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TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the first quarter ended March 31, 2008. Total revenues for the first quarter increased by 30% to $23.9 million compared to $18.3 million for the comparable prior year quarter. Online revenues increased by 38% to $18.9 million and represented 79% of total revenues. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, as further adjusted for stock-based compensation) increased by 24% to $3.6 million compared to $2.9 million for the comparable prior year quarter.

“We continue to execute well against the big opportunity in our market as evidenced by our online revenue growth of 38% in the quarter,” said Greg Strakosch, Chairman and CEO of TechTarget. ”The migration of marketing dollars to targeted, online products that deliver measurable ROI is continuing to fuel our growth. “

Total gross profit margin for the quarter was 68% compared to 67% for the comparable prior year quarter. Online gross profit margin for the quarter was 73% compared to 74% for the comparable prior year quarter.

Net loss for the quarter was $112,000 compared to net income of $317,000 for the comparable prior year quarter. The decrease in net income is primarily attributable to increases in stock-based compensation expense and the amortization of intangible assets expense. Adjusted net income (net income adjusted for amortization and stock-based compensation, as further adjusted for the related income tax impact) increased by 54% to $1.9 million compared to $1.2 million for the comparable prior year quarter. Loss per basic share for the quarter was $0.00 compared to net income per basic share of $0.01 on a pro forma basis for the comparable prior year quarter. Adjusted net income per share (adjusted net income divided by adjusted weighted average diluted shares outstanding) for the quarter was $0.04 compared to $0.03 on a pro forma basis for the comparable prior year quarter. As of March 31, 2008 TechTarget had $60.4 million of cash, cash equivalents and short term investments, and bank debt of $5.3 million.

Recent Company Highlights

Launched two new websites in the Storage market:

TechTarget was named by The Boston Business Journal as one of the 2008 Top 20 Best Places to Work, in the Large Companies category, for the Greater Boston Area. This is the third time TechTarget has been recognized by the publication. Other companies on the list include: Genzyme, Digitas, Vertex Pharmaceuticals, KPMG LLP and Comcast.

Held the TechTarget Online ROI Summit ‘08 East in Boston. Hundreds of customers and prospects attended the event to learn the best ways to measure and improve the ROI of their online marketing investments. Attendees included representatives from AMD, CA, CDW, EMC, Google, HP, IBM, Iron Mountain, McAfee, Microsoft, Motorola, Novell, Pitney Bowes and Sun Microsystems.

Financial guidance

In the second quarter of 2008, the Company expects revenues to be within the range of $30.4 million to $31.6 million and adjusted EBITDA to be within the range of $8.6 million to $9.4 million.

Annual guidance is unchanged from the Company’s guidance provided in the February 13, 2008 earnings release. For the fiscal year 2008, the Company expects revenues to be within the range of $118.0 million to $122.0 million and adjusted EBITDA to be within the range of $33.0 million to $35.0 million.

Conference Call and Webcast Non-GAAP Financial Measures

This press release and the accompanying tables include a discussion of adjusted EBITDA, adjusted EBITDA Margin, adjusted net income and adjusted net income per share, all of which are non-GAAP financial measures which are provided as a complement to results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The term “adjusted EBITDA” refers to a financial measure that we define as earnings before net interest, income taxes, depreciation, and amortization, as further adjusted for stock-based compensation. The term “adjusted EBITDA Margin” refers to a financial measure which we define as adjusted EBITDA as a percentage of total revenues. The term “ adjusted net income “ refers to a financial measure which we define as net income adjusted for amortization and stock-based compensation, as further adjusted for the related income tax impact for the specific adjustments. The tax rates used in the reconciliation represent the Company’s forecasted effective tax rate excluding discrete tax items, such as non-disqualified dispositions, occurring in the respective periods. The term “adjusted net income per share “ refers to a financial measure which we define as a djusted net income divided by adjusted weighted average diluted shares outstanding. These Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, our definition of adjusted EBITDA, adjusted EBITDA Margin, adjusted net income and adjusted net income per share may not be comparable to the definitions as reported by other companies. We believe adjusted EBITDA, adjusted EBITDA Margin, adjusted net income and adjusted net income per share are relevant and useful information because it provides us and investors with additional measurements to compare the Company’s operating performance. These measures are part of our internal management reporting and planning process and are primary measures used by our management to evaluate the operating performance of our business, as well as potential acquisitions. The components of adjusted EBITDA include the key revenue and expense items for which our operating managers are responsible and upon which we evaluate their performance. In the case of senior management, adjusted EBITDA is used as the principal financial metric in their annual incentive compensation program. Adjusted EBITDA is also used for planning purposes and in presentations to our board of directors. Adjusted net income is useful to us and investors because it presents an additional measurement of our financial performance, taking into account depreciation, which we believe is an ongoing cost of doing business, but excluding the impact of certain non-cash expenses and items not directly tied to the core operations of our business. Furthermore, we intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Forward Looking Statements

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Apple Reports Third Quarter Results

Apple Reports Third Quarter Results

Well, it’s about that time of the year. And, while Apple’s busy releasing all sorts of hit products like the iPad and iPhone 4, it’s about time to figure out how much they’ve actually made over the last few months. Today, Apple finally unveiled their official third quarter results, which equals one full quarter with the iPad out in the world. And, believe us when we say that the iPad’s made a big dent in the market (and a very good bulge in Apple’s wallet).

Apple managed to sell 3.47 million Macs in this quarter, which is a 33 percent increase versus last year. And that also means that it’s a new quarterly record for the Cupertino-based company, too. As for iPhones, they sold 8.4 million of those, which is a 61 percent increase over last year. 9.41 million iPods were sold in the quarter, and that marks an 8 percent decline from last year.

However, the heavy hitter is the new one on the stage. The iPad, which Apple began selling this quarter, managed to fly off the shelves, reaching 3.27 million customers since its debut. “It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4,” said Steve Jobs, Apple’s CEO. “iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year.”

Press Release:

Apple Reports Third Quarter Results

All-Time Record Revenue Earnings Increase 78 Percent

“It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple’s history with iPhone 4,” said Steve Jobs, Apple’s CEO. “iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year.”

“We’re really pleased to have generated over $4 billion of cash during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2010, we expect revenue of about $18 billion and we expect diluted earnings per share of about $3.44”

Apple will provide live streaming of its Q3 2010 financial results conference call beginning at 2:00 p.m. PDT on July 20, 2010 at chúng tôi This webcast will also be available for replay for approximately two weeks thereafter.

More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K, as amended, for the fiscal year ended September 26, 2009, its Forms 10-Q for the quarters ended December 26, 2009 and March 27, 2010, and its Form 10-Q for the quarter ended June 26, 2010 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

© 2010 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and iPhone are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Wall Street Beat: Smartphone Reports Brighten Up Mixed Results For Tech

A fresh round of quarterly results and market research this week show some shadows over the networking and component markets while smartphones, as usual, were the stars of the tech arena.

The biggest disappointment of the week came from Cisco Systems, which Wednesday reported a year-over-year decline in profit and sales and offered a gloomy forecast for the current quarter. For the three-month period ending in October, Cisco reported net income of $2 billion, down 4.6 percent from a year earlier, while sales edged up by 1.8 percent to $12.1 billion. Company executives said they expect revenue this quarter to decline between 8 percent and 10 percent from a year earlier.

Several problems hit Cisco during the quarter, executives said. In emerging markets, sales declined. Concerns about surveillance in the wake of revelations about the U.S. National Security Agency may have had some impact on sales, particularly in China, company officials said.

Economic uncertainty as Europe still struggles with recession also played a part in the weak results, officials said. Part of the disappointing quarter, however, was due to Cisco’s transition to a new line of carrier network equipment, which has put a damper on orders, company executives acknowledged.

Hosting company Rackspace reported that quarterly profit was $389 million, up a solid 16 percent year over year, but profit plummeted 40 percent to $16 million. The culprit for the decline in profit was increased capital expenditures, which company executives said were necessary to achieve a fast, global rollout of what it calls its “performance cloud.”

Several analysts said the additional expenditures make sense. “We believe it is clear that additional investment is required to again stimulate growth in the newest segment of the business,” said Canaccord Genuity analyst Greg Miller in a research note.

Applied Materials, often seen as a bellwether for the components market since it is a provider of chip-making equipment, announced that quarterly sales were fairly flat year over year, rising from $1.65 billion to $1.99 billion, while profit rose to $183 million from a loss the year earlier. The results appear to be positive especially since the company may be facing weakening demand for NAND components.

The global NAND flash memory market is decelerating in the second half of the year as demand diminishes for local data storage in smartphones and tablets, due in part to the rise of cloud-based services, according to a report from IHS. The market research company said that preliminary estimates show that total NAND shipments were estimated to have grown 8 percent in the third quarter, down from 9 percent in the second quarter.

For the fourth quarter, NAND shipments will expand by an even lower 5 percent, down sharply from the 16 percent rise seen in the fourth quarter of 2012, IHS said.

“Streaming media options and free cloud storage are diminishing the prospects for increased NAND usage in smartphones,” analyst Ryan Chien said in the report. “This is true for all three major mobile operating systems—Apple’s iOS, Google’s Android and Microsoft’s Windows Phone. With less need to store data in local devices, the requirement for greater storage is reduced.”

The quarterly Ericsson Mobility Report, meanwhile, showed that smartphone take up is staying strong worldwide. Total mobile subscriptions through the third quarter year totaled about 6.6 billion, including 113 million subscriptions added during the third quarter, according to the report.

Worldwide subscriptions have continued to increase 7 percent year-over-year, the report said.

Smartphone sales as a percentage of all mobile device sales have been booming, according to the report. Smartphones accounted for about 55 percent of all mobile phones sold in the third quarter, compared to around 40 percent in the full year of 2012.

Smartphone uptake “doesn’t show any sign of slowing down,” according to the report. “Of all mobile phone subscriptions, 25-30 percent are associated with smartphones, leaving considerable room for further uptake,” the report said.

On its part, IDC said that Google’s Android OS reached a milestone during the third quarter. With 211.6 million smartphone units shipped during the quarter, Android accounted for 81 percent of all smartphone shipments, marking the first time that Android topped 80 percent market share.

Apple’s iOS took 12.9 percent market share while Windows phone came in third place with 3.6 percent, IDC said. Total smartphone shipments increased 39.9 percent to 261.1 million units. Windows phone shipments skyrocketed 156 percent, albeit from a much lower base than Android or iOS.

“Android and Windows Phone continued to make significant strides in the third quarter. Despite their differences in market share, they both have one important factor behind their success: price,” wrote Ramon Llamas, in the report. “Both platforms have a selection of devices available at prices low enough to be affordable to the mass market, and it is the mass market that is driving the entire market forward.”

Top 10 Money Savers For 2008

IT executives have a number of major initiatives available to them for cutting capital expenses and operational costs in 2008 that can trim the overall IT budget by five percent or more. The largest opportunities lie in process and management changes. There are also gains to be made from workforce alignments, including outsourcing, as well as capitalizing on technology shifts.

Workforce Alignment – 25%

Contrary to reports that job opportunities in the IT field are shrinking, the battle for IT talent is getting more intense, as the number of shortages in key areas are increasing. This is putting pressure on IT executives to create and execute a workforce diversity plan that includes hiring new talent, retention and retraining strategies, succession strategies, contingent workforce allocations, and outsourcing.

The new paradigm calls for executives to hire self-starters that are adaptive, creative, flexibility, independent, and knowledgeable in ecosystem logic rather than inflexible, in-depth technical personnel.

IT executives should be attempting to drive annualized staff productive utilization up towards 70-to-80 percent. This can only be achieved by cross-training staff to handle tasks not normally within one’s domain, using consultants, and/or outsourcing. Executives need to determine what tasks should remain in-house and which ones should be given to outside firms.

Companies must maintain control of their architecture while the construction and operations tasks may be done by outside skills, depending on the criticality of the efforts and the extent to which it is customer facing. The other core skills to be acquired, developed and maintained in-house are the user and vendor relationship management and project management skills.

IT organizations that can manage their user and vendor relationships, operations and projects, as well as strategize and architect for the future are well positioned. Add to that a good succession plan and executives will have a sustainable operation that can meet or exceed expectations.

If executives focus on restructuring the workforce to achieve the flexibility that may be required in the future, it is possible for IT to reduce its workforce expenses by up to 25%. Executives that have executed these types of plans have reduced their operations staff by up to 50% and their help desk staff by up to 30%.

Gains Through Process Improvements

Process improvements can offer the biggest gains for the IT organization. Gains can be made by addressing non-value-added projects, poor SOX (Sarbanes-Oxley Act) compliance processes, IT financial management, or non-optimized procurement processes. IT executives should undertake a study of these items and fold the quick hits into their 2008 budget planning process.

The people conflicts, culture, and personnel integration issues can be tough nuts to crack, but there are a number of areas where process improvements could occur which can reduce operational expenses. The top area for IT executives of public companies to scrutinize for savings is the SOX compliance processes.

SOX Changes – 20%

The newly approved Sarbanes-Oxley Accounting Standards No. 5 (AS5) guidelines greatly reduce the cost of compliance. One of the biggest savings from this from an IT perspective is the ability to combine all of the regulatory tests into a common test plan that can be executed periodically. The outputs and reports can be certified or validated for use by the auditors, lines of business, various regulatory agencies, or others that seek confirmation of compliance. The savings can reduce the cost of compliance by more than 20%.

Asset Review – 15%

An extensive financial review of IT assets by an outside financing organization could result in significant and rapid capital or operational expenditure (CapEx or OpEx) savings. Aside from the traditional financing or leasing deals, these companies are also willing to do asset swaps, lease/buybacks, project financing.

These firms have the ability to work with the corporate finance or treasury department and IT to structure financing terms that map to the requirements and strategies of the enterprise. By bringing them in to work with the appropriate financial unit and IT, there is a good chance that some creative financial opportunities can be identified that can result in reducing major CapEx or OpEx by up to 15%.

Moreover, many potential PC leasing opportunities that could cut acquisition costs by 15% are not able to be executed because the enterprise does not have a decent asset management process. For example, companies without strong asset management processes and controls are in possession of up to 25% more pagers, PCs, PDAs, and other client devices that should have been removed from the companies’ books. Compounding this problem is that most of these unneeded or unused units are still included in the software asset counts.

Thus, the company is paying for installed but unused software and unnecessary network connectivity, and is allowing a sellable asset to depreciate from a residual value of 10-to-15 percent to zero. IT executives have an opportunity to readily fix this problem and start recouping any added expenses within a 12 month period. This is an investment worth putting into the budget as the return on investment (ROI) is attainable in a short period of time.

Strategic Procurement – 40%

On a more global scale is the need for a strategic procurement office and process. By creating an organization that aggressively pursues contract and vendor management, enterprises can shift from being on the defensive in their dealings with suppliers to an offensive posture. This alteration of attitude and position can have impressive results, with gains up to 40%. Moreover, these organizations pay for themselves year after year.

Business Management – 10%

Another area of weakness is business management, including alignment with the business and change, configuration, project and service management. One of the biggest cost items is investment in projects that fail to achieve the desired business objectives.

Studies have shown that companies are spending 20–to-25 percent of their IT budgets on new project development and that more than half of that money (some studies say up to 75%) is wasted in projects that are cancelled, fail entirely, or do not achieve their business objectives. Implementation of better IT alignment and project portfolio management processes can significantly cut those costs.

IT organizations can become more efficient and effective in the delivery of their products and services. A quick hit can be a refinement of the change management process. An effective change management process can reduce the number of changes, improve quality, and shorten time to market and thereby reduce the overall costs of projects by five percent or more.

Records (Mis-) Management – 20%

Another area of process improvement is that of global e-records management and information management. Companies are still maintaining a number of duplicative copies of data, in some cases more than 50 copies. Enterprises that have created golden copies and tagged others as temporary or who have consolidated the databases into shared repositories have been able to reduce storage requirements and growth, shorten the job schedule cycle, minimize e-discovery costs and risks, and better balance online and archived data.

Most IT executives are familiar with many of the technology savings but surprisingly, these same executives are not aggressively pursuing them. There are a number of short-term, quick hits IT executives can attack and therefore achieve savings in the 2008 budget cycle.

Getting Green – 10%

A very hot topic today is that of “going green.” Over the last two years, enterprises have become aware of the energy costs of operating data centers. The power costs have gone from an expense that only the facilities department cared about to one at the CEO, CFO, and boardroom level. Executives should be able to reduce data center energy costs by 10% or more.

Modernization – 40%

Companies are also addressing the cost challenge through application and system modernization, platform consolidation, and virtualization. Although most large enterprises have one or more of these efforts ongoing, savings from them are uneven. Companies can achieve operational cost savings of more than 30%, with the project break even points in the 12-to-18 month range.

Truly successful projects have taken a holistic approach to the problem and address the following key areas:

Number and location of data centers

Automation, job scheduling and workforce utilization

Modernization and normalization of applications

Number of servers and server consolidation and virtualization

Storage consolidation, platform types, sharing, and virtualization

Power and cooling

Network types and bandwidth


Projects of this nature have been undertaken by both HP and IBM and both parties are pointing to dramatic gains.

Measuring Metrics – 15%

The last of the top 10 is process management. This is back to basics for the last of the savings. IT executives need to establish meaningful measurements and then manage to them for each of the above or, for that matter, any initiative. Tasks that are tightly monitored, managed and reported on do result in a reduced time to deliver. IT executives that improve their management methods can meet the demand to “do more for less” by up to 10-to-15 percent.

Executives have an opportune time during the fall planning cycle to re-evaluate its workforce allocations and diversity, process improvement plans, and data center operations initiatives and to adjust them to achieve greater savings. IT executives should seize the initiative and work with line of business, finance, procurement, and other senior executives to develop strategies that can help their enterprises achieve their short- and long-term goals and strategies.

Cal Braunstein is CEO and executive director of Research for the Robert Frances Group . For more detail on these tips, go to the RFG website and follow the instructions in the RFG Risk Management Seminars box.

2008 In Review, Surveying The Os Landscape

It started sensibly enough with the launch of Microsoft’s Windows Server 2008 in February. The new OS was generally well received, even if no one actually seemed to be implementing it. Server 2008 introduced several important new features, like the Server Core installation option — the key feature of which was that it got rid of all the important new features — and Hyper-V, Microsoft’s important new virtualization offering. Perhaps the most notable thing about Hyper-V though was that it was a virtual feature: It wasn’t ready for the release of Server 2008 and didn’t see the light of day in its final form till June.

June saw the day-to-day retirement of Bill Gates from Microsoft, and the transformation of the ubergeek to one half of the world’s most unlikely comedy double act, with the formerly funny Jerry Seinfeld making up the other half. The world was treated to the site of Gates wiggling his tochas as a sign to Jerry that in the future computers would be … edible. It is rumored that this was part of a campaign to get people to buy more copies of Vista, although the campaign was canned before its meaning became clear.

UNIX had a rather depressing year, with server spending on the platform down 8.7 percent in the third quarter according to IDC’s Worldwide Quarterly Server Tracker. Still, with 30 percent of the market based on spending (10 percent less than Windows), the senior citizen of the server room is still beating the pants off little Linux, which accounts for just 14 percent of server revenue. All three platforms saw declines in spending compared to the same quarter last year, but UNIX revenue fell the fastest, according to IDC’s figures.

The year’s real loser was Sun. The company lost market share and saw its value drop by almost 90 percent during the year. At its current share price, the company that once powered the Internet is worth little more than a bag of Twinkies.

Another UNIX company that may not have much of a future at the end of 2008 is SCO. Come to think of it, SCO didn’t start the year with much of a future either. It started hostilities with the Linux world way back in 2003 when it demanded $1 billion from IBM, and its battle may finally have come to an end: In November, a federal judge ruled that SCO actually owes Novell $2.5 million plus interest. Confused? All you really need to know is that SCO is not UNIX, and given that it apparently doesn’t have $2.5 million, the top candidate for title of the world’s most unpopular software company now appears to be in serious trouble.

2008 was the year that Apple tried again to make an impact on the enterprise OS world, with typically comical results. The Cupertino consumer gadget-maker has been offering server products for years despite failing to register anything more than the tiniest blip in terms of market share.

In June, it released version 2 of its iPhone firmware, which includes a couple of “business” features, such as improved support for VPNs and compatibility with enterprise e-mail systems, apparently in the hope that this would lead to wide-scale adoption of its server products. But probably thanks to an almost complete lack of enterprise-grade management and security tools, the iPhone has yet to be adopted to any extent in the enterprise market, and Apple’s server market share remains minuscule.

With Crash Bandicoot Nitro Kart 3D and Virtual Pool replacing Super Monkey Ball among the top-selling apps for the iPhone, the signs are that Apple’s converged mobile business device is turning out to be nothing more than a Nintendo machine that can make calls.

In the Linux world, Red Hat Enterprise Linux and Novell’s SUSE Linux Enterprise Server continued to dominate the enterprise Linux market place. Novell continued its strategy of dancing with the devil by agreeing to take up to $100 million of Microsoft’s closed-source-derived money in exchange for support coupons to give away or sell to its customers. Lower down the Linux food chain, Canonical released Ubuntu 8.10 Server Edition — codenamed Intrepid Ibex — in October. This is available in tandem with its longer-supported “Gutsy Gibbon” server OS, released in April.

The latter part of the year turned in to something of a Microsoft fest, with the Redmond giant holding a Professional Developers Conference (PDC) in early October, followed by the Windows Hardware Engineering Conference (WinHEC) in November. PDC saw the announcement of Microsoft’s Azure cloud computing platform, and there was much talk of new Office Web Applications. Details were few and far between, but there’s no doubt the company has seen what Google, Amazon and others are up to in the cloud, and wants to make sure that it is a part of (or should that be “central to”) it.

And let’s not forget self-proclaimed Linux “god “Linus Torvalds. In an effort to make things interesting and to keep Linux in the limelight during the year, he light-heartedly called all BSD developers “masturbating monkeys,” and all Digg-users “wanking walruses.” Perhaps not the nicest way of addressing other members of the technology community, but you can’t help thinking that in years to come these would make excellent code names for future release of a certain well known open-source, Linus inspired operating system. Forget Gutsy Gibbons and Intrepid Ibexes: “Ubuntu 11.4 Server Edition: Masturbating Monkey,” anyone?

Seven Virtualization Trends To Watch In 2008

Editor’s note: Amy Newman, the managing editor of ServerWatch, has covered virtualization since 2001.

With the number of days left in 2007 approaching single digits, it’s time to put this year to bed and look ahead to 2008. It would be hard to argue that 2007 was a watershed for virtualization technology. From chipmakers to ISVs, every IT demographic felt a virtual tug as the technology made its way into the mainstream.

Virtualization is even starting to impact which servers are leaving the factory. According to research firm IDC, third-quarter factory revenue in the worldwide server market grew 0.5 percent year-over-year, while the number of server units shipped grew 1.5 percent less than it did for the previous period in 2006. Is this an indicator of a bigger trend, as companies soup-up hardware to scale out an go virtual?

Perhaps. But there’s little doubt that in 2008 going virtual will bring sweeping changes to IT organizations and the data centers they support. Here are some trends to keep an eye on in the new year:

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MacDonald noted that managing the security in a virtualized environment is a lot like managing yet another operating system. Therefore be sure to keep the hypervisor patched, correctly configured and up to date.

In early 2007, “it’s all about the management,” was the mantra. By now, user enterprises and ISVs have drunk the Kool-Aid. Management options are out there — whether they’re being used properly is unclear, but they are available. In the latter half of 2007, attention moved to performance, integration and usability. In some cases enterprises are growing their own options. In other cases they are partnering. Last week, VMware, which traditionally has been a go-it-alone type of company, announced a partnership with SAP. Expect to see much more of such deal between the virtualization vendors and ISVs, as its less expensive and more efficient for all parties to do it this way.

As for who might be acquiring — watch the hardware side carefully. Theories about Intel, Sun Microsystems and IBM going on shopping sprees have surfaced in the blogosphere in recent months.

5. Microsoft Will Make Waves

Hyper-V will have an enormous and direct impact on the virtualization landscape in 2008. Sure, it isn’t expected to go gold until six months after Windows Server 2008 ships, but does that even matter in user communities that have largely accepted beta to be nearly as good as gold — especially from Microsoft, known for its constant patching and release packs.

More organizations deploy Microsoft than any other operating system. With Hyper-V a standard component, enterprises still on the virtual fence will be able to dip a toe in the water, easily and inexpensively.

This will make VMware and its ilk a tougher sell, especially if Microsoft truly plays nice with other operating systems. The value VMware and other competitors add will need to be enough to justify their price.

Consider last week’s product news from VMware, which unwrapped a new version of Virtual Infrastructure, and Virtual Iron, which took a new version of its software out of the bag. Both vendors emphasized storage, and the evidence of melding is pretty clear.

A recent survey from Xsigo Systems highlighted I/O problems that have been surfacing. As for automation, consider the price HP paid for Opsware this year and how quickly it integrated it into the organization.

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