UPDATED 09:41 EDT / JULY 11 2011

VMware Stays Strong Despite Rivals Closing Market Gap

VMware, a top provider of virtualization software, continues to remain in control of the server virtualization market, and is seemingly not at all worried with Gartner’s latest report. The recent assessment by Gartner puts Microsoft and Citrix in the “leader” section of the Magic Quadrant for x86 Server Virtualization Infrastructure.

Citrix and Microsoft have joined VMware in the Leaders Quadrant by increasing vision and execution respectively. Although market share leader VMware continues to set the standard in products and the pace in terms of strategy, Microsoft has increased its market share (especially among midmarket customers new to virtualization), and Citrix is leveraging its desktop virtualization strengths and its free XenServer offering to expand its server virtualization share.

The road map from virtualization to cloud computing is rapidly evolving, and executing will be very important during the next year as this market continues to rapidly evolve and grow.

VMware has a lot of reasons to be confident in its abilities, despite competitors slowly catching up. The company is still ahead of the pack when it comes to server virtualization. As of last Tuesday’s close of trading, stocks for VMware rose to as much as 13.9% year to date, and we’ll gain some additional insight after they announce their second quarter financial results next week.

VMWare (NYSE:VMW) hit a new 52-week high Wednesday as it is currently trading at $103.10, above its previous 52-week high of $102.74 with 1.2 million shares traded as of 12:02 p.m. ET. Average volume has been 2.4 million shares over the past 30 days.

With strong ranking and financials, VMware isn’t slowing down.  We expect big news tomorrow, as VMware is set to announce a couple of major hypervisor launches.  The company is also successful in the area of cloud infrastructure service provider market. Its vCloud initiative is gaining support from an increasing number of service providers who are using vSphere.

Even if Microsoft and Citrix are gaining a slight momentum in the virtualization market, Gartner still puts VMware at the top of the list, stating the company “seems to be winning at least 60% of new midmarket customers — in large part due to a well-structured channel, but also due to strong mind share developed over the past 10 years.”


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