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For VMWare Growth Is Vanishing

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Virtualization pioneer VMware (s VMW) reported first-quarter 2009 earnings that were great, but the days of super growth are over. Revenues were $470.3 million, down sharply from the fourth quarter of 2008. Though a key player in the hot cloud computing market, VMware is facing the prospect of sales that will be either flat or down during the second quarter of 2009. There is commoditization pressure, especially for the base-level hypervisor, which is being given away for free by rivals. Technology Business Research’s senior analyst Allan Krans thinks the way forward for VMware is to move into premium products. VMware yesterday announced a whole soups-to-nuts solution that fits the bill. Whether it sells — that remains to be seen.

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