Virtually Speaking: Intel Puts Money on VMware

By Amy Newman (Send Email)
Posted Jul 10, 2007


Amy Newman
VMware received an Intel infusion on Monday when the chip giant's global investment arm, Intel Capital, agreed to invest in VMware. The virtualization market's bellwether company got boosts this week from Intel Capital's $218.5 million investment and the release of VMware Lab Manager 2.5.

The synergy may seem unclear at first, but makes sense when you consider that the VMware hypervisor visualizes x86 architecture and Intel microprocessors constitute the majority of the systems on which VMware's virtualization products are deployed.

According to a press release put out by VMware, Intel's investment is intended to foster intercompany collaboration and accelerate VMware virtualization product adoption on Intel architecture while reinforcing the value of virtualization technology for customers.

EMC, VMware's parent company, announced in February that it was taking 10 percent of VMware public. At the completion of VMware's planned IPO, Intel Capital's planned $218.5 million in VMware's Class A common stock will account for approximately 2.5 percent of VMware's total outstanding common stock. This will translate into less than 1 percent of the combined voting power of VMware's outstanding common stock.

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An Intel executive is expected to be appointed to VMware's board of directors.

VMware isn't the only virtualization vendor in which Intel has invested. The chip vendor invested in SWsoft in 2005.

In addition to a future cash infusion, VMware's virtual ecosystem got a boost this week with the release of VMware Lab Manager 2.5. Lab Manager is VMware's virtual lab automation system. It enables VMware Infrastructure 3 users to test drive the setup, capture, storage and sharing of multi-machine software configurations.

The technology behind it came to VMware via the acquisition of Akimbi Systems, James Phillips, senior director of virtual software lifecycle automation solutions, told ServerWatch. In December 2006, VMware rebranded the software, added some features and released it as version 2.4

This week version 2.5 hit the streets with it three major enhancements. Previously, Fibre Channel was the only storage option. With version 2.5, iSCSI and NFS are now available as virtual machine library storage options. Also new are support for 64-bit and Virtual SMP guest operating systems and new tools support for virtual machines running Solaris 10 x86 and experimental support for virtual machines running Windows Vista. Phillips said he believes that these additions are critical if VMware is to attract cutting-edge users to Lab Manager.

The third key addition to Lab Manager is enhanced automation capabilities to enable enterprises to set policies that automatically undeploy and clean up unused virtual machines, and thus free up computing resources and simplifying server maintenance.

Lab Manager can be purchased a la carte, starting at $15,000, or bundled with VMware Infrastructure 3, which starts at $35,000.

Phillips emphasized, however, that "Sales of Lab Manager are for Lab Manager. It is not riding the coattails of VMware Infrastructure or other offerings." Phillips said that Lab Manager customers "represent 35 industries."

VMware also unveiled the free-of-charge VMware Lab Manager ROI calculator, which admins can use to determine both the cost savings and break-even point for Lab Manager, Phillips said.

Rounding out VMware's news this week are partnerships with Borland and Genilogix. The companies are integrating VMware Lab Manager into their respective software test suites to automate the provisioning process. Users will be able to check out fully provisioned test environments stored in VMware Lab Manager from their test management interfaces.

The Borland deal runs the deepest, Phillips said, as it will integrate UI-level access and control of VMware Lab Manager environments with the release of SilkCentral Test Manager 2007. Genilogix, meanwhile, is releasing a beta version of a new plug-in that integrates HP Quality Center with Lab Manager.

In addition to working with Borland and Genologix, Phillip said VMware continues to work with Rational Software, which has provided a plug-in for Lab Manager since its Akimbi days.

VMware wasn't the only virtualization vendor to bolster its partner web this week. Virtual Iron expanded its distribution tentacles and announced on Tuesday an agreement it inked with Tech Data's Advanced Infrastructure Solutions (AIS) division.

This, according to Chief Marketing Officer Mike Grandinetti, will provide a "higher yield of premier channel partners."

Established in February 2007, AIS is a network of 200 resellers and companies that can provide dedicated management, sales and marketing resources and consultative services.

With Virtual Iron, Tech Data AIS will take a consultative solutions selling approach and target qualified value-added resellers.

Grandinetti believes that ultimately, the 80/20 rule will apply — 20 percent of the companies under AIS will provide 80 percent of the revenue.

Virtual Iron, Grandinetti told ServerWatch, is now a 100 channel-focused company. The deal is "an efficient and effective way to ramp up our channel," Grandinetti said. While this alone is not terribly unique, its expanded reach and value-added services may provide the lure it needs to widen its customer base.

Amy Newman is the managing editor of ServerWatch. She has covered virtualization since 2001.

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