VMware out with results and free deal

It is busy days at VMware as the company said goodbye to its president and chief executive, faced rumblings from investors worried about the company's strategy and then decided to come up with a radical strategy to fix the latter point and fight off Microsoft and others at the same time.Dianne Green, the former chief executive and president, left earlier this month, and Paul Maritz, a former long-standing Microsoft executive stepped into her shoes immediately.

It is busy days at VMware as the company said goodbye to its president and chief executive, faced rumblings from investors worried about the company's strategy and then decided to come up with a radical strategy to fix the latter point and fight off Microsoft and others at the same time.

Dianne Green, the former chief executive and president, left earlier this month, and Paul Maritz, a former long-standing Microsoft executive stepped into her shoes immediately.

The new strategy is to give the entry-level version of the VMware product, ESXi, away for free in the hope of attracting more customers to try out the system and then buy the full paid-for version.

"Now customers can enjoy the benefits of virtualisation without having to upgrade just to try it out," said Martin Niemer, product marketing manager at VMware. "This is an easy way to upgrade."

The free version will be available in about two weeks, according to VMware's Maritz who said that the company wanted to make virtualisation as free as possible.

It was perhaps in anticipation to this that analysts, and others, had begun to voice concerns over the company's strategy. Well, it was perhaps because of that and the fact that in losing Greene the company had lost one its most high profile executives.

According to Niemer, VMware has little to worry about the competition from companies like Microsoft. At least not yet. "Microsoft? We haven't seen them getting much traction in the market," he told ZDNet.co.uk.

Whatever the worries thought Microsoft or anyone else, at least VMware's latest results show a company able and willing to fend off all competitors for now.

The second quarter results were released on Tuesday and showed that the company had revenues for the second quarter were $456m (£228m), an increase of 54 percent from the second quarter of 2007. GAAP operating income for the second quarter was $61m, compared to $47m, non-GAAP operating income was $112m, an increase of 52 percent from the second quarter of 2007.

Maritz's take on it was that VMware "had another solid quarter". In his summing up of the benefit for the benefit of analysts he said that the company's mission is "to help customers run datacenters that use powerful, cost-effective, modern hardware to deliver dramatically higher levels of flexibility, manageability and efficiency".

So, VMware has done the housekeeping and got everything in order so let the next phase of the battle for control of the virtualisation market begin. Hmm, that piece did not mention Sun Microsystems or IBM. Is it time for their next moves?

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