) recently announced that it is set to acquire Virsto, which
develops software that optimizes storage performance and
utilization in virtual environments. However, financial terms of
the deal were not disclosed.
Founded in 2007, Sunnyvale, CA-based Virsto had received
approximately $24.0 million of funding from August Capital,
Canaan Partners, InterWest Partners, Southern Cross Venture
Partners and Correlation Ventures. The acquisition is expected to
close by the end of first quarter of 2013.
Virsto software addresses the complexity that enterprises face
in the virtual environment, particularly related to virtual
desktop infrastructures (VDI), large software development and
test centers and business-critical applications. Virsto's
software helps in streamlining the processes by improving storage
performance at a much less cost compared to other software in the
According to VMware, Virsto reduces cost of storage per
desktop by as much as 70%. The acquisition will expand VMware's
storage product portfolio, which includes vSphere and vSphere
storage appliance. VMware also announced that its parent,
), is planning to license Virsto technologies, which will expand
its reach in storage architectures.
Currently, Virsto has partnerships with both
), closest competitors of VMware. Although, VMware announced that
post acquisition it will continue to support Virsto customers,
the future of these partnerships is not clear. This is due to the
fact that the primary strategy behind the Virsto acquisition is
to fight off increasing competition from Microsoft's Hyper-V
Acquisitions have played a pivotal part in driving VMware's
growth over the past few years. VMware has acquired approximately
18 companies over the last three years. We believe that VMware's
strong and innovative product pipeline along with its strategic
acquisitions will enable the company to drive its top-line growth
over the long term.
However, sluggish North American and European markets coupled
with modest IT spending environment are the headwinds going
forward. Moreover, the company's continued investments in
emerging markets, product innovations and acquisitions are
expected to weigh on the margins in the near term.
Currently, VMware has a Zacks Rank #3 (Hold).
CITRIX SYS INC (CTXS): Free Stock Analysis
EMC CORP -MASS (EMC): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
VMWARE INC-A (VMW): Free Stock Analysis
To read this article on Zacks.com click here.