I have been using the VMWare products for more than 5 years. I would like to say that it is THE BEST. However, with the current valuation of $30B is kind of pricey. The whole virtualization market is less than $7B in 2010. If VMWare gets 70% of it, say $5B, with a Market-Cap to Revenue ratio of 6, it is $30B which is the current price. With the upcoming competition from SUN/Oracle, IBM, Citrix, Microsoft and more. It will see some pricing-pressure. Especially for the Oracle case, I won't believe that it can come up with a great Virtualization tool but it makes so much noise because it owns many enterprise software. A few years later, Oracle can be nastly enough to say that "The Service support will not be valid f you run our software on VMWare instead of ORACLE Virtual Ware tool". Similarly on Microsoft platform/shop, there will be too much guess work to make VMWare running better than others. Regarding the customer lock up, it is true that there is some learning curve on using VMWare Server or other products. However, as we know that many decision is not purely based on technology, there is something known as politics and connection. That said, VMWare should be valued more than $10B.
$83.05 (12/29/07)
