The Virtualization Room

May 27 2011   5:11PM GMT

In real estate, as in IT, VMware goes big

Alyssa Provazza Alyssa Provazza Profile: Alyssa Provazza

Go big or go home. That’s been VMware’s strategy in the virtualization and cloud markets, so it’s no surprise the company is doing the same in real estate.

VMware is planning a massive expansion at its Palo Alto headquarters, according to the San Jose Mercury News. The company will take over an adjacent 1 million square feet of space in the Stanford Research Park, where pharmaceutical company Roche once called home. The $225 million lease agreement expires in 2045. Can you imagine what cloud will be three decades from now?

With a $30 million renovation by the end of this year, VMware’s campus will grow from 30 to 100 acres and from five to 22 buildings. The expansion will also bring new jobs — as many as 2,500. It could make VMware the largest employer in Palo Alto (outside of Stanford University), where tech and social media companies have come to dominate.

Where does VMware go from here?
By making one of Silicon Valley’s biggest real-estate deals in years, it’s clear that VMware expects to keep growing. The company has nearly 1,000 jobs posted on its website and has projected $3.6 billion in revenue for 2011, up 28% from 2010.

In addition, VMware continues its efforts to move beyond virtualization. The recent acquisition of Shavlik Technologies boosted its security arsenal, and the new Horizon App Manager shows its focus on the applications market — perhaps with an eye towards Microsoft for the 21st century. In an interview at last week’s MIT Sloan CIO Symposium, VMware CIO Mark Egan said apps are where IT adds the most value, so the company sees the importance of optimizing legacy apps and building rich application experiences as opposed to “those ‘60s-era Soviet interfaces.”

Looks like VMware won’t be going home anytime soon.

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