EMC completes VMware acquisition

By Stephen Shankland
Posted on ZDNet News: Jan 9, 2004 9:44:00 PM

Storage technology specialist EMC has completed its acquisition of server software maker VMware, announcing Friday the final purchase price of $625 million in cash.

EMC has specialized in storage hardware and, increasingly, storage management software. EMC's VMware acquisition, though, could propel the company into a broader effort to create management software that makes it easier and cheaper to run large collections of computing hardware.

EMC announced the VMware acquisition in December, but expected the price at the time to be $635 million. The acquisition is expected to increase EMC's 2004 revenue by $175 million to $200 million, the company said.

VMware sells "virtualization" software that lets a single Intel-based server run several independent operating systems or that lets administrators move a computing task from one computer system to another. Moving tasks from

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system to system is an important part of utility computing visions, which demand that information technology infrastructures be as flexible as possible. That flexibility lets a pool of computing gear adapt to changing workload requirements, faulty hardware or different service-quality standards. Utility computing efforts are under way at IBM, Sun Microsystems, Hewlett-Packard and other companies.

EMC is based in Hopkinton, Mass., but VMware will continue as an independent subsidiary in Palo Alto, Calif., led by former Chief Executive Diane Greene.