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Ever since then, when someone makes an acquisition, they point to EMC's acquisition of VMware as one model for the way to do it.
Greene: VMware, I think, had an unusually powerful product which immediately saved people money and gave them great flexibility. And it had a very strong partnering model going into the acquisition. And now we've really expanded our channels. When we got bought, there were hundreds [of channel partners]. Now there are 6,000-plus [worldwide].
I would agree, if you buy a company and they've got that kind of partnering model, that might be in conflict with [the model of] the acquiring company, you leave it as a stand-alone subsidiary.
I think we see that with Dell today, looking at how it's going to integrate EqualLogic.
Greene: Well [EqualLogic has] a great channel. That's interesting. You know, EqualLogic has some people with a lot of experience with VMware.
When EMC acquired VMware, was there an increase in the amount of resources you had?
Greene: The thing we did have, internationally, all of a sudden we didn't have to establish a legal entity in all these countries because EMC was there. So we could just hire people into this office. It's expensive and time-consuming to establish these legal entities. So we were able to scale internationally much more rapidly than without that acquisition. So I think that was a huge help.
How about post-IPO? How did things change?
Greene: We're just growing our business, keeping our customers and partners, doing everything we can for them to make sure they're happy. There's a little additional work now with being public.
I think it was an incredible marketing event for the whole virtualization industry. It was great for everybody. We're all working pretty hard to keep up with that.
Look at the valuation of XenSource [after its acquisition for $500 million by Citrix] . . .
Greene: Yeah, it's a really exciting time for this industry, because people appreciate how valuable these products are in someone's data center. And the ecosystem's building out much faster now, which just further enhances the value of deploying virtualization. More people want experience in how to deploy it and deploying the services. So it's on this upward spiral right now, which has been real exciting for all of us.
Some of the key initiatives VMware is working on now include working with the power utilities to offer rebates [for decreasing server power consumption]. What are some other initiatives that VMware is working on . . .
Greene: . . . that are publicly announced. There's a huge initiative in the channel. We do have some M&A going on as well.
What are the types of companies VMware looks at in terms of being suitable for acquisitions?
Greene: Well, we look at technologies where there's an area we want to build, and there's some key technologies that might already be out there in a startup. So we acquire for that.
We've also acquired a company in Bulgaria that we've been outsourcing a lot of work to that has just incredibly talented engineers. So we just acquired the whole company for its engineering talent.
Or then there's the example of Dunes (Technologies), where it's process automation for virtualization. That was a solution that our customers wanted integrated in with our virtualization suite. So we bought the solution, because it had been built specifically for our virtualization suite.
The acquisitions have been going well, in terms of people come in and seem to really enjoy joining the company.
So building out the product suites is the major initiative. There are a lot of major releases over the next year that haven't been announced necessarily.
What are the most important things going forward in terms of VMware's direction?
Greene: Well, the hypervisor. We can add so much functionality, like new hardware functionality, security and resource management.
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