Industry News Desk
VMware Makes Key Acquisition
VMware’s parent company, storage giant EMC, is also going to license Virsto’s widgetry
By: Maureen O'Gara
Feb. 15, 2013 08:15 AM
VMware said last month that it was still into acquisitions although business had turned rocky and it was going to trim 7% of its workforce in a rightsizing exercise, an announcement that carved 20% off its share price.
So, on Monday in that spirit of M&A it said it's buying Virsto Software, a Valley neighbor that writes storage performance software and since late 2007, when it was founded, has raised $24 million in venture money from such firms as August Capital, Canaan Partners and Interwest Partners to do it.
VMware didn't say what it's paying, but evidently it's a strategic as well as tactical move to help it compete with Microsoft with its Windows Server 2012, Hyper-V virtualization and Virsto-like Storage Spaces.
VMware's parent company, storage giant EMC, is also going to license Virsto's widgetry in the name of the almighty software-defined data center.
The deal should close this quarter and the Register suggests Virsto may get knocked down for $100 million.
Virsto CEO Mark Davis suggestively contends in a blog piece that "Building a storage hypervisor is no small task. This is serious computer science, kids. The amount of intellectual capital that has gone into building Virsto's technology is staggering. And if the R&D problems weren't enough, the business model challenges of trying to transform the storage industry are equally daunting." That's why he's glad to sell out to VMware
To hear Davis tell it, the companies fit together like a hand in a glove.
"It was the highly aligned way at looking at the opportunity that got VMware and Virsto excited about working together," he said. "As we spent time together in recent months, we discovered a remarkable degree of synergy - from high-level vision down to minute details of implementation architecture. We spent a lot of time finishing each other's sentences in those deep-dive diligence meetings."
After the deal is done VMware means to keep selling Virsto's products as they are now as well as integrate its technology in future VMware products.
Virsto can manage storage - even a mixed pile of different kinds of storage that may or may not be local - like it was one big disk - virtually speaking, of course. It brags that it "decouples storage from the physical world once and for all to save organizations time and money." Naturally everything has the cloud ultimately in mind.
It's got a VM-centric storage hypervisor, delivering purpose-built software defined storage that's supposed to change the economics of storage in virtualized environments. And it's got multi-hypervisor storage virtualization software for snapshots, clones and thin provisioning for server virtualization, desktop virtualization, cloud computing and other enterprise initiatives.
VMware says that when Virsto is implemented in a VDI, it can reduce the cost of storage per desktop by as much as 70%.
Virsto's stuff works with Hyper-V and Citrix as well as VMware so VMware may have cross-platform widgetry in mind.
The acquisition will give VMware the wherewithal to create a server-networking (Nicira)-storage stack.
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