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Intel Invests $218M in VMWare, Preparing for IPO
RulerOf writes "TechNewsWorld is carrying an article detailing that Intel has made an investment in VMWare for $218.5 million in anticipation of VMWare's imminent IPO. With an expected value of $23-25 a share, VMWare's IPO shows a value of $950 million. This investment brings Intel to an approximately 13% ownership of the EMC subsidiary, and helps to strengthen ties between the two companies. According to the article, 'VMware's virtualization platform runs on Intel architecture and most deployments of the tools are on systems using Intel chips.'"
I wonder what the impact of this investment will be for AMD. I would hope VMWare will still support AMDs hardware virtualization architecture, and not just Intels...
Do I read correctly that they invested $218M and expect to have $130M after the IPO? That smells like some other motive than stock investing...
If sharing a song makes you a pirate, what do I have to share to be a ninja?
My only hope is that Intel doesn't skew it's architecture so much that it becomes incompatible and that AMD is left behind. Would be nice if AMD could partner up as well, or create a consortium for "next gen architecture and virtualization enhancements" kinda like how MMX, SSE etc came about for graphics.
The IPO is only for about 10% of the company, and Intel has pre-purchased about a quarter of that stock, so that would be about 2.5% of the new VMWare that Intel will own. Or at least that's what all the other reports are suggesting.
[Disclaimer: I work for EMC, but have no connection to VMWare; I have no inside knowledge of the IPO or related transactions.]
But it would be a 19,000 day supply of hookers and cocaine for bender.
Another main tool that I use is to judge a company is in how they handle contractors. In short, they are stll quite clueless. Contractors tend to do a lot of key work (in some companies, it is all the real work which gets done). A few years ago, they weren't hanlding contractors at all. This year, I got a call from them, and while I'm sure the manager thought otherwise, I could tell that they were feeding me a bunch of B.S..
For one thing, they were completely unable to move fast. Quality talent is hard to find in Silicon Valley these days (I know, as I'm in the process of trying to hire top talent myself). It was going to take VMware two weeks(!) just to line up the interviews. Excuse me, but while you can get away with this for fulltime people, it doesn't cut it with contractors. For a contractor, down time is unpaid time; and I'm not going to sit around waiting for anyone to push through the red tape. Things move fast for me, and in two weeks I can find a new gig starting completely from scratch (4 weeks tops, and that was during the dot-com bust).
Then there was other BS about having to work your way up, yadda yadda. Excuse me, but I've been hacking kernels longer than many folks have been alive. I'm a contractor, not an employee; nor do I want to go fulltime. You bring contractors in to do a job, get it done, and get out. "Working up" is for employees.
Oh yes, and then he had the gall to say that they didn't really like contractors. Well, nobody likes to pay contractor rates. But that's a really excellent way to alienate people. I appreciate the honesty though, and will avoid VMware in the future. So basically I told them to piss off (not in those words; as a contractor you learn to be far more diplomatic).
In short, I came away with the impression that VMware thinks they are so hot that they can afford to dink around and pull people's chains. Sorry, but it doesn't work that way. It might have in 2003. But not now. And especially since there are 50,000 H1-B's who are going to be leaving this year.
So, in short, I'm not impressed that this company has the fundamentals together to be a good investment. I sure wouldn't invest in them with.
I wish good luck to the folks at VMware. Their product has been extremely useful to me when I could get it to work. But honestly, you need to get off of your high horse and get back down to Earth. The valley is littered with the bones of other companies who had similar high opinions of themselves, but didn't have the basics down.
VMware's association with intel brings to mind some questions related to Trusted Computing. Now setting aside whether or not you like trusted computing, it does enable some valuable applications so it's going to happen. Now is all the implementations I've seen described there is a progressive trust is creates as each layer of the os-middle-ware-applications-data validates the next layer is unaltered. And all this starts with some trusted boot loader.
it's difficult to see anyway that around not having this seed trust be in some piece of unalterable hardware. And even though they are not doing trusted computing I would specualte that apple puts in a few hardware doo-dads so the software can validate it's running on apple hardware. (they may not be taking advantage of this yet but I bet it's lurking).
So then since it's likely that intel will be making the trusted computing hardware, will they grant the ability to emulate the hardware to their VM?
Some drink at the fountain of knowledge. Others just gargle.
So, now that VMWare has all of this money to throw around will they finally release a native FreeBSD player? Or maybe VirtualBox will beat them to it...or maybe anyone can do it besides Win4BSD because that is just not good software.
"I reject your reality and substitute my own!"
...but I suppose he'll switch to Fusion once it's final. http://parallelsvirtualization.blogspot.com/2007/0 6/intel-ceo-paul-ottelini-uses-parallels.html
You don't.
Beware of geeks bearing formulas.
See http://www.linuxdevices.com/news/NS4223741314.html
It looks like they want to make sure good virtualization software is available on their processors.
When can we expect to place our first buy on VMWare ? Any idea of when they will complete the IPO ? Informations/Suspicions ?
You can sell a limited amount of stock to a limited number of people before your IPO. Around here, you could sell to 35 people or companies, and I'm not sure how much you could sell. It differs by jurisdiction, though, I'm sure.
With Intel and VMware close partners, I'll bet VMware will have a say as to the next series of commands to be added to their x86 line.
They would never abandon AMD, but they could say that VMware gets better performance on an Intel chipset with the new XYZ command extension set.
It would be an excellent move, too. They wouldn't abandon any of the market, but it would tip the scales in favor of their new benefactor.
Weaselmancer
rediculous.
Sounds like the perfect investment plan to me - As long as they create a snapshot, if it all goes badly they can just push the right button and go again.
Dealing with lawyers would be a lot less tedious if they all looked like Casey Novak.
It's how the investment banks lock up the initial number of stocks. They only offer to sell it to others in their circles (special clients, special brokers, etc.). The only people getting rich off of the IPO are the investment bankers and their privileged clients.
The real purpose of an IPO, from the SEC's point of view, is to get the stock out at a stable market price with a lot of the volatility removed. The investment bankers take the risk of the IPO and essentially take the volatility out so that it's "safe" for you and I to invest in. In some cases, the investment bankers lose money because of this risk. If it's a good well known company, they usually make money. In fact, they make a killing.
But remember, the whole point is to bring the stock out to the market in a way that the price has mostly stabilized.
Eventually, the stock will be available through normal purchasing means (again, after the price has stabilized). Most of the time the IPO "windfall" has already been bought and sold away. Other times, like for Google, the stock keeps going up after the IPO. Thus, the fair market price for the stock was NOT found during the IPO stage. If you look at it like this, Google's IPO was a failure because their stock was obviously not priced at the market price coming out of the IPO (as it still quadrupled in the following year).
Anyway, unless you have lots and lots of money or have some sort of other insider line, you are not able to "share" in the "risk" of the IPO like those with lots of cash.
Beware of geeks bearing formulas.
That's not quite right. The IPO, or Initial Public Offering, is when the stock is first offered to be publicly traded on an exchange (such as Nasdaq or NYSE). Before that point, shares can be bought and sold privately between entities, they're simply not listed publicly. Generally what happens is that one or more underwriters (typically investment banks) will buy the shares from the selling party, and then offer them for sale on the market for the IPO. The advantages of this setup are that the company gets a guaranteed amount of cash from the IPO, and the actual public trading is handled by a third party, rather than insiders. But other owners can also sell at that time. And you can buy shares as soon as the ask and bid prices converge to the point that ask is sufficiently below bid. But often times due to the confusion of the IPO, this isn't going to be a very good price, at least short term.
THE NERD IS THE COMPUTER.
I always said that this is the monster google should HAVE bought up when they could of...
This coupled with their server technology and gmail accounts, could easily have set up virtual desktop environments for all their clients to be able to install lets say office or any other
software, and then log unto another machine, and loggin into thier accounts, then be able to
run it without reinstall....how many would have given up their hotmail then???
Anyways, too late now, but would have been nice!
What's wrong with the above equation? Well, Microsoft is missing from it, yet it is a viable equation. What we are seeing with VmWare is a classic Innovator Dilemma of Christensen lore. I would have added Ubuntu (on VmWare???) but it's still too early to tell as there is nothing really compelling enough in Ubuntu at this stage to bring about a new standard: just because a production ingredient - software services - is done cheaply does not necessarily make a good business or product. In any case, while Microsoft was gunning for Google a far more dangerous and sinister competitor was taking a foothold at the very root of its source of domination. As Ballmer said in a February NyTimes article on VmWare, "Everybody in the operating system business wants to be the guy on the bottom" . I would replace "operating system" with simply "computing". Moore's law, basic economics, and, most of all, what users want are driving the changes. Intel will be at the very bottom, then VmWare being the key value addition on the server, and then stuff goes out the Internet organized by Google, and you, the end user, rely on a string of Apple devices to connect with that information.
I'm not saying Microsoft won't matter, but the companies that make it big in tech sit at the sweet critical value spots in the whole package and right now those spot are moving away from Microsoft. I have no idea why Gates is leaving now when his company is no doubt facing the worst threats of its entire life. At least IBM had its ivory towers of untouchable mainframes built over years of honest work to see it through and that business is still healthy. It also has services which are actually more fundamental to its roots from the days Thomas Watson Sr transformed the company using the skills he learned as a salesman under John Patterson of the National Cash Register. Anyways, the problem with the way big tech growth areas emerge is that once you notice them, it's almost too late to stop the trend. Companies like Xensource will remain dwarfs unless VmWare seriously F***s up. Microsoft got away with heavy handed aggressive tactics against Netscape, but now we all know about those tactics and they won't work quite as well against VmWare and Google. Of the two VmWare is a far worse nightmare because Google could very well be a passing cloud due to the torrential growth of the web: the web will continuously demand new ways of organizing information and it will not be one size fits all so the search engine market will evolve like the dog eat dog market for hard drives (incidentally, that's why I applaud Yahoo's appointment of Jerry Yang as CEO because in my view search is still very much a computing guts business and we need "warrior CEOs" like Gates was to lead such companies). Dominating the guts of computing is the best sweet spot. Apple is also in a very sweet spot because its instinct for design and "grokking" what the user wants is an extremely tangible asset that is not easily replicated. At first I ridiculed the iPhone but now I can't wait to get my hands on one. If I were Microsoft I would harakiri myself and break up into pieces that can more effectively compete against these threats. The value of the individual pieces separated may be greater than their current value. Standard Oil did this back in the early 1900s and that's what actually made Rockefeller a billionaire.
Why would Intel invest in a company whose product reduces the number of computers and chips its customers use ? Look at IBM. Their chips and servers are now so powerfull, they're selling far fewer systems altogether and have had to turn themselves into a services company. The only reason I can see that makes sense is to somehow sabatage VMWare. Unfortunately the cat is out of the bag with products like XEN so Intel can never kill virtualization.
You live and learn, or you don't learn much.