Aug. 13 (Bloomberg) -- EMC Corp.'s VMware software business plans to raise as much as $1.1 billion today in what may be the largest technology offering since Google Inc. in 2004, signaling demand remains robust for computer-related companies.

Last week, VMware boosted the high end of its price range by 16 percent. The Palo Alto, California-based maker of programs to manage server computers plans to sell shares for $27 to $29 each, up from the $23 to $25 planned last month.

So far this year, 29 technology companies have raised $3.79 billion on U.S. stock markets, compared with the $2.3 billion from 22 IPOs for all of last year, according to Bloomberg data. Interest in initial public offerings is holding steady as investors seek software developers and Internet companies with expanding sales and profit.

``Given the current flight to quality, investors are migrating to higher-quality IPOs usually defined by strong growth and the quality of management teams,'' said Alex Lehmann, managing director of technology, media and telecom equity capital markets at Jefferies Group Inc. in New York.

The appetite for technology contrasts with broader declines in equities. The Dow Jones Industrial Average has fallen 5.5 percent since reaching a record on July 19, and shares worldwide have tumbled on concern that defaults in U.S. subprime mortgages and a credit crunch may trim economic growth and earnings.

Initial share sales have remained relatively stable. Of the 15 offerings priced in the past two weeks, two sold below the expected price range. Three deals have been postponed or withdrawn, however, according to data compiled by Bloomberg.

Technology IPOs

Money managers are also on the lookout for new technology companies after $400 billion of mergers and acquisitions since the beginning of 2006, Lehmann said.

EMC, the world's largest maker of data-storage computers and software, bought VMware in 2004 for $635 million. In February, Hopkinton, Massachusetts-based EMC announced plans to sell about 10 percent of VMware as newly issued shares in an IPO. EMC will remain VMware's majority shareholder.

The shares will trade on the New York Stock Exchange under the ticker ``VMW.'' EMC spokeswoman Lesley Ogrodnick declined to comment on the offering.

VMware makes programs that let server computers run several operating systems at the same time. One machine, for example, may be able to run Microsoft Corp.'s Windows and the Linux operating system, allowing it to do the work of many ``virtual'' machines.

Microsoft Competition

VMware rejected an earlier offer to be bought by Microsoft, VMware Chief Executive Officer Diane Greene said after the agreement with EMC was announced in December 2003. Redmond, Washington-based Microsoft bought programs from VMware competitor Connectix Corp. in February 2003.

Shares of EMC rose $1.33, or 7.5 percent, to $19.05 at 4:20 p.m. in New York Stock Exchange composite trading. They have gained 44 percent this year.

Part of the attraction of VMware is its limited competition, analysts said.

``There's no competitor of any scale you can point to,'' said Brenon Daly at 451 Group, a market researcher in San Francisco. ``It's basically had the market to itself, and it's reflected in the revenues.''

VMware's net income rose 29 percent to $85.9 million in 2006, while sales gained 82 percent to $703.9 million, according to regulatory filings. In the first quarter of this year, profit doubled to $41.1 million while sales also doubled to $258.7 million.

Intel, Cisco

Last month, Intel Corp., the world's biggest computer-chip maker, agreed to invest $218.5 million for a 2.5 percent stake in VMware. Cisco Systems Inc., the biggest maker of computer- networking equipment, will buy $150 million of VMware shares from EMC for a 1.6 percent holding. Both Cisco and Intel have partnerships with VMware.

``We think Cisco and Intel are very strategic alliances,'' said Jeff Donlon, managing director of technology research at Manning & Napier Advisors Inc. in Fairport, New York, which owns 4.8 million EMC shares. ``This tie-in with these technology behemoths will facilitate VMware's competitive advantage.''

The biggest threat is from Microsoft. The world's largest software maker may include a competing product with its other offerings, Donlon said.

VMware was co-founded in 1998 by CEO Greene and her husband Mendel Rosenblum, who is chief scientist. The technology for VMware's products stems from research by Rosenblum at Stanford University, where he is an associate professor in the Computer Science department, according to VMware's Web site.

Proceeds from the sale will be used to repay $350 million in debt owed to EMC, according to a regulatory filing. Another $127 million will be used to purchase VMware's headquarters. The remainder will be put back into the business.

The sale is being managed by Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Credit Suisse Group, Merrill Lynch & Co. and Deutsche Bank AG.

To contact the reporters on this story: Elizabeth Hester in New York at ehester@bloomberg.net; Melita Marie Garza in New York at mgarza4@bloomberg.net.

Last Updated: August 13, 2007 16:32 EDT