Dan's Take

Is VMware a One-Trick Pony?

Dan responds to questions about the virtualization giant's viability going forward.

• By Dan Kusnetzky
• 05/11/2015

Recently I read comments made by Wikibon's Stu Miniman in an interesting interview published by my longtime friend, Paul Gillin. (Paul, you'll notice I didn't say "old" friend. You're welcome.)

Only Virtual Machines?
Miniman discussed the industry's concerns that VMware might be a one-trick pony. This view is based on the belief that VMware is mostly a virtual machine (VM) software company focused on providing tools to support virtual servers. The concern stems from the fact that as an increasing number of industry standard, x86-based workloads are now running in virtual environments, that VMware's growth will slow.

Miniman then went on to point out that, in his view, the majority of VMs are executing Windows workloads and that Microsoft Hyper-V and Microsoft Azure are likely to extract quite a number of those workloads from VMware's world and bring them back into Microsoft's.

He also commented that another virtual processing software category, OS virtualization and partitioning (specifically in the form of Docker containers), is expected to capture a few more of those workloads, once again taking them out of the VMware world.

Checking All the Boxes
I can't fault Miniman's analysis. VMware is facing challenges from suppliers in a number of different quarters. The company, however, has acquired or developed technology in nearly all segments of the virtualization software market to both increase its integration and control of current customer accounts, and to seek out other customers.

Furthermore, VMware has been repackaging its virtualization technology to address both the on-premises, off-premises and hybrid cloud computing environments. It references this technology under the banner of the software-defined datacenter (SDDC). While its growth is likely to slow in its core VM software market, the company is hoping that revenues from other virtualization markets will grow and allow the company to continue to be profitable.

If you use the Kusnetzky Group model of virtualization as a guide, we can clearly see that VMware now offers products that address the needs for:

• Access, application, processing, network and storage virtualization.
• Security and management offerings that both protect and manage those products.
• Middleware and development technology to make application development and deployment simpler.
• Projects to create a Linux OS (Project Photon) and an OS virtualization and partitioning project to address the needs for Containers (Project Lightwave).

But VMware isn't sitting still while others move in on its core markets. It's doing its best to build on its current successes and move into new, but related, markets. It's also working on building a Microsoft-like set of linked products; so, once a company selects a single VMware product, it's simply easier to purchase another VMware product in a related category, rather than trying to completely integrate another vendor's product.

Will the combination of reaching out into adjacent markets, linking its technology together into "Fortress VMware" and trying to dominate on-premises, off-premises and hybrid computing  models win over the competition? That's not yet clear. One thing that is clear is that VMware continues to innovate, acquire and integrate to build an ever stronger story.