VMware Announces vFabric 5 to Target Enterprise Market

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VMware (NYSE:VMW) on Tuesday unveiled its new application platform vFabric 5 following a chain of acquisitions that include SpringSource and Digital Fuel. VMware also acquired Socialcast and SlideRocket in the past two months.

We currently have a $94.85 Trefis price estimate for VMware , about 5% above the current market price.

vFabric 5 and Cloud Foundry

Earlier in April this year, VMware announced the Cloud Foundry, an open source Platform-as-a-Service (PaaS) platform that supports public clouds and private clouds regardless of whether the underlying server runs VMware or not. This placed VMware in competition with other PaaS providers like Salesforce.com ( CRM ), Microsoft (NASDAQ:MSFT) and Rackspace.

vFabric 5 is an on-premise Java application platform designed to run atop VMware's vSphere hypervisor and virtualization-management software. It is a direct competitor to middleware software provided by IBM and Oracle products that help connect information in huge enterprises. In 2010, IBM generated nearly $25 billion in revenues through its middleware software offerings, which gives an idea of the size of the opportunity for VMware if it can penetrate this market.

While VMware controls the virtualization of some 80% of servers worldwide, it is still very small player in the application platform market. As VMware expands its platform strategy, it will need a better way to integrate with public cloud services to integrate cloud and on-premise offerings.

We currently estimate that Java Application Tools account for less than 1% of our price estimate for VMware . However this could change drastically as VMware expands into the application platform market over the years.

See our full analysis for VMware

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: CRM , EMC

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