EMC has announced that they have filed for an IPO this summer. They are offering 10% of VMware up for an initial public offering to bring a more capital into the corporation and help them better run the firm. VMware is currently the leader in x86 virtualization technology, and has a amazing market share in this upstart industry.

More than 10% of new x86 server workloads are running on VMware virtualization software, and VMware is used by more than 20,000 customers, Greene said.

With VMware being a child of EMC, it has been hard for investors to really throw their money at the parent company, which hasn’t really shown anywhere near the growth that VMware has shown.

VMware is an early leader in one of the IT industry’s hottest market segments. The company’s revenue rose 83% in 2006, reaching $709 million, EMC said.

Now, my thoughts. Do I want VMware in my portfolio? First, I do own stock in Microsoft, but I have for over 8 years now. Second, it isn’t a complete ipo, it is just 10% stake of the company, so EMC still has a tight grip. My answer, yes for the short term, If it can be purchased at or near IPO pricing then hold onto it for a year, you should see a sizable return on your investment. But I think EMC may release additional shares as VMware grows, devaluing the current market shares when they do that. I don’t think VMware will be able to hold onto the lead for the long run, with open source Xen, Microsoft Virtual Server, SWSoft, and other right on it’s tail it will have to maintain a very competitive pricing and may get over taken at any point.

Source: EMC Press Releases