Hewlett-Packard And Dell: The PC Virtualization Threat

By Douglas A. McIntyre Published Aug 27, 4:33AM EDT

A couple of years ago, no one had heard of virtualization. Now, the leading company in the field, VMWare (VMW) has gone public. And, the service is moving into the core business of HP (HPQ) and Dell (DELL)–the PC.

Virtualization allows multiple operating systems and multiple applications on the same computer at the same time. So far, it is a big business in running servers where enterprises are investing billions of dollars in hardware and virtualization can cut down on the number of servers needed.

But, now the software service is moving in the direction of PCs. And, why not? VMWare has a market cap of nearly $24 billion and is up almost 50% since its recent IPO.

Pano Logic Inc has recently created a small box "that connects to a display and keyboard, and to a computer network," according to The Wall Street Journal. The device means each computer display can go without a processor or storage device.

It would be easy to say that a service like this will take a long time to build market share. But, virtualization has become popular enough with servers that it is beginning to cut into sales volume. It may not be this year, or next, but the process is coming to PCs and that means a real threat to sales at Hewlett-Packard and Dell before the end of this decade.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.