VMware, Inc. (VMW) is set to benefit from the major shift to the cloud, with projects starting to be signed and more companies realizing the significant return on investment in moving to a cloud-based infrastructure, says Daniel Ives, Managing Director at FBR Capital Markets & Co.
“In terms of movement on the private cloud, with names like VMware, I truly believe a lot of projects are kind of in their early days of starting to be signed. I mean VMware is a name where — they’ve had a tough few quarters, but I think they’re well-positioned second half of the year, given you have more companies kind of making this move into the cloud through all these enterprise license agreements, those who are these larger license deals,” Ives said.
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Ives says that there has been a number of early cloud adopters in larger enterprises, and he expects a big shift in small- and medium-sized businesses as well, as more companies realize the cost savings. This positions VMW well in the second half of the year, Ives adds.
“From a pure ROI, it’s a game changer in terms of cost savings, because instead of a legacy hardware server-centric type of infrastructure, you’re moving to much more of a hosted virtualized environment, where there’s a lot of capex as well as opex cost savings. When you make that move there are some upfront expenses, but I think the ROI improvement is so meaningful that the shift will still be made. There are a lot of companies who are making the jump,” Ives said. “I think VMware is going to be a strong name in the second half of the year.”
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