VMware expands staff, steady on outlook

SAN FRANCISCO (Reuters) - VMware Inc (VMW.N) is looking to increase its workforce by as much as a quarter this year to try and ride a burst in spending on its virtualization products, its chief operating officer said on Wednesday.

The company -- whose technology lets companies boost the efficiency of computer servers, saving money on hardware and maintenance -- said economic problems in Europe had not yet put a dent in its business or forced any change in its second-quarter financial outlook.

VMware has forecast that revenue will rise 30 percent to 35 percent this year as businesses invest in upgrading aging computer systems and expanding data centers. Last year, the company's sales rose 8 percent, its slowest rate of growth since its founding 12 years ago.

"It's better than it was last year," Tod Nielsen, VMware's COO, told the Reuters Global Technology Summit in San Francisco when asked about customer commitments. "Folks are realizing they've got some spending to do."

Nielsen said he had no big merger plans to discuss for his company, which is majority-owned by EMC Corp (EMC.N). But he said the time was ripe for deals.

"It's a good time to be a buyer in this market," said Nielsen. "We are looking at whatever technology or solutions help accelerate our vision."

The Palo Alto, California-based company, which is the top maker of virtualization software, has about $2.5 billion in cash that it could draw on to do deals.

(Additional reporting by Bill Rigby; Editing by Gary Hill, Bernard Orr)