Is VMware Getting a Boost From the Slumping Economy?

Is VMware Getting a Boost From the Slumping Economy?

After months of bucking the dismal economy, the tech industry has recently seen a spate of layoffs, downsizing, and corporate belt-tightening. According to a news release that arrived in my inbox recently from Challenger, Gray, and Christmas -- a company that bills itself as the "nation's first, oldest and premier outplacement consulting organization" -- 186,955 tech industry jobs were lost in 2008, with most of those lost in the last half of 2008. That's some awfully glum news from a company that stamps the word "Christmas" on its letterhead.

Despite the gloomy outlook, some IT companies are bucking the trend. Chief among them is VMware, which reported strong profits and earnings for all of 2008, as well as for the last quarter of the fiscal year. VMware reported revenues for the fourth quarter of 2008 at $515 million, which was an increase of 25% from the same quarter in 2007. Revenues for the entire year of 2008 also increased substantially, weighing in at a hefty $1.9 billion, an increase of more than 40% over 2007 results.

It's no secret that VMware's virtualization products can help organizations drive down operating costs, and VMware President and CEO Paul Maritz drove that point home when commenting on VMware's 2008 results. "VMware delivered a solid fourth quarter to cap off a successful 2008. We have been executing well in a difficult economy," said Maritz. "Customers continue to make VMware a strategic priority because our solutions – used by more than 130,000 customers – help reduce capital and operational costs."

VMware's financial success stands in contrast to news of layoffs and restructing at Microsoft, which likely views 2008 as a year it would prefer to forget, with slowing Windows Vista adoption, a surge in netbook sales (which often run Linux or the low-margin Windows XP), and the lack of a compelling alternative to the popular iPhone.

John A. Challenger, chief executive officer of Challenger, Gray & Christmas, reinforced that message when discussing the latest round of layoffs and job cuts. “After the bust, technology companies in all disciplines were a lot more cautious and avoided the pitfalls of over-hiring that contributed to record downsizing in 2001 and 2002," Christmas said. "Another reason that a repeat of 2001-style downsizing remains unlikely is that while demand for technology is falling, it still exists. Many companies are seeking new green technologies and computer and electronics firms are ramping up those areas of business."

So have you used virtualization to help drive down IT power and operating costs in your organization? If so, I'd like to hear about it -- drop me an email at [email protected].

A Note About the Virtualization UPDATE Newsletter

After more than two dozen issues of Virtualization UPDATE, we've decided to move the newsletter entirely to the web. This will be the last issue of the Virtualization UPDATE email newsletter, but you'll still be able to read our ongoing virtualization coverage in our Virtualization UPDATE blog on the web. You can also find more coverage in the virtualization topic area on the Windows IT Pro website, and in our related Twitter feeds at and

Related Reading:

Virtualization Tips and Tricks
By John Savill

Q. Does Hyper-V in Windows Server 2008 R2 take advantage of the Nested Page Tables and Extended Page Tables features in the latest AMD and Intel processors?

A. Yes. Recent AMD and Intel processors add support for Nested Page Tables and Extended Page Tables respectively. These features essentially make it so that the Virtual Machine Manager (VMM) in the hypervisor layer no longer has to maintain mapping tables of guest memory to physical memory (Shadow Page Tables). This mapping is one of the biggest overheads of the hypervisor. Each virtual machine (VM) has its own map of memory that is unlikely to map to the physical pages of memory on the server, so every time a VM references a page, the VMM has to do translate the virtual memory address to the physical memory address. This translation is expensive in CPU power for the VMM.

Click the following link to read the rest of the answer.

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