It's definitely an ugly day for shareholders of VMware (NYSE: VMW), with the stock down more than 30%. Even so, the company is still growing at a rapid clip because of its virtualization technology, which essentially squeezes more firepower from servers and other tech resources.
In fact, a variety of players are moving into the space. Some of the usual suspects include Microsoft (NASDAQ: MSFT) and Oracle (NASDAQ: ORCL).
But, of course, there are also some scrappy startups, such as Virtual Iron.
The company has announced a $20 million round of venture capital. The investors include: Highland Capital Partners, Matrix Partners, Goldman Sachs (NYSE: GS), Intel Capital (NASDAQ: INTC) and SAP Ventures (NYSE: SAP).
"We raised the capital to take advantage of the big market opportunity," said Ed Walsh, CEO of Virtual Iron, in an interview with me. "So we'll be spending on sales and marketing."
OK, so how will Virtual Iron compete against the mighty VMware?
Walsh says that his company's pricing model is fairly disruptive. What's more, the technology is solid, allowing for dynamic workload management, fault tolerance, and disaster recovery, and already has a footprint of over 1,450 deployments.
"Our solution is also easy to use," said Walsh. "This is a big difference from VMware, which is complex and proprietary technology."
Tom Taulli is the author of various books, including The Complete M&A Handbook. He also operates DealProfiles.com.
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