Contrary to broad investor concern, VMware, Inc. VMW seems well-positioned to emerge as the leader in the market for Kubernetes-based, multi-cloud platform solutions, according to Wells Fargo.
The Analyst
Wells Fargo’s Philip Winslow upgrades VMware from Neutral to Outperform, raising the price target from $140 to $180.
The Thesis
Investors have been concerned about the demand for VMware’s virtualization-centric product portfolio being negatively impacted by rising interest in deploying containerized applications into Kubernetes-centric environments, Winslow said in the upgrade note.
He added, however, that the recent acquisitions of Bitnami, Heptio and Pivotal Software Inc PVTL as well as the VMware Tanzu release will position the company to become a leader in the Kubernetes-based, multi-cloud infrastructure market.
There are several complexities of deploying Kubernetes, especially when managing resources across multiple clouds and in-house datacenters.
VMware is now focusing on “creating a bridge for traditional enterprise datacenters, cloud-native platforms, and public cloud environments to coexist and integrate,” Winslow wrote.
The analyst mentioned the company could leverage its reach of 70 million workloads across 300,000+ customers on its vSphere platform.
This could evolve into a native Kubernetes platform for virtual machines and containers and, combined with the introduction of Tanzu Mission Control, could “solidify VMware’s position as “the” abstraction company for the hybrid-/multi-cloud infrastructure stack,” Winslow said.
Price Action
Shares of VMware were up 2.09% to $153.20 at time of publishing on Tuesday.
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