent of Facebook, which would make that company worth $10 billion. VMware, in which parent company EMC recently sold a stake to the public, is currently valued at $30 billion (that's just for VMware, not the whole of EMC).
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Lenovo Group said Wednesday it has acquired a majority stake in International Business Machines Corp.'s personal computer business for $1.25 billion, one of the biggest Chinese overseas acquisitions ever.
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Continuing its investing in software, HP to buy data center automation company in all-cash offer.
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Intel Capital will invest $218.5 million in VMware; the EMC subsidiary expects to raise at least $759 million in an initial public offering.
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InfoWorld - Intel will buy Havok, a provider of software and services used by videogame creators and movie special-effects teams, the company said Friday.
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Three years after being bought by EMC, VMware is going public.Â EMC announced plans Wednesday to offer 10 percent of its virtualization software subsidiary in an initial public offering (IPO).
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Intel Corp., the world's top  chipmaker, is set to increase its share of a growing global  semiconductor chip market this year to 12.2 percent, research  firm Gartner said on Friday.
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Intel Corp., the world's largest chip maker, will invest $218.5 million in virtualization software maker VMware Inc., the companies announced Monday.
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(InfoWorld) - As large enterprises embrace the concept of virtualization to more efficiently manage their information technology systems, vendors are now targeting the small-to-medium size market. VMwareÂ on Monday is introducing a new low-cost service plan to give small-to-medium businesses (SMB) a taste of what virtualization can do for them. It's entry level bundle includes a free download of the VMware Server software for virtualizing servers and a $1,500 support plan called Virtual Center. Although less than the $5,000 support program for enterprise customers, the $1,500 support plan is limited to three two-socket physical servers that could be converted into multiple virtual servers. If an SMB customer wants to virtualize more servers, the support would cost an extra $400 for each extra server. Virtualization refers to the practice of managing a data center holistically to make the best use of the hardware available, reduce the capital cost of new servers and the operational cost of electricity to run them. Virtualization software like VMware Server makes it possible for one server to run multiple software applications at the same time. VMware sees growth potential in the SMB market, given that 70 percent of 1.2 million downloads of the free VMware Server software since June 2006 have been to SMB customers, said Ben Matheson, vice president of product management for VMware, a division of storage vendor EMC. He defines small-to-medium businesses as those with fewer than 1,000 employees or an average of 100 physical servers in their businesses. "There is a lot of market awareness of the value of virtualization in the enterprise...but we think it's useful for all companies," said Matheson. He anticipates many of the SMBs downloading the free VMware Server are just taking virtualization out for a test drive. "There are definitely a lot of trials, getting it into their labs and using things like virtual appliances and testing them. But there is also quite a bit of production use," he said. Server vendors have also been making overtures to the SMB market. Hewlett-Packard began offeringÂ a Virtualization Assessment Service on Feb. 1 to analyze an IT infrastructure to see how it might benefit from virtualization. The service is being offered through HP's resellers who typically serve its SMB customers, while HP's own sales and engineering force tends to large enterprise customers. IBM even calls its initiative a "Virtualization Test Drive." IBM launched in 2006 a virtualization education and sales initiative targeted at SMBs. IBM said that more than 65 percent of their virtualization sales are driven by IBM partners targeting SMBs.