Monday, December 15, 2003

Pretty big news in the virtual PC market - EMC Buys VMWare; Forget The IPO

EMC is going acquisition crazy. They recently bought Documentum and Legato, and today made the somewhat surprising announcement that they are buying VMWare. It had seemed that the earlier deals were sort of desperation plays between large companies who were finding their business models smoked out from under them. This deal, however, is quite a bit different. VMWare is a Silicon Valley darling that was expected to go public early next year - and was considered one of the bright spots for the potential IPO class of 2004. Apparently, once the offer was on the table, they believed it was better to take what was in front of them. It will be interesting to see what EMC does with VMWare - as it's a bit far out of their usual business areas. However, if anything, this is a bad sign for those who believe that the IPO market is back.

Or perhaps VMWare folks just did not cherish the thought of finally competing with Microsoft head-on. I wonder what are the exact plans EMC has for VMWare, and how they think ti would fit into their strategy.


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