Gartner: VMware may be the next Novell, Reuters: VMW shares will lose value – UPDATED

Posted by Staff   |   Tuesday, July 7th, 2009   |  

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This is not exactly the best possible week for VMware which is receiving “negative attention” from technical and financial analysts.

David Cappuccio, Managing Vice President at Gartner, wrote on his corporate blog how the current VMware market position reminds the Novell leadership of the early ‘90., and if VMware, like Novell, is doomed to be smashed by the Microsoft techno-commodities. 
It’s not a new speculation: plenty of others pictured this scenario years ago, as soon as Microsoft announced its plan to deliver a free hypervisor as part of the operating system.
Nonetheless, the fact that a Gartner VP is wondering about the topic out aloud is remarkable.

Elsewhere, Reuters is reporting how only 2 of 31 Wall Street analysts who follow VMware stock advise investors to buy it at current prices, as the shares are expected to drop much as soon as Microsoft will start distributing the RTM of Hyper-V R2 next week.
Analysts project revenue growth of 2 percent to $1.9 billion this year, with per-share profit excluding items falling to 91 cents from $1.05, according to Reuters Estimates.

Update: The Gartner and Wall Street financial analysts may be completely wrong about the destiny of VMware (as some readers already commented below) but the company looks really desperate right now: VMware has just released a press announcement to win those Virtual Iron customers that Oracle left in the cold less than a month ago.

If the “global leader in virtualization solutions from the desktop through the datacenter and to the cloud” has to do this to win, let’s say, 300 SMB customers, then the financial analysts forecasts may be even too optimistic.


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