There was quite a bit of news coming out of VMware this week. First they announced a new virtual server management bundle product priced for SMBs at just $1,500. This is sort of the next step in VMware’s SMB strategy. Last year it made VMware Server, their entry level server virtualization product available for free downloads on their web site. Now they’re offering cheap products that help SMBs manage those virtual servers. The VMware executive that I spoke to, Ben Matheson, told me that the company would be announcing more SMB products over the next 6 months, but he was careful not to tell me what those announcements might be. So I’m left to speculate. Will some of the more advanced technologies, such as their advanced virtual machine migration tool VMotion, become available at an SMB price? We’ll have to wait and see.

So on the heels of their SMB announcement, VMware’s parent company EMC Corp. announced plans to sell off 10% of VMware in an IPO this summer. Wall Street analysts have been calling on EMC to sell off VMware, because VMware’s revenues are growing at an astonishing rate (83% last year alone). But that robust growth isn’t translating into higher stock prices. EMC’s overall stock performance has been stagnant. There was virtually no year-to-year growth in EMC’s stock in 2006. In fact, its stock has dropped since the VMware acquisition. Selling off VMware would send some cash to shareholders and allow VMware’s stock to soar. But EMC says it has no intention of selling off the rest of its stake in VMware. This is just an effort to give shareholders some return on their investment and to give VMware some capital and perhaps some stock options to help with employee recruitment and retention. In any case, VMware’s revenue growth makes it a good target for investors when the IPO hits this summer.