VMware has reached a deal to buy B-hive Networks, an application performance management vendor in San Mateo, California, and Herzliya, Israel, for an undisclosed sum, the company said Wednesday. The deal is set to close in the third quarter.

In addition, B-hive's research team will serve as the core of VMware's new Israel development lab, the statement said.

B-hive's Conductor product can monitor the behavior and performance of applications running in VMware virtual machines. If a problem crops up, the software works in concert with VMware to push additional resources to the program in question, such as by creating an additional virtual instance of it, VMware said in a statement.

The announcement "changes the dynamics of the virtualization market in two very important and fundamental ways," according to Bernd Harzog, CEO of APM Experts, a consultancy focused on application performance management.

"It is, at least for the VMware platform, a 'game over' for many of the monitoring startups that were focused upon being 'the' monitoring vendor for VMware as their business plan," he wrote in a blog post Wednesday.

In addition, the move "says to customers that VMware understands that customers must be able to measure and ensure acceptable performance of virtualized applications in order to push virtualization beyond the 'low hanging fruit' stage that currently exists," he wrote.

Rival virtualization vendors such as Microsoft and Citrix -- the latter of which B-Hive has already integrated with -- will likely follow VMware's move, Bernd predicted: "There is little likelihood of a long term independent market for application performance management and end user experience management for virtualized systems, as this will likely turn into war fought on the basis of who is building out their portfolio most effectively via acquisition."