VMworld 2014 – Constructive Self-Disruption Continues

By Charles King, Pund-IT, Inc.  September 3, 2014

As business IT continues its inevitable evolution toward commodity status, many vendors are scrambling to keep up. Some once-leading platforms were fatally inarticulate in defining their place, while others succeeded by adapting traditional solutions for new applications and developing innovative new products and services for emerging business needs and markets.

VMware is most definitely a member of this latter group. While the company first established itself as the market’s leading vendor of virtualization technologies for x86-based systems and solutions (a position it continues to hold despite determined pursuit by Microsoft and others), it also pursues a host of related technologies and markets.

The launch of its vCloud technology at the VMworld 2008 conference made VMware one of the earliest vendors to take a firm position on the commercial potential of cloud computing. Since then, the company has voiced continual optimism about the value of cloud solutions and services in business computing. But that vision has also evolved to account for changes in the technology and market landscapes.

For example, many cloud proponents initially suggested that future business applications and workloads should and would reside entirely in public cloud infrastructures. But over the past 24 months, enterprises and the IT vendors that serve them have increasingly targeted hybrid environments that blend the best aspects of public cloud services and internal private clouds.

Yes, public cloud will play an increasingly important role in business computing but there are some applications and data that organizations will never allow beyond the security of their own data centers.

A View from the vCloud

VMware has intensified its own focus on hybrid cloud, and last week’s VMworld 2014 conference in San Francisco found the company further refining its stance. Presentations by CEO Pat Gelsinger and other VMware executives enumerated three strategic priorities:

  1. The company’s software-defined data center offerings, which qualify as the foundation for the company’s solutions,
  2. Hybrid clouds, including its own vCloud Air (previously, VMware vCloud Hybrid Service), which support highly integrated, federated private and public cloud infrastructures and assets, and
  3. A wide variety of end user computing solutions and services.

These seem to be eminently sensible strategic initiatives given how the market has been shaping up, but the fact is that hybrid cloud is a concept still in its early days. Add in the fact that various vendors approach hybrid cloud quite differently, and you have enormous opportunities for market and customer confusion.

For example, Microsoft’s Azure, not surprisingly takes a Windows-centric view of both the cloud and customers. Amazon’s approach to the cloud begins (and, some would say, ends) with its various AWS service offerings. In contrast, VMware sees the biggest challenges and opportunities of hybrid cloud in enterprises’ private cloud infrastructures and assets.

The company’s position in those environments is particularly strong. But VMware executives also acknowledged that to make hybrid cloud work truly well will require considerable, additional efforts in network virtualization and virtualized storage management, as well as customer education. Early movers stand to benefit enormously in developing markets but there is also a danger that misinformation can become common wisdom.

VMware’s end goal is what some call a “common operating model” that bridges private and public cloud infrastructures and assets and intends, in many respects, to supplant traditional device-specific operating systems. The company’s announcement of a deepening of its support for OpenStack is an indication of the direction it is heading here, but the larger view is a widening recognition that, as Angelos Kottas, VMware’s director of hybrid cloud services marketing put it, “VMware really is the OS for the data center.”

That is a bold statement but it is also unsurprising considering the “brand transparency” of many cloud-based solutions and services. It also underscores why a number of well-established IT vendors, including some VMware partners, are also supporting alternative architectures and technologies.

The Path to End User Computing

VMware’s increasing focus on end user applications and services may have come as a surprise for some VMworld attendees, but it is a direction in which the company has long been heading. The point is that computing endpoints, including smart phones, tablets, laptops and desktops of various kinds have entered a phase of what might be called exploding heterogeneity.

The result is business IT environments where past platform, operating environment and application barriers are simply no longer relevant. Diversity is the new reality, and one that end users are quite comfortable with. But how about business organizations and IT? Not so much. In fact, it can be argued that the BYOD (bring your own device) initiatives that have become commonplace in many or most organizations also, often unexpectedly, increased some forms of complexity while decreasing others.

VMware sees an opportunity here in providing a platform for supporting and delivering services across myriad heterogeneous devices and business use cases. In the words of Brian Gammage, VMware’s chief marketing technologist for end user computing, “Technology is only successful when it provides the tools to support the aspirations and needs of individuals.”

That is certainly a logical position that should add value to VMware’s solutions and strategies but it could also lead the company into conflict with some longstanding allies. That’s hardly surprising—the interest areas of growing vendors commonly, increasingly overlap with those around them. But it will also be important for VMware to consider and craft strategies that do minimal damage to important partnerships.

Final Analysis

So how sensible and achievable are VMware’s strategic priorities? They are certainly all within the company’s wheelhouse and, while they represent some distinct corrections in VMware’s traditional course, no wholesale change of direction was obvious or indicated. Instead, what I saw at VMworld 2014 was more in the line of a company altering its approach to account for systemic market changes.

In truth, this reminded me of something I’ve heard Joe Tucci, chairman and CEO of EMC, VMware’s parent company, say several times: that it is better for a company to disrupt itself than to wait for the market to disrupt it.

That viewpoint has been apparent at VMworld for years but has been particularly clear in the management teams led by first, Paul Maritz (now CEO of Pivotal) and, now, CEO Pat Gelsinger. In both cases, VMware acted as a company that kept the current needs of its customers at heart, but also recognized that good business stewardship required preparing itself and its clients for the future.

That understanding, or what might even be called an appetite for constructive disruption, was clear on the ground at VMworld 2014. It is an approach that has served VMware and its customers well over the past decade and looks likely to position them to succeed in the decade ahead.

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