VMware’s aggressive M&A of disruptive technologies

Contact: Brenon Daly

One of the highest compliments that can be paid to any technology company is to call it ‘disruptive.’ And by both organic and inorganic means, VMware has certainly earned that accolade. That’s on top of the more than $40bn of market value that it has also earned.

Starting with its homegrown server virtualization (a radically disruptive technology to the server industry), VMware has steadily expanded into other markets through M&A. Along the way, we’ve seen that at the root of disruption is conflict, with VMware’s acquisitions putting it on a collision course with vendors of various sizes in various markets.

For instance, VMware has taken some shots at Microsoft through purchases such as Zimbra and SlideRocket, which take aim at Microsoft cash cows Exchange and PowerPoint, respectively. More recently, VMware dropped $1.26bn on Nicira, a deal that could threaten Cisco Systems and other networking providers because Nicira’s technology effectively virtualizes networks.

And earlier this week, VMware bolstered its log management/analytics business by picking up Log Insight. The acquisition is a bit of an elbow jab at Splunk, which has collected a sky-high market capitalization of nearly $3bn as the market leader in log management/analytics. Of course, it’s important to keep these tussles in perspective – Splunk is still a Gold Sponsor at VMworld later this month.

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