By IB Times Staff Reporter
August 31, 2010 6:52 AM EDT
Jefferies & Co. expects business software maker VMware Inc. to introduce new technologies that better enable the formation of private and public clouds. The brokerage maintained its ‘hold’ rating on VMware with a price target of $65.
“We expect an update on View 4.5, the virtual desktop infrastructure (VDI) software. We don't expect an update on guidance for 2010, although it would be nice for them to speak to longer-term growth. On August 31, VMware will hold their first ever investor day in conjunction with the annual VMworld Conference,” said Katherine Egbert, an analyst at Jefferies.
The analyst said VMware is expected to announce its new vCloud Director software, previously codenamed Project Redwood on August 31. vCloud Director provides interfaces, automation, and management tools to tie separate VMware environments inside the firewall into a single private cloud.
These private clouds can then be linked with outside service providers running vCloud Express. The software will allow tracking of utilization rates, chargeback, and management of internal and external workloads through a single management interface, Jefferies said in report to clients.
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One drawback is that vCloud Director doesn't currently work with workloads created on vSphere 4, VMware's enterprise-level platform. Security and SLAs could also be a concern. Jefferies believes the software also enables multi-tenancy, which is crucial for service providers.
The analyst expects VMware to update its desktop virtualization product, by finally unveiling View 4.5. The product was slated to be out in mid-July but was delayed. The analyst doesn’t expect View 4.5 to include a client side hypervisor but looks like it will support separation of the Windows profile from the underlying OS, moving it closer to desktop virtualization, rather than simple VDI.
“We expect support for offline VDI, thin application provisioning, and tiered storage, et.al. While VMware still lags behind Citrix in VDI, we believe the release of View 4.5 allows VMware to be in the running for broader desktop virtual initiatives. We expect that management might provide more clarity with respect to longer-term revenue growth and margins. They clearly are benefitting near term from an ELA renewal cycle,” said Egbert.
VMware shares closed Monday down 1.15 percent at $78.36 on the NYSE.
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