In-Depth
VMware Is on Track To Dominate the Cloud
The company is charging full-speed into the cloud -- and showing it has what it takes to dominate an industry.
Icon.
Juggernaut.
Brobdingnagian.
VMware Inc. could answer to all these monikers -- it has gotten so good at virtualization that the company's overmatched competitors actually hold the technology against it. It's so far ahead in server virtualization that it's looking to reproduce its dominance in places like Brazil and Asia, where there's ever-more low-hanging fruit to harvest. If it seems like there's something dark or menacing about VMware, you must be competing with it.
Microsoft loves to take shots at the company; VMware shrugs them off like flies. Citrix Systems Inc. tries to bludgeon VMware with its virtual application and desktop expertise; VMware deflects the blows and stays the course. Strong, stoic, self-contained, the company is like China, ignoring the critics, picking its spots and always advancing.
Understand this: VMware is Paul Maritz's company. No doubt his four co-presidents are very talented, but who came up with the co-presidential idea, anyway? Ironically, Citrix chief Mark Templeton thinks it was Maritz -- simply because he can't believe that anyone else there has the authority to call those kinds of shots.
Once Maritz, a former Microsoft executive VP, took over the reins in July 2008, he inventoried his assets, assessed the industry and led VMware on a server virtualization tear that put the company in a dominant position it still maintains today. Along the way, he read the tea leaves again and decided to bet the company on cloud computing -- along with a good dose of desktop virtualization.
With cloud, there's no greenfield run to glory, but there is a well-defined roadmap -- and, as VMware is fond of saying, it's taking its customers on a journey. At this point in that journey, VMware has gone from mowing down the virtualization market to seeding and feeding the cloud market, which Forrester Research Inc. says will grow from $40.7 billion in 2011 to $241 billion by 2020.
As expected, financial reports for the company have been consistently strong across the board, as demonstrated by Q2 2011 results showing revenues of $921 million, an increase of 37 percent from Q2 2010. In addition, Q2 license revenues were $465 million, up 44 percent from the same period a year ago, and U.S. revenues grew 35 percent to $450 million.
Learn As You Go
As vice president and general manager of Virtualization and Cloud Platforms at VMware, Raghu Raghuram is intimately familiar with the company's strategic and tactical goals in these two key areas. He says that during the past year, most enterprises have been enabling their IT infrastructures with the economic and operational characteristics of clouds by renting capacity from multiple services providers and tying them together. This Infrastructure as a Service (IaaS) approach represents the first step toward the realization of cloud.
"Practically every enterprise is following our strategies to get to that vision of hybrid cloud computing, starting with a private cloud and then building with a public cloud," Raghuram says. "Customers today are about 30 percent to 40 percent virtualized with their x86 workloads, and they're rapidly proceeding to virtualize the rest."
Cloud services providers are essential elements of the VMware cloud strategy, and a year ago, the company was working with approximately 1,000 that were building infrastructure clouds. Today, that amount has climbed to some 2,500. Raghuram cites new cloud offerings from large integrators such as Verizon and Computer Sciences Corp. (CSC) -- along with the success of Amazon Web Services LLC -- as signs that VMware is gaining traction with its plans.
So yes, VMware is gaining traction, but how much? It's true that a growing number of VMware customers have transitioned their IT infrastructures into virtualized private cloud environments, or are moving in that direction. Despite this growing migration, however, the feeling in the market is that cloud is still about half on hold, and while there are many happy VMware customers that may be ahead of the curve, they're still moving forward with caution.
According to Mark Bowker, senior analyst at Milford, Mass.-based Enterprise Strategy Group, that caution means those customers remain focused on cost and consolidation -- and even though they're happy with their VMware investments, he says that VMware has a "giant customer base" that needs to get on the VMware roadmap. This means moving them beyond the cost and consolidation phase.
As with any disruptive technology, there are early adopters out there, and Bowker says there's a "large population" of VMware customers that are assembling virtualized IT infrastructures with hundreds of virtual machines (VMs) running in what they refer to as private clouds. He adds, however, that while many of these users may be progressive, they're not cutting-edge.
"When it comes to on-demand, self-service, rapid elasticity -- being able to scale in and out -- and being able to measure the service, customers are light-years away for most of their cases in virtualized environments at this point," he declares.
A year ago, Raghuram acknowledged that despite VMware's progress, "We still have a long way to go on converting our customers over to running their datacenters as a private cloud." Reminded of that comment, Raghuram says it was made before VMware rolled out vCloud Director, which lets customers take their vSphere-based infrastructure deployments and turn them into private clouds. Claiming the product has had the "fastest ramp of any we've ever introduced," he then steps back from the hype and says: "I'd say, in the larger scheme of things, we're still in the very early days. We have several hundred deployments of vCloud Director already underway within enterprises as well as services providers."
Bowker views vCloud Director as a bridge that enables VMware administrators to look at their current virtualization investments with an eye toward connecting them with third parties such as services providers, who can typically handle their test and development workloads. He says that while services providers are excited by such opportunities because they translate into new business, they must still be careful about over-spending on infrastructure investments that may not provide paybacks.
Cloud-Based Application Development
The next big step in the VMware cloud odyssey is cloud-based application development, and the company is applying its most innovative thinking to this critical area in the form of its recently released beta version of Cloud Foundry, which VMware claims is the world's first open Platform as a Service (PaaS). Cloud Foundry was created for cloud environments and is delivered as a service from enterprise datacenters and public cloud services providers.
It provides a platform for building, deploying and running cloud apps using Spring for Java developers, Rails and Sinatra for Ruby developers, Node.js and other Java Virtual Machine (JVM) frameworks, including Grails. Cloud Foundry is available as CloudFoundry.com, a complete hosted PaaS environment; CloudFoundry.org, an open source project in which developers and community members can collaborate and contribute to the project; and Cloud Foundry Micro Cloud, which is a complete instance of the Cloud Foundry project created for developers.
Raghuram notes that this product does not require a vSphere-based infrastructure and runs on any cloud, such as those from Amazon Web Services. Regarding its open source nature, he notes that the open source community has developed Cloud Foundry support for Python and other technologies. VMware also recently introduced version 5 of its Java-oriented vFabric application platform, which is a setup for application infrastructure middleware that comprises some of the assets VMware acquired when it bought SpringSource. VMware says vFabric "defines the future of enterprise Java for cloud and virtualized execution environments."
Bowker finds Cloud Foundry to be "super interesting" because first, in his opinion, PaaS is an ideal environment for developers who are modernizing or re-architecting apps, and second, he's fascinated by the challenges VMware faces in its internal efforts to win the hearts and minds of developers -- especially Java developers. In this cross-cultural quest, the mainstream IT datacenter mentality clashes with the more free-spirited approach taken by application development types that came to VMware with the SpringSource acquisition.
"So to me, there's a whole additional community that VMware really has to focus on nurturing," Bowker notes. "There's a lot of community development work, and working with a completely different set of users inside of IT."
vSphere 5 Does Not Disappoint
Succinctly stated, vSphere 5 was worth the wait. Features such as the ability to run VMs that are four times more powerful than previous versions, a new high availability (HA) architecture to protect against unplanned downtime, and three new automation advancements for Intelligent Policy Management were all well received.
However, the vSphere pricing plan, which was developed to financially protect services providers and bring them into a more typical cloud pricing environment, caused a controversy. This stemmed from previous licensing -- which was tied directly to the number of CPU cores and the amount of physical memory per server -- being replaced with a single, virtualization-based entitlement: the amount of memory configured to a VM, called vRAM. In order to head off the controversy, VMware adjusted the pricing plan by increasing vRAM entitlements for all vSphere additions (see "vSphere 5 Pricing Altered Due to Popular Demand").
Bowker plays down the controversy, advising customers to use the tools available to help them to understand their current and future vRAM needs. This will help them determine the possible impact that vSphere 5 migration will have on their licensing and support agreements.
"Savvy IT organizations will take advantage of this change and see it as an onramp to alternative consumption models; it may now be easier to compare private clouds with public cloud infrastructures and help organizations determine how to get the most out of both options," he says.
In order to access the bigger workloads that vSphere can handle, Bowker says customers must take one very important step: "If you want to take advantage of everything vSphere offers, you need to move to ESXi." Toward that end, Raghuram says VMware has expended a "tremendous amount of time" educating users on how they can do everything with the free ESXi that they used to do with ESX.
Also included in the vSphere 5 announcement is what Raghuram calls the industry's first cloud infrastructure suite, which he says provides more than a virtualization platform alone can offer to customers who want to optimize their private or public cloud experiences. Powered by vSphere 5, it includes:
- vCloud Director: Provides the self-service and automated placement of VMs in the datacenter
- vShield: Provides the security required in multitenant environments
- vCenter: Provides a management operations stack
- Site Recovery Manager: Handles disaster recovery when a cloud goes down
Bowker's take on the cloud infrastructure suite is that many VMware customers will buy into it because they basically believe in the company and are comfortable with their investments in it -- which at first sounds positive for VMware, but then raises a recurring, nettlesome problem: Many customers are not yet at this point of sophistication and commitment.
As Bowker puts it, the challenge for VMware is continuing to advance its customers along a high-level path, and not fall into a trap where virtualization becomes a holding pattern for apps -- as could be the case if a company re-architects its applications for Microsoft Windows Azure as opposed to traditional x86 VMs.
"If IT continues to say that server virtualization is its cost containment and consolidation strategy, there are bounds to a lot of these management tools and security features that will prevent them from having a high-priority requirement -- unless VMware can really help customers along and teach them about these tools, [and] where they are in the maturity of their implementations, and short- and long-term benefits," Bowker says.
Too Much Focus on Virtualization?
Microsoft has been hammering away at VMware by saying it's hard to compare its System Center stack to the vCenter stack because the Microsoft stack does so much more, while the vCenter stack is more focused on virtualization and virtual infrastructures than it is on building links within those virtualized environments.
Raghuram says that was true in the past, when VMware managed only VMware environments. Now, however, he says the company has significantly expanded its management portfolio to include app-management packages for physical and virtual environments, as well as products such as vCenter Configuration Manager, which works across physical and virtual environments and provides all types of auditing reporting capabilities that are "non-existent" in System Center.
He also cites the recent introduction of vCenter Operations Manager, which comes in standard and enterprise versions, and provides health and performance monitoring along with proactive alerting to preclude problems before they can occur. According to Raghuram, the enterprise version can be used to manage multifarious infrastructures, including server, storage and networks, and takes feeds from HP OpenView and even System Center Operations Manager. As he puts it, vCenter Operations Manager is a "super center" of what System Center does.
"Microsoft is choosing to take a very narrow view -- perhaps a self-serving view -- of Virtual Center when they think about the Virtual Center Server, which is the core product in the management offering," Raghuram says. "What surrounds it is a set of expanded management offerings that go way beyond what Microsoft does."
Feeling the Desktop Virtualization Heat
The rapidly evolving world of desktop virtualization is one of those rare areas where VMware has actually been feeling serious competitive heat. VMware (with View) and Citrix (with XenDesktop) have been fighting toe-to-toe for the better part of three years, during which time they've criticized, condemned, and occasionally distorted each other's products and positions. Currently, in the opinions of most industry analysts, Citrix is leading the market, based on its technical expertise and vast experience with application virtualization.
Raghuram disagrees with that assessment, calling the market immature and saying the leading analyst firms refer to the competition between VMware and Citrix as "neck-and-neck." In his opinion Citrix has done a very good -- and obfuscatory -- job of blurring the distinction between XenApp and XenDesktop.
"It's very hard to tell, because of how Citrix has structured the XenApp and XenDesktop products, whether XenApp is being used -- which involves Presentation Server -- or XenDesktop is being used. That's just the way they've gone to market," he notes.
When Raghuram is asked about Citrix having more success than VMware in large enterprise accounts, he again says that Citrix was winning those accounts by "repurposing" XenApp technology at a time when View was still new to the market.
Device Delivery Ubiquity
Delivering an enterprise presence to heterogeneous mobile devices such as smartphones, tablets and laptops is another high-growth area that will be increasingly contested in the near future, and Citrix is pushing hard to highlight its capabilities now -- most notably Citrix Receiver and the bare-metal XenClient hypervisor. Raghuram says VMware is addressing the challenges of delivering Windows desktops to this new array of mobile devices from several angles. Those include supporting Apple iOS devices, working on Android compatibility and using View to bring "older-style" OSes such as Linux into the mix. He further notes that many VMware ecosystem partners are also developing enhanced mobile capabilities.
Looking forward into a post-Windows world, Raghuram speculates on what kind of ubiquitous, device-independent workspace will provide users with anytime, anywhere access to their applications and data. He points to Project Horizon as the answer. Introduced earlier this year, it's the VMware single-sign-on portal for Software as a Service (SaaS) applications, and will be developed as a product suite. In May, the company released the first of those suite offerings, Horizon App Manager, a centralized authentication solution for accessing SaaS applications.
Still the One
It's easy and good to put a dominant market leader like VMware in the spotlight, because no company is perfect -- even one led by someone of Paul Maritz's stature. Mistakes can be made; QA can slip; good can become bad. At this point, there are no such damaging developments in evidence; rather, the company seems stronger than ever as it continues to lead the market on a tunnel-vision track toward the future of cloud. VMware is hitting on all cylinders, and that makes it very tough to haul down from behind.