

Ask YC: Is VMWare a good buy? - jmatt

VMW (http://finance.google.com/finance?q=NYSE:VMW) has dropped approximately 25% since the CEO left or was ousted. On top of that it is down from it's high of 125.25. Is it a good buy at approximately $39 a share? I've used VMWare Fusion and have been really pleased. I think they currently hold an advantage because they support so many different operating systems. In the coming years Virtualization is going to happen, will VMW end up being a good investment? Will Xen and Parellels end up taking market share from Microsoft and VMWare? I think it's an interesting topic which may end up being hard to predict. What does Hacker News think?
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byrneseyeview
They're trading at over sixty times their highest-ever earnings. I guess you
have to wonder why, if virtualization is able to earn them such great returns,
they don't have more competition.

My guess is that their product will get cheaper and more commoditized, and
those 15% profit margins won't last. But I don't know much about the industry
-- that's just what happens in tech, in general.

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brk
I don't think it's a good buy personally.

Good product, but there are too many free options out there, and a lot of
general turmoil in the virtualization space right now.

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ingenium
On the linux side of things, Virtualbox is a much better product than VMWare
except for some issues with giving control of USB devices to the VM. It loads
faster, and has a coherence mode similar to VMWare Fusion on Mac.

The free solutions are getting much better and can compete with VMWare.
Furthermore, I would say the money is not in desktop virtualization, but
rather in server virtualization. For this, does VMWare even have a product?

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moocha
> The free solutions are getting much better and can compete with VMWare.
> Furthermore, I would say the money is not in desktop virtualization, but
> rather in server virtualization. For this, does VMWare even have a product?

Huh? They are _extremely_ strong in data center virtualization - in fact
that's where their main revenue comes from:
<http://www.vmware.com/products/server_virtualization.html>

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noodle
no. not yet, at least. their P/E was astronomical before, and its still kinda
high. will need to drop more before i consider a purchase, myself. if it dips
below $20, i'd consider it.

