Well, everybody saw it yesterday -- the big VMware IPO.
And, finally, I can get back to blogging a bit more on the topic.
I think there's speculation (at least in my mind) as to why it was so successful?
So, What's Going On Here?
Opinions run rampant as to the surprising enthusiasm for the offering.
Is it that tech IPOs are back in favor? We won't know until we see some more similar to VMware in size and scope, which we're not likely to see soon.
Was it that people looked at the prospectus, and were impressed with the financials?
Or maybe it was just the herd-oriented, buzz-instinct that investors occasionally get?
Or maybe it was something else ...
Did People Really Get It?
By now, everyone is pretty familiar with the first-order impact of server virtualization ... basically a consolidation and utilization play.
More and more people are becoming familiar with the second-order impact -- less management effort in server environments -- easier to configure and provision, etc.
But there are third, fourth, fifth and sixth order effects.
IT being more responsive for example. One of my side projects is to build a social media platform at EMC, and the IT guys said "sure, we'll just pop it in a VM". No six week procurement cycle here.
How about building server images? Today we manually assemble operating system, database, application software, utilities, patches, etc. Tomorrow we simply choose a ready-to-run stack from a library.
Or thin-client desktops? Or service providers that can offer easy-to-host environments because it's a neat package that can easily be moved? Or software distribution? Or advanced security, or .... well, I don't think we know where the journey will end, do we?
Or how basic IT processes that have existed for decades have to be re-thought in a virtualized environment? Things like charge back, service delivery, capacity planning, etc.
Simply put: I think virtualization changes everything
And we, as an industry, are still probing the boundaries of that statement. It seems to be an expanding universe, with no well-defined boundaries.
I'd like to think that some part of the investment community thought about these issues, and understood what was really going on.
Or maybe not ...
And There Will Be Competition (Or Should Be!)
One of the consequences of a successful IPO is that it provides a high degree of motivation for others to invest in a similar fashion.
As an example, Citrix announced their intent to acquire XenSource for $500m today. I just have to think that VMware's warm reception by the financial markets may have influenced this a bit. And I think we'll see several other moves by other industry players. Some will be to defend or compete, others will be to exploit the opportunity.
I've mentioned before that strong competition is a good thing: good for customers, good for the industry and the companies that compete. And for server/desktop virtualization to be a successful, thriving market, there will need to be strong competitors.
Customers will need choices, options and alterative means of achieving results. There shouldn't only be one game in town.
And A Healthy Ecosystem Is Forming
Any wildly successful technology usually creates a thriving ecosystem around it. And, if you look closely at the VMware marketplace, you'll see dozens and dozens of companies adding value in unique and interesting ways.
I would offer that you can measure the health of any tech company by the health of its ecosystem, and VMware has a very healthy one that's growing.
But once you've figured out how to create a unique bit of value-add with, say VMware, that same trick isn't that hard to replicate with Xen, or any other server/desktop virtualization environment.
So What Happens Next?
I don't know.
In some sense, we're in uncharted territory. There's no clear prior example to compare with -- at least, not in my experience.
Which makes it very fun, indeed ...
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