VMware in talks to buy Israeli SaaS co Digital Fuel

The $80-90 million acquisition, if it materializes, will be VMware's second in Israel.

Sources inform ''Globes'' that VMware Inc. (NYSE: VMW) is about to acquire Digital Fuel Ltd. for $80-90 million. The acquisition, if it materializes, will be VMware's second acquisition in Israel and will boost the operations of its local development center.

VMware and Digital Fuel declined to comment on the report.

Digital Fuel is a veteran developer of SaaS IT financial management solutions. CEO Israel Dancziger, CTO Gilad Raz, VP engineering Yakov Kogan, and Benny Lehman who died in 2004, founded the company in 2000. The company has a large number of investors, including Benchmark Capital, Israel Seed Partners, Apax Partners, Sigma Capital, and Check Point Software Technologies Ltd. (Nasdaq: CHKP) founder Shlomo Kramer. Digital Fuel has raised $45 million to date.

Digital Fuel develops business service management (BSM) solutions. The company is launching a service level agreement and quality of service solutions for finances. A few years ago, the company changed its strategy to become a software as a service (SaaS) company to help companies estimate the value of IT financial management from computer infrastructures.

The changes underway in computing - the switch to calculations based on more unequivocal financial and operating variables has become especially important. One of the drivers of this change is the switch of some computing infrastructures to a virtual environment, i.e. the ability to run several computer systems, such as memory, processing, and communications using the physical resources of one computer, and a range of operating systems on a virtual infrastructure, regardless of the physical computer.

The acquisition of Digital Fuel will add 150 employees to VMware's workforce, a third of them at Digital Fuel's Israeli development center. The acquisition could therefore increase the workforce at VMware's Israeli development center by over 50%.

Published by Globes [online], Israel business news - www.globes-online.com - on June 9, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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