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Will VMware be around for the long haul?

I chatted with server-based computing expert Brian Madden the other day, and we got on the topic of VMware Inc.’s long-term viability as a company. Unlike VMware’s stock holders, Madden believes that the company won’t always be the behemoth it is today, despite the massive changes it has spurned in the IT industry.

Today, VMware’s strength is its “first-mover advantage,” according to Madden. But the same lead that has enabled VMware to enjoy an overwhelming market share, and a several-year technological advantage over its competitors, might also come back to haunt it, Madden said.

“Look, Amazon wasn’t the first online bookseller, eBay wasn’t the first online auction house, Internet Explorer wasn’t the first Web browser,” he said.

The list of second-mover companies that have rapidly eclipsed the pioneers is substantial. (Then again, the list of companies with first-mover advantage that made it, so to speak, is probably also pretty long.)

With mounting pressure on VMware from all sides, Madden thinks the company’s days are numbered. “VMware is going to be a footnote in the history of IT,” he predicted, “albeit an important footnote, no doubt about it, because of the way that they’ve changed the industry. But in the long run, I think our kids will be talking about VMware in their history classes.”

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Hello, I think VMware is pricing themselves out of the market. Most SMBs can't pay or don't want to pay $15,000 for features they can get for far less from MS, Citrix, Parallels, especially the overpriced VirtualCenter, which requires additional SQL and Windows licenses. I would jump on XenServer or Parallels Server except that I am in a rural area with few choices for consultants, and ours has a vested interest in expensive VMware products. VMware will become the app one uses to run virtualization on "old" x86 hardware.
VMWare's tanking, their stocks in the toilet, their profits are way down, Parallels is rocking their boat. Last time I checked, when a public companies stock falls, so does their company. Ask Bear Stearns.
Stock prices don't tell all. VMware still has a huge market presence. Parallels' server version is still in beta. It will take more than stock price plunges for VMware to stagger out of the ring. MOST companies' stock prices are falling nowadays, VMware is no exception. They have enough $$$ from their IPO and EMC to keep going for quite a while. Google and Microsoft's stock prices have dropped in the past, have they gone out of business?? I stand by what I said, but stock prices are not the only applicable metric in VMware's situation.
I thought this webinar event might be of interest given you blog on virtualization: It looks at what software licensing means for virtualization.
B Krueger, Are you really kidding me with Parallels rocking the VMware boat? They have no shipping server product (other than the merged in Virtuozzo line which is stuck in the hosting space). Sure the VMW stock is down. Have you looked at the entire market? DOW is down. The entire market is down. The Feds are trying to keep all of us from sliding into a recession. Look at Google, Apple, Citrix, Microsoft, etc over the same time period. Google has lost $300 per share over the same time. I guess Google is going out of business. Apple has lost $120 per share over the same time. I guess Apple is going out of business. Citrix and Microsoft are in the same boat. I really can't believe people are that stupid. Please think before you comment next time.
I wouldn't say that a $16 billion market cap is "in the toilet". That's still higher than every other software company other than Oracle, Microsoft, SAP and Adobe. It's 3x that of Citrix.
Citrix and Xen server are the ones to look to fall out. Look at what Citrix paid for Xensource as other software such as VMware VDI and others give you a much more secure environment to play with in the corporate arena than Citrix's offerings.
While I respect Mr. Madden in his arena, forecasting the demise of VMware is highly speculative at best (do you think he may have some self interest in his statements?). If VMware retains and grows the intellectual capital they currently have, continue to be responsive to customers (as has been my experience), and continue to make good strategic investments they will be around for quite some time to come. The aforementioned combination including the technical lead VMware has on the competition speaks highly for their longevity as a company.
As someone who works with both VMWare, Citrix and Xen, I would say Gene has no understanding of what Citrix is doing in the VDI space to make the statement he has made. I doubt VMWare is going away any time soon. I would say that they will have a LOT of competition and will have to change their pricing to compete effectively in the marketplace.
David is right on the money here. I'm a VMware admin and have spent years working with MS and VMware products... and you guys don't seem to be understanding that VMware is the ONLY bare-metal true hyper visor, all the others rely on a general purpose OS, and as such, suffer in performance. This guy that says that SMB's cant afford $15K for software has no idea what he is talking about, ESX and Virtual Center pay for themselves in electricity savings and downtime reduction.