(WEB HOST INDUSTRY REVIEW) — Virtualization technology developer VMWare (www.vmware.com) announced on Tuesday it has acquired open-source Java framework provider SpringSource (www.springsource.com) for $420 million.
The purchase, which is expected to close in September, is VMWare’s largest corporate acquisition ever.
The transaction will comprise of $362 million in cash and equity plus an assumption of approximately $58 million in unvested stocks and options.
By acquiring SpringSource, which currently has 150 employees, VMWare will now have the in-house talent to develop its vShere virtualization hypervisor and management layer work with cloud applications.
Some argue that VMWare paid too much for SpringSource, with analysts estimating the open-source company’s annual revenues anywhere between $10 to $40 million.
With Microsoft actively competing against Vmware by offering free Hyper-V, VMWare plans to become more than just a virtualization vendor, starting with this acquisition.
The two companies will partner with goals of offering a platform that will let customers develop, run and manage applications in both internal and external cloud architectures.
“VMware has led the modernization of data center infrastructures through innovative virtualization and cloud architectures, providing customers with cost savings, agility and choice,” says Rod Johnson, CEO of SpringSource. “The SpringSource team and community are committed to revolutionizing the way companies build, run and manage applications. By combining forces, I’m confident that we’ll be able to deliver a set of truly remarkable solutions that dramatically simplify enterprise IT.”
The announcement follows VMware’s recent acquisition of 4 million shares of newly issued Terremark common stock for $20 million, which gives VMware approximately 5 percent of Terremark’s total common stock.
