Welcome!

Open Source Authors: Victoria Livschitz, Ignacio M. Llorente, Carmen Gonzalez, Michael Meiner, Liz McMillan

Related Topics: Virtualization

Virtualization: Article

Will VMware Still Exist in Five Years?

VMware deserves a lot of credit. It turned this industry on its head. But will it still exist in 5 years?

Brian Madden's Blog

VMware deserves a lot of credit. Even though hardware virtualization has been around for decades in one form or another, we wouldn't have it in the x86 space without VMware. The hardware and OS vendors would have been happy to keep selling hardware that was only 20% utilized. VMware turned this industry on its head. But it has awoken the slumbering giant that is Microsoft...

[Note from the author: This wasn't an article I intended to write right now. But after Alex Barrett blogged about a conversation I had with her last week on this very topic, my inbox has been flooded with emails asking "Did Alex really quote you properly?" and "Are you crazy?" The answers to those two questions are "yes" and "quite possibly."]

VMware deserves a lot of credit. Even though hardware virtualization has been around for decades in one form or another, we wouldn't have it in the x86 space without VMware. The hardware and OS vendors would have been happy to keep selling hardware that was only 20% utilized. VMware turned this industry on its head. They deserve credit not only for the move towards virtual hardware, but also for the whole VDI concept. (Even though VMware did not initially embrace VDI, the early adopters / creators of the concept couldn't have done it without VMware.)

So kudos to VMware for doing some awesome stuff.

But VMware will face some tough times ahead:

  • Hardware virtualization is becoming a commodity, and when this happens, you end up with a lot of competitors, feature parity across vendors, and a price race to the bottom.
  • The "easy" virtualization sales have been made already. What's left is the more complex stuff, with longer sales cycles and more complex deals.
  • Now that VMware has "proven" the concept of hardware virtualization, and now that analysts have predicted this market will be <insert some random 11-digit dollar amount> by <insert some year>, many companies are entering the space.

VMware has awoken the slumbering giant that is Microsoft. Sure, there have been isolated cases of smaller companies successfully competing against Microsoft, or smaller companies partnering with them (e.g. Citrix), but in general, if you're a software vendor and Microsoft puts you in their crosshairs, you days are numbered. Microsoft will add many of VMware's core features into the base OS over the next several years without really increasing the price. And in addition to Microsoft, many other companies are entering the hypervisor space, including Citrix, Novell, Sun, Oracle, and even Phoenix Technologies (the BIOS makers).

Of course VMware has the first-mover advantage in the virtualization market, and conventional business wisdom suggests this can help a company win long-term. But history is full of wildly successful businesses who only entered a market after another "first mover" blazed the trail. Look at Amazon, Walmart, eBay, Starbucks, Microsoft--none of these was the first company in their sapce, and each of them dominates today.

I don't want to minimize the impact that VMware has had on the industry. But I think in five or ten years, VMware will be more significant for what they did in the 2000s, not what they're doing at that time.

I'll write another article tomorrow about what VMware could do to maintain their dominant position. Feel free to share your thoughts in the comments today. Here are some points to kick-start the conversation:

VMware is doomed

  • They only make one type of product, and it's a market that everyone is entering.
  • They're competing against Microsoft.
  • People will want to buy a more complete integrated solution from one vendor, and that includes things that VMware doesn't own
  • VMware is too dependent on other vendors that they're also competing against. For Citrix servers, why not use Citrix's virtualization? For VDI, why not use Microsoft's RDP or Calista? For packaging offline Windows VMs, why not use Microsoft's Kidaro to package Microsoft Windows? For software distribution, why not use the packager of your distribution vendor (Citrix or MS) instead of Vmware's Thinstall?

VMware will continue, no problem

  • First mover advantage. ("No one ever got fired for buying IBM." We have that now in the virtualization space with VMware. VMware = Virtualization. Period.)
  • Even though their stock has lost more than 60% of its value, VMware's market cap is still $18B (3x Citrix)
  • VMware is owned by EMC. (Remember only 10% of VMware's shares are public.) EMC's market cap is $31B
  • The virtualization market will be HUGE in five years. VMware only needs to grab a small slice.
  • Only the actual hypervisor will become a commodity. VMware and others will compete on the value-adds, which VMware leads

What does VMware need to do to survive?

  • ?? Let's discuss ??

This post appeared originally here and is republished in full with the kind permission of the author, who retains full copyright.

More Stories By Brian Madden

Brian Madden is an independent technology analyst, author, and thinker. He's written several books and hundreds of articles about Citrix and application delivery technology. He is a five-time Microsoft MVP, a Citrix CTP, and the creator of BriForum, an annual independent application delivery technical conference. He's also the editor-in-chief of BrianMadden.com, a popular industry website with millions of visitors per year. Madden lives in New York City.

Comments (2)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.