By Charles King, Pund-IT, Inc. September 12, 2018
As I was preparing to attend VMworld 2018 a couple of weeks ago, I realized how much history the company and I share. VMware was founded the year before I became an IT industry analyst. A few months after I started that job, a pair of VMware reps on their first analyst “tour” briefed us to explain and promote the company’s technology and strategy.
Further along, I was covering EMC in 2004 when it bought VMware, a deal spearheaded by EMC CEO Joe Tucci that still qualifies as one of the tech industry’s all-time best corporate acquisitions. In 2016, I was covering both EMC and Dell when the latter announced its plans to acquire the former, along with its 85% stake in VMware.
Both VMworld 2017 and 2018 took pains to emphasize synergies between the company and its new parent but for slightly different reasons. Last year’s event was all about organizational continuity, including assuring VMware’s customers, employees and shareholders that Dell EMC fully understood and would continue to respect the company and its achievements.
VMworld 2018 contended with subtler issues, including Dell’s recent decision to reenter public trading, including acquiring the VMware tracking shares it issued in 2013. In addition, the recent departure of Intel CEO Brian Krzanich has led to speculation that VMware CEO Pat Gelsinger—once a senior executive at Intel—was being touted to replace Krzanich.
So along with celebrating some notable milestones for VMware, including being both the company’s 15th and the 20th anniversary of its founding, VMworld 2018 emphasized VMware’s leadership stability, along with the continuing, growing value it provides Dell Technologies.
The journey to legacy status
It’s safe to say that the VMware that hosted 24,000+ attendees from 86 countries at its 15th annual conference in Las Vegas is a far cry from the one that showed up in my employer’s offices in 1999.
VMware initially focused on being the first vendor to support virtualization on systems with Intel’s x86 processors. But the paltry capabilities of those systems (mostly relegated to edge of network functions, like email and file/print) made the company’s offering anything but impressive to data center pros. In fact, deriding VMware was an automatic response among many old-hand mainframe and Unix system vets.
However, VMware’s initial focus on enhancing the performance and value of workstations, as well as developer efficiency rang a bell with businesses, making them receptive to future engagements with the company. Plus, as x86-based systems’ performance and stature grew, VMware rode those coattails while also broadening its strategic vision and technological focal points.
In addition, since the beginning, the company largely aligned its products and services with the needs of enterprise clients. That makes great sense since, to paraphrase legendary bank robber Willie Sutton, that’s where the IT money is. But by focusing on enterprises, VMware also inoculated its solutions against an early demise.
How so? Large organizations are among the most conservative of IT buyers and users, so after a vendor makes it into an enterprise data center, getting booted out typically requires radical market shifts or gross incompetence. If a vendor continues to deliver quality and value over time, its solutions attain “legacy” status—the platinum standard for achieving technological longevity.
Some in the industry like to dun legacy solutions, considering them to be automatically, hopelessly passé in comparison to new technologies. Aside from being a tiresome cliché, that attitude also ignores the provable, ongoing benefits that legacy solutions provide. By any measure, VMware is one of the most essential, deeply rooted and successful legacy vendors for modern enterprise customers.
Examine and adapt
This doesn’t mean that legacy vendors and platforms are bulletproof—Sun Microsystems is just one of many companies that, though once considered unstoppable, are now consigned to Silicon Valley’s dustbin. That said, the way a vendor avoids such a future is to examine and adapt to new trends and technologies. In fact, Sun’s inability or unwillingness to adapt to disruptive x86 systems and related technologies contributed significantly to its failure.
In contrast, VMware has showed its mettle by successfully negotiating two elemental course changes. In 2008, the company’s CEO and co-founder, Diane Greene, was replaced by Paul Maritz, a former senior executive at Microsoft who joined EMC after the company acquired his pioneering cloud computing start-up, Pi Technologies. Not surprisingly, Maritz used his first VMworld keynote to discuss the company’s natural place in the cloud and further expanded that vision at VMware’s vCloud launch the following year.
Maritz led VMware until 2012, when he was replaced by current CEO Pat Gelsinger who until that point led EMC’s Information Infrastructure Group. Prior to joining EMC, Gelsinger was Intel’s first CTO, as well as SVP and GM of the company’s Digital Enterprise Group, reflecting his deep understanding of and expertise in data center silicon, systems and software. Under Gelsinger’s leadership, VMware has refined its vision of and expanded it efforts in a wide variety of software-defined solutions and services.
Attacking and solving hard technical problems
During a session with IT analysts, Gelsinger provided the best thumbnail description I’ve ever heard for VMware’s core strategy: “Attacking and solving hard technical problems is what we do.” That point can be successfully applied to just about every solution and strategy the company has ever pursued.
Those include the vision that VMware shared at VMworld 2018 of becoming the ubiquitous digital foundation for “any device, any app and any cloud,” as well as the solutions that the company and its partners introduced during the conference. Those partners include, of course, Dell Technologies which launched new VMware-integrated solutions, including offerings for edge, core and cloud environments.
Of particular interest to me was the Dell Provisioning for VMware Workspace ONE service which allows customers that use Dell PCs and its PC as a Service solutions to have new endpoints configured, integrated and personalized at the factory. When those PCs connect to a corporate network for the first time, they automatically download and install whatever files, permissions and updates individuals require, measurably simplifying deployment processes and lowering acquisition and management costs.
Gelsinger’s co-host at the analyst session, Michael Dell, detailed commercial applications where the pair enjoys considerable synergies, including hyperconverged systems and video surveillance use cases. In such cases, optimizing Dell Technologies’ server, storage and networking portfolio maximizes overall performance but it also enables Dell to swiftly enter and effectively compete in target markets.
Existing synergies meet emerging opportunities
Dell also detailed emerging opportunities the two companies are investigating together, such as blockchain, whose potential he compared to the emergence of public key technologies 30 years ago, and Kubernetes container solutions. In Dell’s words: “We look at situations and ask, what are the odds that this hasn’t happened before. Those are the opportunities we look for.”
That kind of forward-looking strategizing should serve both companies well, but it also casts light on what customers can expect as the pair works in an increasingly orchestrated fashion. When EMC acquired VMware, the company’s position as a leader in enterprise storage prevented complaints that would surely have arisen if a server or system vendor had pursued the deal.
By the time EMC (with VMware and Cisco) launched its VCE converged systems portfolio in 2009, VMware’s position as an agnostic provider of enterprise class solutions was so well-established that its role in VCE raised nary an eyebrow. That position continues today, leaving the company’s numerous partners free to develop VMware-enabled solutions according to their own needs and timetables.
However, those partners include Dell. From what I saw at VMworld 2018, the company will move proactively to leverage VMware’s newest technologies and services. That approach is already clear in Dell Provisioning for VMware Workspace ONE—at this point, no other PC vendor offers a similar service. Over time, this close collaboration is likely to result in significant competitive advantages for both companies.
Final analysis
The IT industry is rightfully lauded as being a veritable fount of new ideas and exciting products. But turning unique concepts and technologies into workable, durable, reliable solutions and services is far harder than most understand, or many will admit. So along with developing and delivering offerings never seen, vendors also need to embrace and pursue efforts that ensure their value to customers and broader markets.
“Attacking and solving hard technical problems,” as Pat Gelsinger noted at VMworld 2018, is what VMware does. In fact, it is what the company has always done. The company proved that with its first workstation-focused solutions in 1998. It has continued to prove it with efforts in cloud computing and software-enabled solutions, and new offerings for the core and edge of enterprise IT environments.
As a result, VMware’s vision of becoming the “digital foundation for any device, any app and any cloud” is far more than simplistic marketing hype. Instead, it should be considered the clearly stated aim of an organization with a long history of successfully pursuing and achieving its goals.
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