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Is Virtualization Technology the fiber glass of the 90s?

The Register is carrying a story about what Register thinks is happening. I too, lately since I'm re-reading the Tom Friedman's book , am beginning to wonder about the "Up is down" as Captain Jack Sparrow says in "Pirates of the Carribean 3" when he has to get out from the dead to the living. Are we investing in something else and not virtualization? Ane even more important question, which can mean life and death to many investors and firms: "Are we over-investing in a trend we cannot really comprehend?" Quoting El Reg:

Wall Street appears to be judging this question in both rational and irrational ways.

VMware is on pace to churn out more than $1bn in annual sales at a quicker clip than giants such as Microsoft and Oracle. The analysts see this and pump VMware's share price up to reflect where they think sales will be in a couple of years. That's the quasi-rational part.

At the same time, the investment houses are dealing with a market that's largely lackluster except for a handful of wonder stocks - Apple and Salesforce come to mind. Our friends on Wall Street say they're being pressured to buy more and more of VMware because they don't want to fall behind rivals. The only way to make big gains in this market is to ride these select out-performers. This is a practical approach for gun-to-your-head professional investors but an irrational, unsustainable trend for the market as a whole.

Great argument (that highlighted one), isn't it?

Warning #1 : Not understanding the real value of virtualization.

We all have noticed that the market is is hyperdrive, not just overdrive. It is exploding, it is a bit too hot. Investor's are back into the 90s mode, and if this is true, then I would seriously worry investing in VMware or any other trend. Why? Simply because ou have to first understand the markets and where they are "truly" heading. My message to investors is pretty simple: Please talk to people, talk to lots of people. find out the REAL value in virtualization. You can call me if you want, I'll give you my advice for free ;)

Warning #2 : Flirting with too many lions is dangerous!

Complex Relationship: You sell my hypervisor so I can help your competitor screw you, WTF?

Such a line seemed fair enough in a pre-IPO world. But now EMC is becoming a much stronger, richer company on the back of VMware's success. Every server IBM ships with VMware's software puts money in EMC's pocket - money it can then use to invade IBM's traditional businesses.
VMware may have to get out of this situation real fast. The unrest or the disruption in the technology is, apparently, enough for the industry to handle, getting in this tied up scenario between firms may not be the best places for VMware to be.

Serious questions:

  1. Is Virtualization and investment in it a reminder of the "Fiber Glass" of the 90s?
  2. Is this a mere beginning of the real innovation and real value?
  3. Is this the kondratievization of IT?
Well, the answer , from the innovation part of the fiber glass which led to smarter and smarter switches at the fiber glass which in turn gave us the internet and the collaboration as we see it, can be heard from this statement:

"The fact that some people think this is hype shows that it hasn't sunk in yet," Greene said. "This is like the next-generation plumbing."
Invest wisely and stay upwind!

Here is the link to El Reg's chat with the VMware CEO.

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