Dow Jones gained but VMware founder booted

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Jul 09 2008
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Dow Jones industrials gained more than 150 points as the oil prices tumbled more than nine bucks for two days of trading alone. Phew! I thought the oil prices will shoot up to $200 as what some experts predicted. But hey, this is not the end of the story yet – just like stock or option trading, commodities are no difference from the ups and downs. And so you’ll hear this is just a correction, a huge one if you were to ask me, and the bear could turns to bull again. However if you look at where the DJIA is currently, even if the oil prices drop another ten bucks the Dow might not be able to go above 12,000 mark confidently.

As the earning season starts, it will take many good and extraordinary earning results to give a jab to the gloomy stock market. World’s third largest aluminium producer Alcoa Inc. posted stronger-VMware Dianne GreeneEMC Joe Tuccithan-expected second-quarter earnings but the profits fell 24 percent due to high costs of raw materials. Meanwhile EMC Corp.’s shares tumbled $1.75 (11.5 percent) to $13.39 as something funny and strange happened. If you’re in the IT, then chances are you should have at least heard of VMware if not familiar with the product. VMware was and still is the leader in the so-called virtualization software. The software is so useful and powerful especially to technical support in multiple type of OS (operating system) emulation. It can emulate from Microsoft, Linux, Solaris to even Mainframe OS from your normal desktop or notebook provided you’ve sufficient hard-disk and memory resources.

The prospect of the software attracted the attention of EMC Corp, the leader or “Taikor” in the storage market, who then acquired 86% of VMware for $625 million in 2004. However as with the risk of and M&A, the EMC’s Chief Joe Tucci Paul Maritznever saw eye to eye with VMware’s founder Diane Greene as far as how VMware business should be run. Diane Greene knew that she no longer needed and before VMware finish announcing its chief executive was stepping down, the company pulled references to the co-founder off its Web site and installing the biodata of its incoming chief executive, Paul Maritz (a legendary former Microsoft executive).

But what really puledl the EMC stock down was the lower revenue projection for the financial year 2008 – modestly below previous guidance of 50% growth. I supposed it’s hard to stay independence especially if you still wish to strike deals to sell your solutions to your parent’s competitors.

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