Take Five With Tom Fenton
Here's what lies ahead for the once-invincible virtualization software company.
It's not a cliché to say that VMware is at a crossroads. Having dumped co-founder and CEO Diane Greene (see "Greene out, Maritz in at VMware
"), the virtualization behemoth faces numerous challenges from within and without. Here are the five biggest obstacles VMware has to knock down to remain king of the hill.
Take 1 Price. Ask 100 VMware customers what their greatest complaints about the company are, and 99 of them are likely to list price at the top. VMware recently took a step in the right direction when it made ESXi free, but there's more to do. It's still the most expensive solution out there-by a mile.
Take 2 The Citrix/Microsoft mashup. These two software titans, always close, have nearly become Siamese twins when it comes to virtualization, and for one purpose: to overthrow VMware. With Microsoft's upcoming management tool, System Center Virtual Machine Manager 2008, and Citrix's heavy emphasis on virtual desktop infrastructure with XenDesktop, they combine for a formidable spate of offerings.
Take 3 Under new management. Paul Maritz certainly has the bona fides to take over at the helm, but a change of this magnitude is difficult for any company-big or small. Diane Greene and her husband, Chief Scientist Dr. Mendel Rosenblum, built VMware from a little-noticed startup to the industry leader. Uncertainty follows these kinds of changes, especially because Greene-by all indications-was forced out, rather than gracefully riding off into the sunset, a la Bill Gates.
Take 4 EMC. When Greene was replaced, rumors abounded about her strained relationship with Joe Tucci, CEO of parent company EMC, and about how Greene and VMware never really integrated with the storage giant. EMC bought Maritz's startup company last February, making one wonder if the purpose of the acquisition was to get Maritz on board to take Greene's place. Whether there's any truth to that or not, it's clear that EMC wants more control over VMware. What changes will the parent demand of the child?
Take 5 The IPO. Although VMware's initial public offering last summer was nothing less than spectacular and historic, the stock price has since come back to earth. Now VMware has to deal with the drawbacks of being a public company, namely insane pressure to increase profits. What happens if ever-more-aggressive financial goals aren't met? Layoffs? More management turnover? Will VMware continue to innovate, even if it means potentially long research and development investments that don't immediately pay off? There are a lot of questions to answer.
What other threats do you think VMware faces? E-mail me your thoughts -- I'm at [email protected].
Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.