VMW is in a heated competing with GOOG for top tier programmers:
VMware Chases Google in Race for Programming Talent
By Rochelle Garner
Aug. 20 (Bloomberg) -- VMware Inc. is challenging Google Inc. for Silicon Valley's most-coveted prize: computer- programming talent.
VMware, which went public last week and has a market value a seventh of Google's, is wooing code writers with salaries that recall the dot-com heyday of the late 1990s, headhunters and analysts say. The salaries are more than other software companies in the area are offering, said Trip Chowdhry, an analyst at Global Equities Research.
Chowdhry estimated that Palo Alto, California-based VMware is paying $130,000 to $160,000, plus stock options --compensation that only Google can match, he said.
``The whole object of VMware's IPO is to get the best talent, and to hold on to that talent for at least four years,'' Chowdhry said, noting that the stock options vest over time. ``The software industry is about smart people. That's how Google grew, and that's why VMware is offering options.''
VMware shares jumped 76 percent Aug. 14, the first day of trading after a $1.1 billion initial public offering, the biggest technology IPO since Google's in 2004. Hopkinton, Massachusetts- based EMC, the world's largest maker of data-storage computers, remains the majority shareholder, with 86 percent of VMware's stock.
About 500 jobs for software writers are among more than 700 Palo Alto openings posted on VMware's Web site. It will have to persuade candidates to ignore the cachet of Google, whose domination of the Web search market helped send its stock to a record $558.58 in July.
Top Pick
``Google has always been on top of programmers' radar,'' said Glenn Itliong, national account manager of FutureStep, a Los Angeles-based division of Korn/Ferry International that focuses on recruiting midlevel professionals. ``They have the name brand and the reputation.''
Google's size and resources dwarf VMware's. With a market value of $155 billion, Google reported $10.6 billion in revenue for 2006. VMware, valued at $22 billion, had $703.9 million in sales, an 82 percent jump from 2005.
VMware shares rose $1.78, or 3.2 percent, to $57.33 at 4 p.m. in New York Stock Exchange composite trading. They have climbed 98 percent since their IPO. Google's stock fell $2.12 to $497.92 in Nasdaq Stock Market trading and has advanced 8.1 percent this year.
``We are definitely looking for great software engineers,'' Google spokeswoman Sunny Gettinger said. She declined to specify salary figures. ``Our compensation is competitive in the industry.''
Starts to Matter
Sometimes money can make the difference, even among those who are already making six-figure salaries.
``Another $20,000 starts to seem like nothing, but it actually does start to matter,'' said Emil Leong, 34, who has worked in the Valley for more than 10 years.
Leong manages programmers at Success Factors, a startup in San Mateo, after changing jobs less than a year ago. He interviewed with VMware, whose software lets server computers run several operating systems, such as Microsoft Corp.'s Windows, allowing one system to do the work of many machines. Such programs help customers cut expenses to run computer data centers.
``With VMware and virtualization, it's not sexy, but I think it's very cool,'' he said. ``The benefits of virtualization are tangible. Google has many different projects. Sometimes they hire you and they won't even tell you what you're going to work on.''
Preemptive Strike
While VMware dominates its field, growth in the market has drawn competitors. XenSource Inc., a closely held maker of similar programs, agreed last week to be bought by Fort Lauderdale, Florida-based Citrix Systems Inc. for about $500 million. Redmond, Washington-based Microsoft, the world's biggest software maker, also plans to release products with similar features.
VMware's hiring push ``is a preemptive move against XenSource and Microsoft,'' Chowdhry said. ``Virtualization is very hot right now, and a lot of companies are thinking about buying it. That's why VMware is engaged in aggressive hiring, with aggressive compensation, to stave off emerging threats.''
Its worldwide staff almost doubled to more than 3,000 at the end of the first quarter from about 1,800 in 2005, according to company filings. Spokeswoman Amber Rowland declined to comment about recent hiring.
To accommodate its growth, VMware began construction this year on a 460,000-square-foot (43,000-square-meter) campus in Palo Alto. That's an increase from 132,000 square feet of space, according to the Silicon Valley Business Journal.
VMware will use $127 million from its IPO proceeds to pay for the new headquarters, according to a regulatory filing.
``Ask any programmer who's calling them most often, and they'll tell you it's VMware and Google,'' Chowdhry said. ``If you ask them where they want to work, amazingly VMware is in the top two.''
To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net
Last Updated: August 20, 2007 16:21 EDT
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