Microsoft (MSFT) is behind in the virtualization software business. Way behind. Wall St.’s perception, which is probably correct, is that recent IPO VMWare (VMW) has the industry lead. The company now has a market cap of $31 billion. Last quarter, VMW made $66 million on $358 million in revenue. That may not be a great deal, but many analysts see the virtualization market more than doubling each year for the next decade.
Microsoft has announced that it will launch several initiatives to catch VMW, one of which is to buy start-up Calista Technologies. Another is a partnership with Citrix Systems (CTXS) which already has a virtualization business.
While VMWare trades at 27 times revenue, Citrix is at 4.7x and has a market cap of $6.4 billion. Citrix is not a pure play in virtualization, so it carries less of a premium. The company is in the application delivery infrastructure business and has some consumer brands including "GoToMyPC".
Microsoft may make the decision to take on the Citrix non-virtualization businesses and buy the company outright. It could also take the non-essential operations and sell them.
Redmond will have to do something beyond going it alone. VMWare has too big a lead.
Douglas A. McIntyre
o
Take Charge of Your Retirement: Find the Right Financial Advisor For You in Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding professional guidance—and we’ve made it easier than ever for you to connect with the right financial advisor for your unique needs.
Here’s how it works:
1️ Answer a Few Simple Questions
Tell us a bit about your goals and preferences—it only takes a few minutes!
2️ Get Your Top Advisor Matches
This tool matches you with qualified advisors who specialize in helping people like you achieve financial success.
3️ Choose Your Best Fit
Review their profiles, schedule an introductory meeting, and select the advisor who feels right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.