Though I like both on a longer-term basis, there’s clearly risk to Q1 estimates. After a strong Q4, there may be a bit of an air pocket on the other side as budgets are stuck in wait and see mode, back-end loaded or just plain non-existent right now. I would suspect guidance to be somewhat murky. While EMC estimates seem to call for a 12-13% drop, VMW estimates have a very modest 5% drop modeled – I don’t see why VMW wouldn’t drop more than that – spending is being watched closely in corporate America and IT typically receives more than their share of scrutiny. While the pipeline will remain large, I think it may be difficult to get new projects off the ground until there’s a bit more economic stability. VMW projects are by nature new as virtualization is in early adoption stages.
I have no position in either heading into the number and I expect to be looking for excuses to buy on weakness.