VMware pioneered server virtualization and has dominated the market for a decade. Many observers, especially at first, couldn’t understand how an email vendor or an online backup service would fit into the company’s portfolio. But over time, the point of these VMware acquisitions became clear: VMware sees its infrastructure business as the foundation for what it calls “the new way to work,” which involves social, collaborative applications accessible from multiple devices.
The question around these VMware acquisitions has now gone from “What’s the point?” to “Will they succeed?” Members of our Server Virtualization Advisory Board weigh in on these VMware acquisitions as they answer this question:
Will VMware’s application play be successful, and how will it affect the company in the virtualization market?
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VMware is the clear leader in all things infrastructure virtualization, and rather than rest on their laurels, they have acquired several niche companies and developed some interesting applications that move them into the enterprise cloud and collaboration markets. The application market is where you own the customer, and it will prove to be more lucrative than the infrastructure virtualization market in the long run for VMware.
The question will be how VMware merges all of these companies and applications into a clear, concise product or message so customers understand the value of their solutions. The new releases of vSphere and View, combined with any new accusations coming over the next few months, are sure to strengthen VMware’s position as the leader in virtualization market -- and maybe someday the leader in all things cloud. There are many worthy competitors in this cloud space, and they are all clamoring for the next great cloud app. It will be interesting to see how it plays out over the coming years, but VMware is in a solid position to have success.
With the acquisition of more and more enterprise applications, it seems that VMware is moving away from its traditional stance as a vendor that specializes in virtualization products and towards the direction of a solutions provider.
With the introduction of Horizon App Manager, they are looking to provide what I would call an online desktop experience that will be accessible from any device, anytime, anywhere. VMware has stated that this will be aimed at the enterprise market. I think that VMware will eventually open this up to other business markets as well, and it will come into direct competition with similar offerings already available from Google (Google Apps) and Microsoft (Office 365).
VMware will continue in this direction, looking to expand by not only providing the online desktop but, in the future, to also provide online IT as a whole, changing the way we work today.
There’s a saying in the restaurant industry: “When a fine dining establishment suddenly offers a brunch menu, that’s often a bad sign.” There’s nothing necessarily wrong with a dinner place adding hours to catch the brunch crowd, but it sometimes signals that they’re worried about turning enough tables.
That saying comes to mind as I ponder VMware’s Zimbra, SlideRocket and other cloud-application acquisitions. They stray oddly far from VMware’s core, potentially diluting the message about what kind of company VMware really is. It’s the same gamble a restaurant takes: Being known for dinner doesn’t always translate into having a good brunch menu.
VMware has rightly established a firm footing in the virtualization space. VSphere is light years past any competition, but VMware struggles to diversify even along related paths, such as VDI and capacity management. These stories remain unpolished, even though they are far more valuable to VMware than some Exchange and PowerPoint alternatives.
These cloud applications might merely represent new toys in the box for a company desiring a seat at the applications table. But they might also represent insidious distractions.
It’s obvious VMware needs to branch out if they want to continue to be successful. Having conquered the hypervisor market, they need to look elsewhere to grow their business. However, VMware’s challenge is that they are low man on the totem pole in the application space. There are much bigger and more established players there already, like IBM, Oracle, Microsoft and Google, that VMware will have to compete with.
VMware’s strategy of buying companies and then trying to string them all together will take some time to bear fruit. The company will have its hands full trying to fit all the puzzle pieces together into a worthy contender that can compete with the big boys.
VMware has good people and good leadership and can move nimbly in a market were giants like Microsoft are slow to react bring products to market. I feel they will be successful if they make the right moves and build relationships with key companies that can help them win over customers who might be reluctant to give them a try in the application space.
I don’t believe VMware will lose focus on their core hypervisor; they are adding staff like crazy to handle the many areas that they are branching out into.
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