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VC Predicts Virtual Upheaval

Virtualization startups are increasingly causing systems vendors to reach for the Advil, warns Peter Wagner, managing partner of Accel Partners.

In a column on NDCF, Wagner argues that new technologies are emerging which could potentially “suck the brains” out of incumbent systems vendors (see Building Virtual Empires).

This is a pretty serious threat, Wagner says, because virtualization enables the substitution of commodity systems. This may lead the larger incumbents to either buy the upstarts -- or seek to destory them. EMC Corp. (NYSE: EMC), for example, has already stumped up $635 million for partitioning-trailblazer VMware Inc. (see EMC Buys VMware for $635M).

Partitioning technologies such as VMWare's have already made a splash, although aggregation technologies from the likes of Acopia Networks Inc. and Topspin Communications Inc. are now stealing market share, Wagner asserts. (Wagner's firm, Accel, is an investor in both Acopia and Topspin.)

Topspin's core technology comprises server switches that provide InfiniBand, Ethernet, and Fibre Channel connectivity between servers. These are supported by a range of products including a host channel adapter and server virtualization software.

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