VMware Celebrates Nine Years of Innovation and Growth

Market Leader Extends Lead as Customers Increasingly Standardize on Robust and Game-Changing Products

PALO ALTO, Calif., January 30, 2007 - VMware, Inc., the global leader in software for industry-standard virtualized desktops and servers, this month celebrated its nine-year anniversary, commemorating nearly a decade of innovation, excellence and phenomenal growth.

"We started VMware with the belief that virtualization was one of those rare technologies that could fundamentally change the established IT landscape and drive significant new value for customers and the industry in ways few could imagine," said Diane Greene, president of VMware. "The accelerating adoption of VMware products by customers around the world, the new market opportunities it has created for partners and its emergence as one of the highest-growth multibillion-dollar software sectors has made virtualization the most significant IT trend of this decade."

Virtualization has rapidly progressed from an early adopter technology into a mainstream business practice. Organizations of all sizes are considering virtualization as one of their top IT priorities in the coming years, on top of the already widespread deployment of virtualization seen in today's IT environments:

  • IDC estimates 2.3 million virtual servers were deployed in 2006, compared to 7.7 million physical servers in the same year (1)
  • A recent IDC survey showed 76 percent of companies to be adopting or planning to adopt x86 virtualization in the next 12 months (2)
  • Forrester estimates that 46 percent of the Global 2000 are either already using or will pilot virtualization within the next twelve months and 71 percent of them are increasing their spend on virtualization in the next 12 months (3)

VMware continues to drive its leadership position in the virtualization market through its industry-leading and award-winning products.  Organizations of all sizes and from all industries have embraced virtualization for use cases ranging from server consolidation and containment, software lifecycle automation, business continuity and desktop manageability and security.  The compelling value proposition, breadth of use cases and tangible cost savings has fueled customer adoption of VMware products to record levels:

  • 2006 VMware revenue increased 83 percent year-over-year to $709 million; VMware grew Q4, 2006 revenues 101 percent year-over-year to $232 million, placing it on an annual run rate of more than $900 million
  • 43 percent of VMware customers deploy all or most of their new applications in VMware virtual machines, with most customers expecting to virtualize at least 50 percent of their IT infrastructure within three years
  • 86 percent of VMware customers use VMware virtualization products in production environments
  • 77 percent of VMware customers plan to upgrade their existing VMware environments to VMware Infrastructure 3 by mid 2007
  • In 2006, VMware received 30 awards for innovation and product excellence, including eWEEK's award for being one of the most 25 influential products of the past 25 years

The market for virtualization-related services, hardware and software has also seen tremendous growth in 2006. Customers are increasingly looking to the technology industry to provide solutions optimized for virtualization, a trend that was reinforced in 2006 with the emergence of hardware-assisted virtualization, paravirtualization in the operating system, broad ISV support for virtual machines and a rapidly growing ecosystem of service providers.

About VMware, Inc.

VMware, an EMC company (NYSE: EMC), is the global leader in virtual infrastructure software for industry-standard systems. The world's largest companies use VMware solutions to simplify their IT, fully leverage their existing computing investments and respond faster to changing business demands. VMware is based in Palo Alto, California. For more information, visit www.vmware.com or call 650-475-5000.

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1IDC Special Study, Worldwide Server Virtualization, 2006-2010 Forecast, Doc #07C5089, Jan 2007

2Ibid

3Server Virtualization Goes Mainstream, Forrester Research, Inc., Feb 2006

VMware is a registered trademark or trademark of VMware, Inc. in the United States and/or other jurisdictions. All other marks and names mentioned herein may be trademarks of their respective companies.

This release contains "forward-looking statements" as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and achieving anticipated synergies; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (vi) component and product quality and availability; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) insufficient, excess or obsolete inventory; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC's filings with the U.S. Securities and Exchange Commission. EMC and VMware disclaim any obligation to update any such forward-looking statements after the date of this release.