VMware virtualization software eyes Chinese reality
BEIJING (Reuters) - VMware Inc, a global leader in virtualization software, said on Thursday it hopes to expand rapidly in China, a market where it has only recently established a toehold.
VMware has built 35-person research and development team in Beijing over the past six months and hopes to expand that to 350 by 2009.
"We look to China for a host of reasons," Diane Greene, chief executive of the software maker, told reporters. "China is a vast country with a lot of IT infrastructure."
VMware is 86 percent owned by data storage equipment and software maker EMC Corp and controls over two thirds of the market for virtualization software, which allows a single computer to operate several operating systems simultaneously.
The estimated percentage of servers that will be shipped this year together with virtualization software is less than 5 percent, offering VMware and its rising number of rivals such as Microsoft Corp a huge potential market for growth.
VMware's third-quarter profit tripled as strong sales of its business software helped it top market expectations and has seen revenue double year-on-year for several quarters.
The company, which went public in August, has a market value of about $40 billion, making it the world's fourth-largest publicly held software maker after Microsoft, Oracle Corp and SAP AG.
VMware reckons its product can be used by almost any organization, industry or government that wants to utilize its IT infrastructure more efficiently.
Microsoft has entered the virtualization market, but analysts estimate that VMware still commands a two to five year lead with its third generation technology.
"This a big market, there is obviously room for competitors," said Greene.
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