VMware (NYSE:VMW), the virtualization giant has announced that it will buy DynamicOps, a cloud automation and management solutions provider for an undisclosed sum. DynamicOps enables transition to the cloud while being platform agnostic and this acquisition will make VMware a service governor that can manage multiple platforms such as the Microsoft Hyper-V, Citrix, Oracle Xen-based hypervisors and Amazon Web Services. The acquisition is scheduled to complete in the third quarter of 2012 subject to customary closing conditions. ((VMware To Acquire DynamicOps Inc, www.vmware.com, July 2, 2012))
See our full analysis on VMware
Software Defined Datacenters Key To Virtualization
DynamicOps, Inc. was a spin-off of Credit Suisse’s IT unit and has raised $16.3 million in venture capital since its spin-off in 2008. VMwares customers are most likely to benefit by the standardized architecture used by DynamicOps, but it will also continue to build customized solutions so that customers can choose the model that works best, including heterogeneous environments and management.
Customers already using the VMware vSphere will continue to rely on VMware vCloud Director to enable aggregation and management of virtual and cloud resources. The big upside for VMware is that it can now provide these services for customers whose requirements extend beyond VMware-only environments. DynamicOps enhances the capabilities of vCloud Director by customizing it and enabling customers to consume multi-cloud resources such as the Hyper-V and Amazon WebServices.
Virtualization Software is the biggest division of VMware and constitutes ~90% of its Trefis price estimate. If DynamicOps’ acquisition increases VMware market share from its current projected ~40% to ~45% by the end of our forecast period, we can expect an upside of ~10% to the Trefis price estimate.
We have a $109 Trefis price estimate for VMware, which is ~25% above the current market price.