“It’s obvious. The Large Hadron Collider did indeed create a black hole. And it’s currently on Wall St.” – Mark Fletcher
In such times, could VMWare have possibly picked a better tagline for its annual confab than VMworld’s “Virtually anything is possible?” I think not.
Not least because it’s true. The cloud may have been the subtext to the majority of discussions at VMworld, but just in case we thought VMWare was taking the safe course, the virtualization giant announced its intention to produce a new operating system, the Virtual Datacenter OS (VDC-OS).
And you thought the operating system player roster was already set. For shame.
As mentioned, I was looking for VMworld to answer one simple question for me: what next? Well, I think we can consider that one answered. The answers may have been vague in part, and afflicted with a multitude of forward looking statements, but they answered it. And then some.
The question itself stems from the very obvious observation that VMware needed a second act. What is VMware about, as a company? Virtualization, yes, of course. But that’s not enough anymore. Hasn’t been for a year or more now, actually. To the firm’s credit, it’s been able to maintain sufficient differentiation technically speaking to protect one of the more dominant market positions this side of Microsoft circa 1995 or so.
But the accelerating commoditization of the hypervisor and the inexorable incursion of the IT Management players were sure to lower the oxygen content of the room, eventually. On the the latter topic, see the Prosecution’s Exhibit A, this BMC ad which reads in part “It’s time for virtualization to meet its manager.” Where was this shot taken, you might ask? McCarran Airport, Las Vegas. So that everyone arriving for VMworld might get a good, long look.
Put those two together, and the revelation of a Phase 2 at this show was not merely sound planning but an urgent necessity. Or so said the public markets. To be fair to the virtualization vendor, the expectations for VMware’s performance have always seemed to be me generally unreasonable, and while my esteemed former colleague Gordon Haff portrays the ousted CEO Diane Greene as the victim of an EMC power play, I tend to believe that the stock’s performance in the capital markets had at least something to do with it.
Interestingly, however, a few VMware people I spoke with at the show described the current – and ambitious – new direction as one uniquely possible under Maritz; the implication being that Greene would have pursued a more conservative course. I leave it to you to judge the accuracy of such remarks.
Regardless, there can be little debate that the course of action, described above, is anything less than audacious. The cloud direction perhaps less than the operating system news, as the former is nothing short of the writing on the wall for the bulk of the IT industry. Quite literally actually, in VMware’s case, as little cloud bubble graphics were plastered all over the Venetian conference center. VMware’s decision to pursue a partner led approach smacks of pragmatism. The firm, after all, does not possess the hardware portfolio that lends itself to an in house cloud hosting datacenter, as does say IBM or Sun.
Instead, VMware will try to make stars of those most directly threatened by the rise of cloud computing: the service providers. Skeptics will no doubt note that its Service Provider Program has proven somewhat light on actual substance in the past. But Bill Shelton, the Director of Emerging Products and Solutions at VMware, was bullish on the opportunities ahead for the vCloud partners, who are generally seeking the advantages of Google’s infrastructure without the expense of Google’s infrastructure.
Whether or not vCloud can really deliver that isn’t really the question: it obviously cannot. Google, or Amazon, or the other large cloud providers are where they are not just because of the people they hire or the infrastructure those people build but rather economies of scale. To wit, Google can buy machines cheaper than you can, they can hire more economically than you can, and so on.
But neither can AmBayGooglHoo be everything to everyone. Meaning that opportunities remain in the service provider or hosting industries for other players, both small and large. If they have the right software, which VMware obviously believes that it does.
If that sounds like a platform play to you, that’s probably because it is. Reading between the lines, it’s clear that VMware harbors ambitions of being the cloud platform provider rather than a cloud platform provider. Maybe even the cloud platform; they apparently haven’t ruled out building. None of which should be a surprise, given their CEO’s stint with the folks up in Redmond.
Therein lies, at once, the promise and the danger. Because as much as VMware’s operating system messaging has evolved from the days where the virtual appliance was trumpeted as the superior approach to the legacy “general purpose operating system,” their affection for them knows very obvious bounds. To the extent that said affection bleeds, often, into disdain. Or maybe you can offer an interpretation of Maritz’ comment, “The traditional operating system has all but disappeared,” that is complimentary? One of VMware’s partners stated their position for them on a panel, in fact, asserting that virtualization was now the norm, and that operating system concerns, by extension, came second.
VMware, then, might be seen as occupying a position similar to Adobe. Where Adobe technologies such as AIR, Flash, and Flex can very effectively complement the web experience, the ambition is – in some cases – rather to supplant them. Substitute VMware for Adobe and operating systems for the web experience, and the point is made. VMware, like Adobe, wants a bigger share, and a bigger role.
The ultimate proof of which, I’d argue, may be found in the it’s-an-OS-no-it’s-not-an-OS VDC-OS. Can there be a bolder play than to launch an operating system into a market that already features one of the more dominant monopolies the technical world has ever seen and the largest open source project?
Perhaps. But not many, and most would result in a prison sentence of an indeterminate duration.
And so my question is answered: VMware’s ambition, post-virtualization, is to be the next great platform company. What Windows was to the PC, VMware would be for the cloud. We’ve always said within RedMonk that virtualization will change everything, it’s just that no one is quite sure how. VMware seems intent on not waiting for that particular answer, and has instead boldly picked a point on the horizon and redirected towards it at best speed. The house has yet to provide a line for bets on whether they’ll get there or not, but after VMworld no one can argue that they’re standing still.
Personally, I’m hedging until I see the line, but as one who stubbornly believes that operating systems still matter – what with the millions of applications designed to run on them and only supported on them – I think VMware’s casual dismissal of same may well come back to bite them. But enough about me, what do you think?
Disclaimer: Adobe, BMC, IBM, Microsoft and Sun are RedMonk customers, while Amazon, EMC, Google, and VMware are not.