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Enterprise Software - Friday, May 30, 2008

VMWare Buys Israel's B-hive

VMware (NYSE: VMW) is buying Israeli's B-hive Networks for what has been put at several tens of millions of dollars.

B-hive monitors an application from the network, measuring the response time between a user action and an application response. Such monitoring watches the application from an end-user point of view instead of a systems management point of view, with emphasis on responsiveness.

Index partner and Venrock co-led the $7 million series A investment in B-hive.

Index gets in touch to say that the deal is significant for the following reasons:

+ Along with the recent acquisition of FilesX by IBM, the deal signals that the M&A market remains strong for advanced technologies with a capacity to alter the economics of the data center.

+ B-hive's technology builds a bridge between virtualization (which enables more compact, greener data centers) and automation (which leads to significant cost reduction and service level improvement).

Index continues to travel to Israel for portfolio investments that include Zend, Evolven and Worklight.

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