With desktop virtualization becoming the top priority for most organizations, NVIDIA Corp. (NASDAQ: NVDA) and VMware, Inc. (NYSE: VMW) recently announced a strategic alliance to run NVIDIA GRID technology on VMware Horizon Desktop-as-a-Service (DaaS) Platform. The combination provides a visually rewarding graphics experience and low-latency technology, which in turn helps to bridge the gap between virtual and traditional desktop experiences.
VMware Horizon DaaS Infrastructure offers solutions and support to organizations by enabling them to move from a traditional desktop environment to a virtual desktop architecture. Moreover, it provides cloud-based services and delivers high-quality and customized 3D experiences, which facilitate the streaming of videos and other applications on mobile phones and other devices.
NVIDIA GRID is a powerful GPU-based platform that supports corporate virtualized desktops in data centers, cloud gaming services and design software-as-a-service. With this offering, NVIDIA will enrich its virtualization, automation and cloud-based portfolios.
The virtualization process simplifies administration, reduces operating costs, facilitates the optimal utilization of existing IT assets and strengthens security standards.
We believe that the NVIDIA GRID running on VMware's Horizon DaaS platform can maximize user experience by offering high performance computing (HPC) capabilities.
Moreover, the strategic alliance will better equip organizations to handle private and public cloud technology and control business applications securely. As VMware remains one of the leading companies in the virtualization and cloud computing space, we believe that NVIDIA will gain significantly from this alliance.
Furthermore, NVIDIA's innovative product pipeline, including the recently introduced SHIELD and mobile processor Tegra K1, will boost top-line growth, going forward.
Moreover, NVIDIA's strategic alliance with International Business Machines (NYSE: IBM) to produce GPU-accelerated editions of IBM's enterprise software running on its Power technology will strengthen NVIDIA's position versus Intel Corp. (NASDAQ: INTC).
However, the continuous decline in PC sales is a cause of concern for the company's GPU segment. Competition from Intel and QUALCOMM Inc. and higher operating expenses are also expected to hurt profitability in the near term.
NVIDIA currently has a Zacks Rank #3 (Hold).
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