EMC and VMware Share Wild Ride

VMware just checked in with what sounded like an incredibly impressive performance for the fourth quarter of 2007, and the year in total. The virtualization leader's fourth quarter revenues were up a whopping 80 percent to $412 million. Revenues for the year just closed were $1.33 billion.

"We begin 2008 with more than 100,000 customers, 500 technology and consulting partners, nearly 10,000 go-to-market partners and more than 5,000 employees," said Diane Greene, president and chief executive officer of VMware, in a prepared statement.

Those numbers, however grand, fell short of analysts' expectations, though -- never a good thing on Wall Street. The fourth quarter revenue of $412 million missed analysts' expected mark of $417.4 million. This brought VMware's shares down earlier this week, which in turn brought majority shareholder EMC's shares down, despite huge gains by both.

EMC's fourth quarter profit jumped 35 percent, a spike that exceeded analyst expectations. The company's fourth quarter revenue was $525 million, up from $388 million last year. Nevertheless, as EMC owns a majority 86 percent stake of VMware, it shares its fortune.

It never ceases to amaze me how such a strong performance, even if it's not as strong as expected, can have such a lackluster effect. How do they come up with those expectations? Still, I think there are good things in store for both VMware and EMC.

Is your organization using VMware's or EMC's wares? What's your virtualization strategy overall? Exceed analysts' expectations and check in with me at llow@redmondmag.com.

Cisco's New Switch Boosts Data Speed
Early next week, Cisco Systems is expected to roll out a new network switch called the Nexus 7000. This new unit will boost data transfer speed to up to 15 trillion bits per second. This will be a huge help for data-intensive operations, like hosted services, previously ungainly downloads and remote data storage.

Cisco says its Nexus line will eventually replace an existing line of network switches that currently accounts for a third of its business. Pricing for the Nexus 7000 is expected to start at $75,000.

Where does your data get bogged down? What sort of intensive data transfer operations are you doing these days? Get your thoughts over to me -- at whatever speed -- at llow@redmondmag.com.

Akonix Releases Threat Report
The threats are never-ending. Akonix Systems' IM Security Center tracked 14 new attacks coming through instant messaging (IM) systems in January alone. The new IM worms include MSNChristmas, MSNVB, Perin and Raiodin.

"Although the number of IM attacks in January 2008 is somewhat low, it doesn't mean that hackers have gone into hiding," said Don Montgomery, Akonix vice president of marketing, in a prepared statement.

The IM Security Center is a joint effort with Akonix and leading IM vendors. It was established to focus on emerging security threats posed by IM and P2P applications. To read more about the January 2008 IM Threat Report, and previous threat reports, go here.

What IM system do you use? I had my laptop hijacked about a year ago by something that got in through IM. Have you had any similar experiences? Send me a secure, worm-free message at llow@redmondmag.com.

Mailbag: Thoughts on 'Creative Capitalism,' Security and More
Peter wrote yesterday about Bill Gates' push for "creative capitalism" and wondered if this isn't a somewhat ironic proposal, coming from the chairman of Microsoft. Here are your thoughts:

I think you hit it on the head. "Forget how I did it, do as I do it now -- and good luck." It is as if he has seen the light, as most multi-billionaires probably do as they survey the world and say, "What else is there?" Oh, yeah, teach the world how to be good to one another, give away their money to the poor, etc.

I used to be somehwhat of a fan, but I now see he is a Democrat from his "last day at MS" video, and I am completely dissapointed: same ol', same ol' from the elite. Total crap hypocrisy -- at least coming from him.
-Darwin

As a watcher of Bill Gates since the '70s, I believe that his original ultra-pragmatic business style (often interpreted as ruthless) has shifted twice: once after becoming a father and recently, after setting a retirement timetable.

It is indeed ironic that Bill is calling on the leaders of the future to avoid his path. He is a prime example of why we should be cautious of leadership that has not been tempered by experience, for it often lacks compassion and leaves a wide swath of damage in its relentless pursuit of "success."
-Richard

I believe that his change in position comes from personal growth. He has gone from being single and taking over the business world to being married, having children, maturing and realizing that there is so much more to the world. I believe this has changed his perspective and he is trying to communicate this. Remember, it's the Bill and Melinda Gates Foundation, not just the Bill Gates Foundation. Through this foundation he has also been exposed to different aspects of the world that may have opened his eyes.
-Craig

Although I agree with helping disadvantaged people, I am not quite sure that it is the right approach. It seems to me that providing vaccines and medication is going to compound the problem as most poor countries are, foremost, in desperate need of food. I think that it would be much better to help these people cultivate their own crops and raise their own farm animals than anything else. Mr. Gates, as well as the rest of the world, must treat the underlying cause of poverty which is the lack of resources.

World Vision has the right idea of what it takes to help these people. I myself purchased a goat and two chickens which are going to make a tremendous impact on a few families. Like most Americans, I probably could do more but I am taking a wait-and-see approach to see whether the concept is going to be successful. I imagine it will.
-Claude

Yesterday, Pete wrote in to share his thoughts on Mac and Linux security compared to Windows. A few of you had some things to say in response:

As a self-proclaimed "Linux guy," Pete should know that any process running as root that was compromised on a *Nix system would indeed give access to the entire system. And I've run into files on a Windows machine that, as the local machine administrator and domain admin, I could not delete, view, modify, change perms, take ownership, delete or otherwise manipulate. Root trumps all on *Nix.
-Dave

I have bad news for Pete. Neither Unix nor Linux is inherently better than Windows, and stopping hackers from being successful actually has little to do with the OS involved. Case in point: the RTM worm. The RTM worm achieved overwhelming success in penetrating Internet systems when it was launched. The principal OS at that time for Internet systems was various flavors of Unix, and that's what the worm attacked. The worm was successful not because it attacked new or different exploits, but because there was a significant number of systems which did not have current patches installed.

There are two reasons hackers target Windows today: It comprises the largest number of installed systems, and there is a significant number of users who do not install patches. This happens because the vast majority of people using computers don't actually care how it works, as long as it does. Thus, a computer that works is not one that requires attention. Collectively, the Linux user community has a higher percentage of people who actually care about how their system works; Mac users tend to be less interested. Neither of these generalizations applies in all cases, of course; there are Mac users who care about technical issues and there are Linux users who just wanted a free OS. The point is, none of them is safe or not safe because of the inherent "hacker-proof-ness" of their OS. Unpatched Linux is vulnerable, as is unpatched OS X, as is unpatched Windows. If you get enough Mac users with something worth stealing, who don't care (enough) about security, you will see attacks directed at Macs.
-Anonymous

And one reader isn't buying into the optimism surrounding Microsoft's blockbuster 2Q earnings report:

Microsoft is stagnant, stale and so 1990s. The market knows it; that's why the stock price is flat. The bright minds coming out of college know it; that's why they are lining up to apply at Google, Red Hat or Apple. And increasingly, MS managers know it, which is why so many of them are jumping ship. Even Bill knows the glory days are over and is getting out while the getting is good.

Yes, a company with a history of 90 percent market share can generate huge earnings for a long time after its peak, but there is nowhere left to go but down.
-Anonymous

Share your thoughts with us! Leave a comment below or send an e-mail to llow@redmondmag.com.

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