VMware Shakes Off Worries

SAN FRANCISCO - Despite a turbulent month on Wall Street for VMware(VMW Quote - Cramer on VMW - Stock Picks), analysts recently dispelled doubts about the company's grip on the virtualization market.

They say VMware, which has a commanding 90% share of the virtualization market, will maintain its edge for specialized software that allows servers to run multiple operating systems because its management software tools are superior to those of their competitors, including Microsoft.

Market share will be determined by the sophistication of virtualization management tools. VMware has a clear start in these tools, said Michael Cherry, an analyst with Directions on Microsoft. He spoke last week at a Citigroup-sponsored analysts session on Microsoft.

Cherry said Microsoft(MSFT Quote - Cramer on MSFT - Stock Picks), which recognizes the benefits of virtualization as a means for building big data centers, is going to be behind VMware in the development of these tools for some time to come.

VMware ended a volatile week Friday at $90.85, up 17% for the week, and regained some of the 42% it had lost during a month of whiplash valuations for the debutante stock. Overall, VMware as of Monday has fallen 24% since Nov. 1, compared with a drop of 5.2% for the Nasdaq during the same period.

News last month that business software developer Oracle(ORCL Quote - Cramer on ORCL - Stock Picks) was entering the virtualization space started VMware's decline from a high of $125.25 recorded on Oct. 31, while the general outlook for the tech sector grew dim on economic fears, dragging the stock down further. The Nasdaq Technology Index has lost 8.3% since Nov. 1.

« Previous Page

1 2 3

Next Page »