VMware Inc.(VMW), a leading provider of virtualization and infrastructure software solutions, recently acquired social collaboration provider Socialcast. However, the terms of the deal were not disclosed.
Based in San Francisco, Socialcast is a leading provider of social collaboration solutions for enterprises and enables communication within the business network by combining the people, information and enterprise applications. Companies such as Avaya, Humana Inc. (HUM), Nokia Corp (NOK), Philips Electronics and SAS use Socialcast. VMware is also a user of the Socialcast services.
Through this Socialcast acquisition, VMware will be able to efficiently communicate within its work space and knowledge sharing would be faster and in a secured environment. Not only can VMware use the offerings for its own infrastructural efficiency, but it can also leverage the expertise to its 250,000 global customers and nearly 25,000 business partners who are spread globally to avail the benefits of social computing.
Socialcast is the third acquisition after SlideRocket and Zimbra for VMware, as the company continues to strengthen its end user computing model. VMware has been working on the virtualization of servers and transformation of the PC. This would help the organizational workforce to access and derive data that could eliminate location problems, thereby increasing productivity through new-age collaboration and communication models.
We believe the increasing adoption of virtualization and cloud computing technologies will drive growth for VMware over the long term.
Enterprises that are shifting to the cloud need proper infrastructure, which VMware provides through its four key products: vSphere that helps in coordinating and automating computer storage and networking; vShields for virtualized Edge functions and security; vCloud Director to enable cloud functionality; and the recently launched vCenter Operations Suite for management.
We believe VMware is the biggest beneficiary in the adoption of cloud computing and the corresponding shift in IT environment. The server virtualization market possesses huge potential and VMware continues to expand its presence in the datacenter cloud management and security segments.
We have an Outperform recommendation on VMware over the long term (for the next 6 to 12 months). Currently, VMware has a Zacks #2 Rank, which implies a Buy rating on a short-term basis.
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