February 5, 2003 5:47 PM PST

Start-up VMware becomes profitable

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VMware, a start-up whose software lets several operating systems coexist on the same computer, became profitable in 2002 and plans to announce a new partnership with server maker NEC next week.

The Palo Alto, Calif.-based company is trying to make a name for itself selling software that brings features to Intel servers that have been available in the past chiefly on expensive systems such as Unix servers and mainframes. The software lets programs run in "virtual machines," several of which can operate on the same actual machine.

"Our revenues grew over 100 percent in 2002, and...VMware is now profitable," Chief Executive Diane Greene said in an e-mail.

Financial services firm Merrill Lynch is a recent customer of the company's products; others that joined in 2002 include Citibank, Saks Fifth Avenue, FedEx, Ford Motor, Pfizer, Lego, Siebel Systems, Toyota and Welch Foods, Greene said.

An increasing focus at the company is on virtual machine software for servers, higher-end machines that often run multiple tasks simultaneously. On Monday, the company plans to announce that NEC has signed an agreement that lets it sell and support VMware's higher-end ESX Server product on its Intel servers.

The move comes after announcements this week that VMware has improved its lower-end GSX Server product, which, unlike ESX Server, installs on top of a Windows or Linux "host" operating system, and that Unisys will support VMware running Windows virtual machines on its 32-processor ES7000 servers.

Running multiple operating systems at once is useful for a variety of functions. Servers can be subdivided to run several tasks, which can be less expensive than buying several independent computers. A problem in one virtual machine won't bring down the entire computer.

For desktop computers, virtual machines let software developers test their programs on a variety of operating system versions or test Web sites with a variety of computers. In addition, VMware can save a computer's state on a hard drive and reconstitute it for later use, which is useful for classroom lessons or software demonstrations.

The new GSX Server version 2.5 supports the latest operating systems, including the new SuSE Linux Enterprise Server, Red Hat Advanced Server, Windows 2000 with Service Pack 3 and all editions of the coming Windows Server 2003.

GSX 2.5 also runs on 32-processor servers, can use as much as 64GB of memory and house as many as 64 active virtual machines, VMware said.

GSX Server costs $3,025 for a two-processor server and $6,050 for a four-processor system.

 

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