Cork-based tech firm VMware spends €1bn on Nicira purchase

EMC, one of the leading tech companies in Cork, announced quarterly results yesterday in line with expectations, while VMware — 80%-owned by EMC — spent over €1bn acquiring Nicira.

California-based VMware employs 550 people in Cork, and purchased Nicira to add technology that helps networks run more efficiently to its business portfolio.

VMware, whose main office is based in California, is the global leader in virtualisation software that enables computers to handle multiple operating systems at once.

The products could help VMware lessen the need for types of networking equipment sold by Cisco Systems, said Brian Marshall, an analyst at ISI Group.

“This is kind of a match made in heaven,” said Mr Marshall, who is based in San Francisco.

“You’re taking a leader in virtualised networks and the gorilla of the dominant vendor in server virtualisation.”

EMC, which owns a majority stake in VMware and employs more than 1,900 people in Cork, said yesterday that sales and profit for the year will meet prior forecasts.

EMC is the world’s biggest maker of storage computers and it expects to achieve revenues of €18bn for the whole of 2012.

Net income for the second quarter rose 19% to €538m, or 29 cents a share. Earnings, excluding some items, increased to 39c a share, matching the preliminary results announced last week.

Sales climbed to $5.31bn while sales of storage machines “held up well during the quarter” and the company’s results were boosted by demand for software from VMware, said Abhey Lamba, an analyst at Mizuho Securities.

Massachusetts-based EMC last week promoted David Goulden to serve as president and chief operating officer, and shifted Pat Gelsinger to the role of VMware chief executive.

VMware’s former chief executive, Paul Maritz, is moving to EMC to oversee strategy.

EMC gained 0.9% in New York, while VMware slipped 1.9% yesterday. Overall, VMware has climbed 7.3% this year and EMC has increased 15%.

Bloomberg

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