APEX,EMC Corp. will acquire VMware, a privately held software company in a cash transaction valued at approximately $635 million.

VMware’s technology enables multiple operating systems…including Microsoft Windows, Linux and NetWare…to run simultaneously and independently on the same Intel-based server or workstation and move live applications across systems. These “virtual machines” integrate into existing physical infrastructures and management frameworks.

“Customers want help simplifying the management of their IT infrastructures,” said Joe Tucci, EMC President and CEO. “This is more than a storage challenge. Until now, server and storage virtualization have existed as disparate entities. Today, EMC is accelerating the convergence of these two worlds.”

EMC is based in Hopkinton, MA, and has a 300-employee Apex manufacturing plant and 250-employee software shop in Research Triangle Park. VMware will continue to operate in Palo Alto, CA, under Diane Greene, its current president and chief executive officer.

“We’ve been working with the talented VMware team for some time now,” added Tucci, “and we understand why they are considered one of the hottest technology companies anywhere.”

The acquisition of VMware comes after two larger deals made by EMC in the second half of this year. In July, the company announced it would acquire Legato Systems for $1.2 billion, followed by a $1.7 billion deal in October to acquire management software company Documentum Inc.

For the VMware merger, EMC said it expected to take a first-quarter charge of between $15 million and $20 million. The acquisition is expected to dilute first-quarter earnings by a penny per share, have no net affect on 2004 full-year earnings, and add 1 cent per share in 2005.

EMC expects VMware to have revenues of $175 million to $200 million next year after the deal is completed early in the first quarter of 2004.

EMC: www.emc.com