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August 10, 2009

VMware to acquire SpringSource for $362m

Moves beyond hardware virtualisation

By CBR Staff Writer

VMware, a business software maker, said that it has agreed to buy SpringSource, a privately held business and web application developer, for around $362m in cash and stock. It also includes an assumption of about $58m of unvested stock and options.

The company claims to deliver new technologies that enable companies to more efficiently build, run and manage applications within both internal and external cloud architectures.

Together, VMware and SpringSource plan to develop integrated Platform as a Service (PaaS) technologies that can be hosted at customer datacentres or at cloud service providers. The new platform is expected to allow customers build new enterprise and web applications, and run and manage these applications in the same vSphere-based internal or external clouds that can also host and manage their existing applications.

Tony Baer, principal of onStrategies, said: “The cloud brought both companies together that each faced complementary limitations on their growth. VMware needed to grow out beyond its hardware virtualisation niche if it was to regain its groove, while SpringSource needed to grow up and find deeper pockets to become anything more than a popular niche player.”

Paul Maritz, president and chief executive officer of VMware, said: “The combination of SpringSource and VMware capitalises on this shift and places us right at the intersection of the most important forces in the software market today – virtualisation, modern application frameworks and cloud computing.”

VMware plans to continue its support to the principles that have made SpringSource products popular: the interoperability of SpringSource software with a variety of middleware software, and the open source model that is important to the developer community.

Rod Johnson, chief executive officer of SpringSource, said: “The broader transformation in IT goes beyond Java frameworks, tooling and runtime infrastructure. Virtualisation is reshaping the data centre, and cloud computing is set to drive far-reaching changes. Significantly, cloud computing blurs the division between development and operations, bringing new power (and responsibility) to developers.”

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Baer added: “VMware isn’t finished however. The most glaring omission is need for Java object distributed caching to provide yet another alternative to scalability. If you only rely on spinning out more VMs, you get a highly rigid one-dimensional cloud that will not provide the economies of scale and flexibility that clouds are supposed to provide. So we wouldn’t be surprised if GigaSpaces or Terracotta might be next in VMware’s acquisition plans.”

The acquisition has been approved by SpringSource’s stockholders and is expected to close in the third quarter of 2009, subject to customary closing conditions.

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