Big move today in Isilon Systems (ISLN): shares of the storage systems company have jumped $1.08, or 19.9 percent, to $6.49, on volume of more than 660,000 shares, or more than 4x the daily average. Today’s rise boosts the company’s three-day rally to 33 percent.

So, what’s going on here?

Well, here’s what I know.

Chris Blessington, the company’s senior VP of marketing and communications, notes in an interview with Tech Trader Daily that management has been on the road getting the word out to investors, press, analysts and customers about the company’s big push into the virtualization market, where it is taking on NetApp (NTAP). Blessington notes that the company was in New York on Monday and Tuesday talking to potential investors in a series of meetings arranged by Needham & Co.

Read the rest of this post on the original site

VMworld, the annual conference hosted by software maker VMware, is fast becoming one of the hot tech conferences, in large part because VMware’s technology has become an important selling point for tech-equipment makers like Dell (DELL) and Cisco (CSCO) Systems. There are likely to be dozens of new product announcements made at the conference, which kicks off Monday.

One company isn’t waiting. Arista Networks on Wednesday announced it has developed software for its gear that makes it easier to manage servers that run VMware’s “virtualization” software. A virtualized server can run up to 20 times the number of programs as one without the software, which is a big efficiency improvement for information-technology departments. But it’s also created a new problem: How do you keep track of everything running on these servers and make sure they can be accessed through the network, which is made up of physical devices called switches?

Read the rest of this post on the original site

I don’t often look to movies about beer for poignant macroeconomic commentary, but as February ended with an 8.1 percent unemployment rate (and rising), a line from “Strange Brew” struck me as particularly relevant. As they’re introduced to their new jobs as the only two workers on the bottling line, the Mackenzie brothers are told: “Welcome to 1984, the age of automation and unemployment. The rise of the machine and the fall of man. The end of the human era.”

Will cloud computing, as some predict, be to information technology today what automation was to the assembly line in the ’80s? If so, what happens to those jobs? To the people who used to do them?

The impact on the bottom line is impossible to deny. Cutting IT costs while maintaining, or even improving, performance levels saves jobs in other departments and might even help keep the company afloat. When done right, the savings realized from server consolidation are well documented, and they only improve when cloud-like levels of virtualization, automation and outsourcing come into play. The cold, hard truth is virtualization and cloud computing let IT departments do a lot more with a lot less.

Read the rest of this post

Virtualization software vendor VMware (VMW) this evening reported sales and profit for its third quarter ended Sept. 30 that beat expectations on both counts.

Sales rose 32 percent, year over year, to $472 million, while profit per share, excluding some costs, came in at 24 cents. Analysts had been looking for 20 cents per share on $462 million.

Sales in the U.S. grew 24 percent in the quarter, year over year, while international sales rose nearly twice as fast, at 42 percent.

For the full year 2008, the company reiterated an outlook for revenue growth of between 42 and 45 percent. That range is above the 41.7 percent analysts have been forecasting, to $1.88 billion.

Read the rest of this post

Competition is intensifying in the virtualization sector.

Red Hat (RHT) this morning announced an agreement to acquire Qumranet, an Israeli company that provides a virtualization software platform, for $107 million in cash.

Qumranet’s Web site says that “organizations use Qumranet’s first product, Solid ICE, to host Windows and Linux desktops centrally on servers in the data center.” Investors in the company included Sequoia Capital and Norwest Venture Partners.

The company said the acquisition will not materially increase revenue in the Feb. 2009 fiscal year, but should add “up to $20 million” in revenue in fiscal 2010. Red Hat said the deal is expected to be dilutive to 2009 GAAP EPS by 5-6 cents a share, and to cash flow from operations by 3-4 cents.

Read the rest of this post

Investors continued to shed VMware (VMW) shares today in the wake of yesterday’s firing of CEO Diane Greene and a reduction in the company’s 2008 outlook.

The company, which went public August 13, 2007 at $29 a share, immediately went soaring higher, trading as high as $125.25 on an intra-day basis last Halloween. At the time, the perception was that the company had essentially no competition in the burgeoning market for server virtualization software; Microsoft (MSFT) has since made an aggressive move into the market, as did Citrix Systems (CTXS).

Several analysts this morning actually asserted that replacing Greene with former Microsoft exec Paul Maritz should be considered a positive development for the company. “It was not a completely unexpected move,” writes Citigroup’s Brent Thill.

Read the rest of this post

You’ve heard of BYOB, now get ready for Bring Your Own Laptop. There’s a small but growing trend in which companies are choosing to give employees money toward their personal laptop, rather than providing a company-issued portable. British Petroleum is among the companies trying the approach.

One of the technologies making that possible is desktop virtualization, which allows companies to put their software or even an entire corporate image onto a device without having to worry about the fact that it doesn’t control the entire laptop. Basically, the corporate stuff can run in a sandbox, with personal data and programs running alongside–but not intermingling with–the business processes.

Read the rest of this post