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VMware Stock Takes Off on IBM Pivotal Cloud News

Stocks in this article: IBM VMW AMZN RAX RHT EMC GE

EMC (EMC), the data-storage company that owns 80% of VMware, also holds a majority stake in the Pivotal Initiative, although VMware provided most of the programming staff. It took 69% at launch, and VMware took 31%.

General Electric (GE) bought a 10% interest in Pivotal in April for help adapting the software to industrial machinery.

In overnight trading, VMware rose 13.64% after announcing a two cent per share beat on earnings, EMC rose 5% after meeting estimates of 42 cents per share, and IBM was up 1%.

For the cloud, however, this is big news. Cloud players have been struggling to provide an alternative to Amazon's infrastructure. IBM's endorsement of a complete platform could make big customers give OpenStack a second look. The hope is that IBM and Pivotal can build Cloud Foundry tools, allowing a relatively painless move of enterprise applications to cloud infrastructure.

Chris Ferris, chief technology officer for cloud interoperability at IBM, said OpenStack and Cloud Foundry are complementary.

"We're putting our support behind Cloud Foundry and working to have it complement OpenStack," he said.

In its press release, IBM noted that the Cloud Foundry software is available as the Github open-source repository as well as at the Pivotal site.

Ferris added that the Cloud Foundry announcement is a natural follow-up to plans IBM announced in March to support open standards for its cloud software and services.

IBM and Pivotal will co-host a two-day event on Cloud Foundry next month and Pivotal will release a branded and supported version of the software during the fourth quarter.

At the time of publication, the author was long IBM and GE.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.
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