[ogf-msc] fyi (11,000 attendees at Vmworld)

[Linesch, Mark]

VMworld becomes mainstream
San Jose Mercury News, 9/12/07, Scott Duke Harris
(EMC/VMware; HP mention)

"You're virtually there," punned a sign by the escalator. A company
offered bumper stickers: "I brake for virtualization."

Such are the gimmicks at VMworld, a three-day conference that opened
Tuesday at San Francisco's Moscone Convention Center. Think of it as the
Burning Man of "virtualization," an esoteric software field that has
rapidly bloomed into a full-fledged industry, involving both powerhouse
companies like Microsoft, Hewlett-Packard and Intel as well as a fresh
crop of start-ups.

Founded four years by VMware, the Palo Alto-based pioneer of
virtualization, VMworld's progress illustrates the virtualization
phenomenon.

The first VMworld, held in San Diego in 2004, attracted 1,400
participants from major companies, start-ups, government agencies and
universities. By 2006, attendance had swelled to 6,700. This year the
event drew nearly 11,000 participants, with booths from more than 200
companies. Press registration showed just over 100 journalists from 17
countries, said VMware spokesman Greg Eden.

It's a lovefest for virtualization, the term for a breed of software
that enables a single computer server to run multiple operating systems,
enhancing efficiency and reliability while curtailing costs and energy
use.

Chris Sims, a network engineer for Clayton County Water Authority south
of Atlanta, said he was a 19-year-old college student when in 1998 he
stumbled upon a free download of VMware's initial software offering.
Soon, he was running Linux and Windows simultaneously on a little, weak
laptop - a dazzling feat at the time.

In 2004, Sims said, he became reacquainted with VMware to upgrade the
water authority's information technology system. He attended the 2006
VMworld for the government rate of $995 and figures the knowledge he
gained saved the water company between $10,000 to $12,000 easily. Sims
anticipates greater savings still, with plans to consolidate from four
racks of servers to two because of virtualization.

"We love VMware. We love VMworld," said John Bara, vice president of
marketing at XenSource, a Palo Alto-based company that is prospering
from the virtualization wave. "VMware is benevolent enough to let us
attend."

XenSource claims more than 1,000 customers, but is dwarfed by VMware.
Last month, one day after VMware debuted on Wall Street with a public
offering that saw its stock soar 76 percent on the first day of trading,
the Florida-based firm Citrix announced that it would buy XenSource for
$500 million. The deal has not closed yet.

Bara, a 20-year Silicon Valley veteran who joined XenSource in early
2006, seemed quite pleased with that price for a company with only 80
employees. Does he have stock options? "Oh, a few," he said with a
smile.

The $500 million price for XenSource illustrates the escalating value of
virtualization. XenSource was founded in 2004, the same year VMware was
bought by storage giant EMC for roughly $650 million. Today, VMware's
market capitalization exceeds $25 billion, making the EMC subsidiary
America's third most valuable software company after Microsoft and
Oracle.

Bara, who had previously worked at Intel and Interwoven, said
virtualization once seemed like a niche technology - "a great tool for
sales engineers to build repeatable demos. . . . Now it's breaking out
into the mainstream."

VMware announced Tuesday that it would acquire Dunes Technologies of
Lausanne, Switzerland, for an undisclosed amount. It also announced that
Dell would be the first company to offer servers embedded with VMware's
next generation of virtualization software. Agreements have been made
with several other computer companies to offer the virtualized servers.

Start-ups, meanwhile, are looking for their piece of the action. 3Leaf
Systems, based in Santa Clara, came out of stealth mode in May. It used
VMworld to announce new software that it says dovetails with
virtualization to simplify data center management.

Xsigo Systems, a Sunnyvale-based start-up and potential competitor of
3Leaf, used VMworld to showcase its technology, a combination of
hardware and software that it says will simplify management of
input/output.

Xsigo's marketing gimmick was free T-shirts, including one that said
"Pimp Your I/O."

"This is how we get people to take our T-shirts," said Jon Toor, Xsigo's
vice president of marketing. "It's not our tagline.


Mark Linesch : Open Grid Forum (OGF) : Hewlett Packard
281-514-0322 (Tel) : 281-414-7082 (Cell) : mark.linesch at hp.com :
linesch at ogf.org      
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