Vates, a technology company based in Grenoble, France, has secured 30 million euros in new funding to challenge VMware, a major player in the virtualization sector. Virtualization allows computers to run multiple operating systems or applications simultaneously, often used in data centers and cloud computing. The funding comes from two sources: the Growth fund of Iris and Bpifrance through its Large Venture fund. Vates is targeting businesses that are unhappy with VMware, especially after VMware was acquired by Broadcom in 2023 and faced criticism for raising prices. Vates offers an open-source alternative to VMware’s proprietary software, including the XCP-ng hypervisor and Xen Orchestra, an orchestration tool for managing virtual machines. Olivier Lambert, co-founder and CEO of Vates, explained that the open-source nature of their platform gives customers more control and reduces the risk of being locked into a single vendor’s ecosystem. The company’s primary revenue comes from support subscriptions, with annual fees ranging from 1,000 to 1,800 euros per server in the euro zone, depending on the level of service. For businesses needing more specialized assistance, Vates provides internal consulting services. Vates is positioning itself to benefit from Europe’s growing emphasis on digital sovereignty, which refers to the continent’s push to reduce reliance on foreign technology and maintain control over its digital infrastructure. One example of this is Bull, a French IT company, which is using Vates' technology to operate its new plant in Angers. The company plans to invest heavily in research and development, especially in artificial intelligence, to improve its virtualization solutions. Lambert noted that AI has significantly sped up the development process, allowing the company to bring new features to market more quickly. Vates aims to expand its presence in North America and its main European markets, where it already generates nearly half of its revenue. It is also working to build a stronger network of partners and integrators to support its growth. The original co-founders remain the majority shareholders, and the new investment from Bpifrance and Iris is expected to help the company better organize its operations and compete with American technology firms. Founded in 2012, Vates has grown from a small team to 150 employees in just four years. The company has been self-funded and profitable since 2016, with revenue increasing by more than 65% in 2025 alone. The new funds will help the company maintain its momentum and solidify its position after the market impact of VMware’s acquisition by Broadcom. The long-term goal is to become one of the top five virtualization solution providers globally and achieve a leading position in Europe.