The commentary, entitled Virtualization: are you being served?, was written by Tara Hedlund, portfolio manager/security analyst; Michael Lozano, security analyst; Chris McHugh, senior portfolio manager/security analyst; and Bob Turner, chairman and chief investment officer. The piece notes that the technology may boost server utilization rates as high as 60-80% and that a recent survey found that 75% of chief information officers consider virtualization their top capital-spending priority.
The California-based software company VMware holds a near-monopoly of an 85% share of the virtualization market for the popular x86 servers. As the analysts note, "We would be hard-pressed to identify another tech company that so dominates its market as VMware does virtualization." It's estimated that in 2007 VMware could nearly double its revenue, to about $1.3 billion, and may increase its operating profits by more than 140% to about $300 million.
Forbes carrying the news, Turner Investment Partners