VMware Inc.’s share price down, to launch new products in response to competition

VMware Inc. announced plans to expand and improve its “virtualization” software, and to delve into hardware, in a move widely seen as an acknowledgment of threatening freeware competition in its lucrative business.

“As a technology, it starts off like what we did for server virtualization,” said Edward Hsu, director of the product marketing division of VMware. “New ways of managing environments have become possible, and we’re looking to extend that to networking and storage.”

The tool is designed to help companies run their hardware computing capacity more effectively. Naysayers, however, point that there is plenty of open source, free of charge software, which already does that, and express doubts of VMwares new products financial model and monetization potential.

VMware Inc. is also planning a foray into hardware with a specialized computer, which comes in package with some of the companys software, enabling even simpler IT solutions for businesses. The machine in question is said to be of appliance-level end-user complexity of use, and will be developed in partnership with EMC Corp., VMwares parent company, Fujitsu Ltd and Dell Inc.

“VMware and EMC share a common vision for software-defined storage,” said Raghu Raghuram, executive vice president of the Cloud Infrastructure and Management at VMware. “VMware is working with EMC to provide customers with choice and complete end-to-end solutions.”

VMware Inc. was 1.32% down at $102.24 per share at 14:12 GMT today, marking a one-year change of +14.91% and valuing the company at $43.97bn. According to CNN Money, the 36 analysts offering 12-month price forecasts for VMware Inc. have a median target of $115.00, with a high estimate of $130.00 and a low estimate of $69.00. The median estimate represents a +12.48% increase from the last price of $102.24.