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Intel Invests $218M in VMWare, Preparing for IPO 88

Posted by Zonk
from the hey-there-little-buddy dept.
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.'"
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Intel Invests $218M in VMWare, Preparing for IPO

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  • by grc (52842)
    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...
    • Re: (Score:3, Funny)

      by teh_chrizzle (963897)

      *looks over shoulder at opteron box running VMWare server*

      my friend and i were wondering the same thing.

      • by cbreaker (561297)
        We just purchased two quad-socket dual-core opteron machines with 32GB ram to run VMware on.

        When you're running a lot of VM's on your hosts, you can go with Intel because they have more marketing power, or you can go with AMD because they perform much better in cpu/memory intensive SMP applications.
    • Re: (Score:3, Funny)

      by alen (225700)
      AMD and Intel have a cross licensing agreement. AMD can put the same thing on their chips as Intel does to support VMWare
      • by goombah99 (560566)
        Not sure if you are joking, but we all know how the intel compilers slow down code for AMDs.
    • Re: (Score:2, Interesting)

      by jfekendall (1121479)
      As a guy who has toured their facilities, they seem to push IBM products: specifically Blades. There is no doubt in my mind that there is some bias at the hardware level. But I don't see AMD support going away quite yet. It's really anyone's guess.
      • by fm6 (162816)
        Whose facility? VMware's? Nonsense. They're hardware vendor-agnostic. They have to be. They were probably just qualifying IBM blades the day you were there.

        I work for a company that sells AMD-based servers, both blade and rack-mount. And ESX is darned important product for us.
        • Dude, it was just what they were pushing for an out-of-the-box solution at the time. No reason to jump down my throat over it. It was the facility in Brecksville, Ohio.
          • by fm6 (162816)
            Dude, don't get all defensive because somebody points out a flaw in your logic. We all say stupid shit. The difference between that and being stupid is refusing to admit our mistakes.
    • Trusted Computing (Score:5, Interesting)

      by goombah99 (560566) on Thursday July 12, 2007 @03:01PM (#19841253)
      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?

      • Now is all the implementations I've seen described there is a progressive trust is creates as each layer ...

        I think your browser's Bayesian Spam Filter [wikipedia.org] is working in negation, keeping you from making any sense to English speakers. Just how [is] many [is] verbs does [is] a geek's sentence [is] need?

        And before the obligatory reponse: 42!

      • by Talchas (954795)

        it does enable some valuable applications so it's going to happen.
        Umm, what valuable applications? The only things I've heard for it are for DRM and similar things. I guess it could be useful to protect against rootkits or similar things... But the reason "it's going to happen" would be far more in the first column than the second.
        • by goombah99 (560566)
          Transactions.
          real and secure electronic banking. Electronic voting. All sorts of commerce.
      • by kestasjk (933987)
        They haven't bought VMWare; a 13% stake is significant but Intel aren't running VMWare now by any means.
    • Considering AMD has an antitrust lawsuit in progress against Intel in the US, Intel would be wise to avoid writing any "suggestions" in the memo line of that check they just cut for a piece of VMWare.

      If VMWare starts optimizing for Intel-specific differences, or even does so much as slapping a "for best results, use Intel(tm) processors!" sticker on the box it's going to look very bad from where the judge is sitting.

    • VMware will always be committed to providing support for hardware that their customers wish to use. Plenty of VMware's enterprise customers are on AMD64. Also there have been papers published by people, some of them vmware employees, showing the advantaged to AMD's virtualization for memory mapping over Intel's more limited virtualization support.

      To be honest most at VMware are not hugely excited with the virtualization extensions. Most of the features are slower than the old techniques using binary extract
  • 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...
    • by djaxl (543958)
      In the tradition of Slashdot, I didn't RTFA, however I'm guessing Intel purchased shares of the preferred, non-publicly-traded variety.
    • Re: (Score:3, Informative)

      by ergo98 (9391)

      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...


      EMC is retaining 90% ownership of VMWare, and is IPOing shares representing 10% of the company. That 10% is expected to bring in $949 million, giving the whole company a market capitalization of around $10 billion.

      2.5% of $10 billion is around $250 million of course.
  • VMware's virtualization platform runs on Intel architecture and most deployments of the tools are on systems using Intel chips.
    What? It doesn't run on anything else anymore? I wasn't aware that the x86 instruction set was used solely by Intel now.
    • Re: (Score:3, Interesting)

      by Neil Watson (60859)
      Most of our ESX hosts (about a dozen in total) are AMD chips.
    • Re:From TFA (Score:4, Informative)

      by RulerOf (975607) on Thursday July 12, 2007 @04:45PM (#19842547)
      It's not that VMWare doesn't work on AMD chips, I run VMWare on several AMD's and it works just peachy. What they're getting at is support for a hardware Hypervisor. The hypervisor is that spiffy little bit of logic that keeps track of x86 instructions inside of a CPU and determines which machine, real or virtual, that said intruction belongs to. Traditionally, this has been done in software, but porting that intruction set over to hardware, as Intel has done, and I believe AMD won't be doing until their quad core line comes to market, significantly improves the speed of virtualization to the point where there is no difference between a real OS and a virtualized one (except for multi-OS overhead, of course). That was one of the whole points of that "Blue Pill" idea some months ago.
      • I believe AMD won't be doing until their quad core line comes to market


        You believe wrong. Pretty much all of AMD's current lineup, from my $59 Athlon 64 X2 3600+ to the high-end Opterons, supports AMD-V, which is roughly analagous to Intel's VT. I have even heard from some sources that AMD-V is superior to VT.
  • Intel AMD (Score:3, Insightful)

    by jshriverWVU (810740) on Thursday July 12, 2007 @02:53PM (#19841167)
    I read this a day or so ago and it's interesting. Ignoring the whole money transaction the partnering is interesting. Intel is interested because they'll have an inside connection to designing their processors to be better adapted toward virtualization. On the flip side VMware will get to better turn their software to the architecture. It's a win-win situation.

    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.

    • by fm6 (162816)

      My only hope is that Intel doesn't skew it's architecture so much that it becomes incompatible and that AMD is left behind.
      Perhaps that's precisely what Intel has in mind. For many years now, Intel's ability to set prices has been limited mainly by the fear of losing market share to AMD. Surely Intel would love to have a technology that AMD can't copy.
      • Didn't Intel do a "skew" some time ago called Itanium? That didn't go so well.

        I have a hunch that the market likes compatible choices, any wide variation from "the path" will whither and die.

        IOW, AMD copies the good stuff, Intel copies the good stuff, and the goofy stuff doesn't make it or is niche. (my 0.0147 euros)
        • by fm6 (162816)
          Itanium's big issue was backward compatibility with Intel's own legacy x86 chips. That's a lot different from not being compatible with a competitor's chips — especially one that has maybe 10% of the market.
    • Re:Intel AMD (Score:5, Informative)

      by Richard W.M. Jones (591125) <rich@NoSpAm.annexia.org> on Thursday July 12, 2007 @03:16PM (#19841425) Homepage

      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.

      Too late - it's already happened. Intel and AMD have incompatible virtualisation technologies. Intel's is called VT [intel.com] with various sub-designations such as VT-d for virtualising DMA. AMD's is called AMD-V [amd.com] and is completely different. AMD have sub-divisions too, such as support for Nested Page Tables which Intel are still developing.

      Xen supports both. Not certain about VMWare, but I'd be surprised if they didn't support both too. One interesting fact is that hardware virtualisation isn't faster than software approaches like VMWare's emulation or Xen paravirtualisation. Although this will probably change in future (and also Xen paravirt is no good for you if you want to run Windoze or other binary-only OSes).

      Rich.

  • Not 13% (Score:5, Informative)

    by crow (16139) on Thursday July 12, 2007 @02:56PM (#19841189) Homepage Journal
    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.]
    • Re: (Score:3, Funny)

      by superid (46543)
      re: your disclaimer.... I have a friend of a friend (no really!) that works in the toronto office. I mentioned something about the EMC/VM merger and he said "yeah, they come over and steal our bagels"

    • by fm6 (162816)
      The news reports I've seen say that Intel's stake in VMware is in addition to the 10% stake that had already been announced. So EMC is indeed selling off 13% of VMware, or close to it.
      • by crow (16139)
        I've heard conflicting information on whether the 3% is part of the already announced 10% or not. As an EMC shareholder, I would prefer to keep more of it for EMC.

        Of course, my impression is that what Intel really gets out of this is a seat on the board. Of course, getting to invest in a highly-anticipated IPO at the low end of the expected IPO price is a sweet deal. I don't see what's in it for EMC (though it does add to the hype for the IPO, which isn't bad).
        • by fm6 (162816)
          It's sort of like a monarch sending off one of his daughters to marry another monarch who's a potential adversary or ally. It cements relationships between the two companies. After all, both EMC and VMware need Intel's good will.
  • by Anonymous Coward
    But it would be a 19,000 day supply of hookers and cocaine for bender.
  • by Anonymous Coward
    I've dealt directly with the folks at VMware, and I have to say that I'm just not impressed. I love the product, when it works. But lately I've had difficulty with being able to run VMware on some of the more modern OS's. The workstation in particular, with Fedora and Centos, I had to jump through hoops (and even then had trouble). The server was far better for Centos. But still, the Linux compatibility is something that I'd expect better from the folks at VMware; especially since they seem to have rather h
    • An interesting review. We've used their products in-house for sometime now, and while I dont use itpersonally (I use MS VPC) most of the people who work with it on a daily basis dont like it for various reasons.
    • I'm not impressed either. I came to them with cash in hand and a simple pre-sales question. If a salesman had called back he could have made a sale. But as a result of such very poor service before the sale I figured after sale service would be even worse and decided not to invest in anything but their free products and even then to continue tracking other alternatives.

      Their main products simply don't work on modern versions of Linux. One has to either modify their product with a 3rd party patch or down
    • by HalimCMe (528821)
      VMware does most of their contracting through their VMware Authorized Consultant Partner (VAC [vmware.com]) program. These are companies that employ certified consultants and do both their own work and work subcontracted by VMware. You may have better luck finding a local VAC and working with them to schedule a consultant's time. VAC Locator [vmware.com]
    • I found VMware Server installs and works on a RHEL5 host, but RHEL5 won't install on it!
  • 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.
  • by ericdujardin (623023) on Thursday July 12, 2007 @03:37PM (#19841689)
    See http://www.linuxdevices.com/news/NS4223741314.html [linuxdevices.com] 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 ?
  • by One Childish N00b (780549) on Thursday July 12, 2007 @06:01PM (#19843415) Homepage
    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.
  • 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 Micr

  • 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.
    • by charlesnw (843045)
      Um. Its a bit more complicated then that. People buying servers to run VmWare are buying big beefy boxes. The per unit profit is much higher then standard commodity boxes.

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