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NSX & Cloud Native – The Developer Orientated Next Act for VMware

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We had the opportunity to attend VMWorld Europe in Barcelona in October. The event was timely given the recent announcement of the VMware and Amazon partnership, and gave us the opportunity to talk with members of the VMware team and Amazon representatives about the overall direction of their newly minted relationships.

As of now this is all still a bit fuzzy, but there will be joint Go-To-Market initiatives and so forth. VMware were clear that the partnership is in response to customer demand. We will be watching the coming year with interest.

VMware CEO, Pat Gelsinger, joined us for a Q&A session, and discussed some of the key directions and strategic threats for the business. Among these he specifically called out “Developer Orientated IT” as a significant change in the technology landscape, something that we here at RedMonk have been highlighting for a long, long time.

There is a lot to unpack from the event, but given this “Developer Orientated IT” comment we will focus on Cloud Native and NSX.

Cloud Native & VMware

Last year we noted the position which VMware holds as an enterprise on-ramp for containers, and the wider cloud native ecosystem. As we watch companies settle into a couple of distinct groupings in terms of container adoption, VMware finds itself in an interesting position. Early adopters were always likely to jump for the newest projects and products, but for more conservative organisations, many of whom make up the VMware customer base, most container projects are still at a pretty small scale.

This leads to a distinct softly, softly approach from VMware – they are gradually pulling together all the required components to sit in various parts of the market, but are patiently waiting for customer demand to increase as well. For existing, or more conservative customers, they offer their vSphere Integrated Containers, while the core of the next generation of products will be VMware Photon. We also had the announcement of Kubernetes as a Service on Photon, which sits alongside the previously announced Cloud Foundry/Photon integration.

More interestingly during discussions it was highlighted that Photon is becoming a core part of various products at VMware, so the investments in this space will continue for now – no matter what the customer adoption level is in the short term.

At the same time, you have NSX, which we will return to again later, being integrated directly into their overall approach, with Kubernetes, Docker and Cloud Foundry integration points. They are also investing in tools such as Harbor, an enterprise container registry, which is also distributed with Photon. All of this is a packaging exercise, but it is a packaging exercise that matters.

These integrations are key to understanding where Photon is focused from a strategic perspective. VMware are happy to take part in the communities building the various orchestration engines and focus on simple to use integrations. They are happy to let other vendors fight it out among each other for different sections of the orchestration market, but their interest is in controlling the layer below, leveraging their existing control of the hypervisor, and augmenting their existing offerings with additional storage and network functionality.

To my mind you could call this strategy developer focused, but with an easy fit for the traditional VMware ops customer base.

NSX – The Key Component

The NSX business for VMware, which is derived from the 2012 acquisition of Nicira, continues to grow at a reasonable pace. For many enterprises it is still very early days for Software Defined Networking (SDN), but there is a growing awareness at a CIO level of how SDN can be used in a multitude of different ways from security and compliance, to self-service for developers and so forth leveraging approaches such as micro-segmentation. More importantly there is an awareness of just how important the network is. Sun were not wrong with their marketing phrase of “The Network is the Computer”.

With the acquisition of Arkin earlier this year VMware also gained some extremely powerful analytics tools to use with NSX. While operations focused, the opportunities for developers to use this toolset, particularly in the new world of micro-services, is extremely interesting.

I really can’t emphasise strongly enough how key NSX is as part of act two for VMware. As we move faster and faster into a world of cloud native applications and distributed computing on a developer front, and distributed applications and edge work (in terms of access patterns for applications and how the future of work is going to change for employees in many enterprises) the functionality provided by software such as NSX will be key. Where VMware have a footprint in an enterprise they have an opportunity to introduce NSX into the account.

Culture, Culture and Digital Transformation

During the event we also had the opportunity to talk with several VMware customers, including Otto Group. While most of that conversation is NDA, we specifically asked about culture, and how executives enabled and dealt with change.

The answer here was wonderfully refreshing. We frequently raise the need for people to be allowed to fail, and far more importantly for management, all the way to the C-Suite and the board to understand and support this. When you hear about “digital transformation”, it is not truly possible without buy in from all layers of the organisation and this permission to fail. This is all part of the digital literacy of an organisation.

Otto Group are not just allowing people to fail, they are celebrating failure and allowing people to learn. When you have board members hosting event called ‘Fuck Up Night’ (in german, google translate version here) and talking to their teams about where things went wrong, and what went right – that is truly a company changing its culture.

Disclaimer: VMware paid for my T&E. Amazon, Docker, Pivotal and the Cloud Foundry Foundation are current RedMonk clients.

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