VMware has agreed to acquire software products and expertise from EMC’s Ionix IT management business. “Customers are increasingly leveraging virtualization as the foundation for modern IT architectures and their path to Cloud Computing,” said Paul Maritz, VMware’s president and CEO, in a statement. The US$200 million all-cash deal is expected to close in the second calendar quarter of 2010.
VMware will acquire EMC’s FastScale, Application Discovery Manager, Server Configuration Manager and Service Manager. EMC will retain the Ionix brand.
The acquired EMC products and expertise will expand the VMware vCenter product family with capabilities to meet stringent compliance standards in a dynamic virtualized environment.
Meanwhile, EMC will pay $87.5 million to settle a probe into its pricing practices on sales to United States government agencies, without admitting any wrongdoing.
“EMC and the Department of Justice have agreed in principle to a settlement,” said EMC spokesman Dave Farmer.
The company also said it would restate earnings for its fourth quarter ended Dec. 31, 2009, to reflect a 1-cent charge related to the settlement, as well as a previously announced reorganization of its international operations.
It reduced its fourth-quarter net income per share from 20 cents to 19 cents.
The investigation by the U.S. Justice Department, disclosed a year ago, concerned allegations about EMC’s fee arrangements with system integrators and other companies that partnered with EMC in selling products.
EARNINGS
Hewlett-Packard’s profits swelled 25% in the latest quarter because of cost-cutting and a stronger showing from its personal-computer division. Revenue was up in most of HP’s major divisions, and HP raised its 2010 outlook, citing “accelerating market momentum.” For the quarter ended Jan. 31, HP reported net income of US$2.3 billion, or 96 cents per share, up from $1.9 billion or 75 cents per share from the same quarter a year ago. Revenue for the quarter was $31.2 billion, which exceeded Wall Street forecasts of $30 billion. Services revenue fell 1%, but that business unit was more profitable, likely due to cost cuts instituted by CEO Mark Hurd. For 2010, HP is now forecasting $121.5 billion to $122.5 billion in revenue, which exceeds analyst expectations.
Palm said that lower-than-expected sales of its latest wireless smartphones will cause third-quarter revenues be significantly below projections. The news sent the company’s stock price lower; it already had fallen more than 40% from mid-January to the end of February. Palm now expects revenue to come in between US$300 million and $320 million on a non-GAAP basis for the third quarter of fiscal 2010 ending this month. Analysts had been anticipating quarterly revenue of $424.7 million. Palm launched its newest webOS smartphones—the Pre and the Pixi—with Verizon Wireless, but Verizon has been faulted for a lack of promotion of the new phones. Also dragging down sales is stiff competition from rival devices as the Apple iPhone, Motorola Droid and the RIM BlackBerry.
