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Another Day, Another Funding Deal: VirtenSys Raises 8.1 Million Euro

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UK-based virtualization company VirtenSys has secured a Series B funding round to the tune of € 8.1 million (USD 12 million). The syndicate consists of existing shareholders Scottish Equity Partners, Celtic House Venture Partners and the Belgian GIMV. VirtenSys will use the new funds to expand operations in the UK and US, and to launch its products and begin revenue generation.

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“That the original investors subscribed fully to the Series B round is significant,” said Andy Roberts, chairman of the board of directors of VirtenSys. “It validates our strategy and demonstrates their confidence in the market opportunity and the demand for our products.”

VirtenSys is developing I/O virtualization solutions for data centers. VirtenSys’ technology enables data centers to better adapt to dynamic workloads, self-configure, and self-heal at a lower total cost of ownership and higher utilization than currently available systems.

VirtenSys predicts a growing demand for its solutions as workloads on data centers keep increasing and the dynamics of the IT workload are changing. According to the company these dynamics call for greater corporate agility in response to changing business conditions and require an IT infrastructure that can adapt equally fast. Organizations are trying to find new ways to increase data center utilization while reducing the total cost of ownership. This again requires greater dynamism in the management of the IT workload.

VirtenSys’ strategy is to protect IT investments with a standards-compliant migration path for servers to virtualized I/O resources. The I/O virtualization solutions are based on the industry-standard PCI Express I/O interface which is natively available on all servers.

Stuart Paterson, a partner at lead investor SEP said, “SEP is confident that VirtenSys has an excellent future. Virtualization is very much at the top of CIO agendas. VirtenSys virtualization solutions increase utilization, while lowering power and cooling requirements by as much as 50 percent. This is very attractive to many organizations seeking to optimize their data centers.”

Just recently, VirtenSys appointed a new CEO (Ahmet Houssein ), a new chairman (Andrew Roberts ), expanded its sales and engineering executive teams and opened its US headquarters in Oregon. The company was founded in December 2005 and raised its first round of funding in October 2006. Scottish Equity Partners, Celtic House Venture Partners and GIMV then invested a total of €9.5 million.

[Via Tornado-Insider ]

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VMWare Misses Analysts’ Estimates: While Revenues Go Up, Stock Goes Down

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Yesterday, VMware reported quarterly revenue that fell short of Wall Street expectations and forecast a slowdown in sales growth, sending its shares down more than 26 %.

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The highlights from the official announcement :

Total revenues for the fourth quarter were $412 million, an increase of 80% compared to the year-ago quarter.

GAAP operating income for the fourth quarter was $76 million compared to $37 million in the fourth quarter of 2006.  Non-GAAP operating income was $108 million, representing 26% of fourth-quarter revenues and an increase of 72% over the year-ago quarter.

GAAP net income for the quarter was $78 million, or $0.19 per diluted share, compared to $31 million, or $0.09 per diluted share, in the year-ago quarter.    Non-GAAP net income for the quarter was $103 million, or $0.26 per diluted share.  GAAP and non-GAAP net income for the fourth quarter of 2007 include a $0.01 per diluted share benefit from a change in tax rate.

Total revenues for the full fiscal year 2007 were $1.33 billion, an increase of 88% compared to 2006.

GAAP operating income for the full fiscal year 2007 was $235 million compared to $121 million in 2006.  Non-GAAP operating income for the year was $338 million, representing 26% of full-year revenues and an increase of 77% over 2006.

GAAP net income for the year was $218 million or $0.61 per diluted share, compared to $86 million, or $0.26 per diluted share, in 2006.  Non-GAAP net income was $295 million or $0.82 per diluted share.

VMware shares had quadrupled in value after an August initial public offering, but have dropped since November.

The company on Monday forecast revenue growth of 50 percent in 2008, versus 88 percent in 2007. That would suggest revenue of $2 billion, shy of Wall Street targets.

“If you miss your numbers in just your second quarter after going public that suggests the stock was overhyped,” said Trip Chowdhry, an analyst at Global Equities Research.

According to the Server Virtualization Blog ,  the company’s CEO Diane Greene maintained that the company will not lower product pricing in 2008. “We do think we can maintain our pricing,” Greene said on an earnings call with investors. “We anticipate continuing our pricing over the course of the year.”

VMWare surge puts virtualization in the spotlight

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VMWare’s stock soared on its first day of trading yesterday, giving the company a market value upward of $10 billion, showing that virtual machines are starting to add up to real dollars.

Virtual machines, the technology that VMWare helped pioneer, allow one computer to act as many, whether it’s a Mac running Windows and the Mac operating system at the same time or a massive server running multiple instances of Windows and Linux simultaneously. Once a niche technology, virtualization is expanding rapidly as businesses try to get more bang for their server buck.

Investors are betting that virtualization technology is going to have a big impact and that VMWare will profit from its early lead in the field.

More information by Ina Fried at: Cnet