Can VMware Keep It Up?

For every force in the universe, there appears to be a counter-force.

And VMware's meteoric IPO has raised enormous speculation as to whether they'll be able to keep up their growth rate (and market position) indefinitely.

One example of this thinking is a well-written piece by Ashlee Vance over at El Reg that succinctly summarizes the prevailing thinking on the topic.

BTW, I love the work that Ashlee does, and The Register is one of my daily mandatory reads.

But I think that there's more going on here that most people realize. 

I'm not trying to predict the future here (no one can do that), I'm just trying to add more to the speculative mix, mostly based on personal experience.

It Isn't Just Hypervisors ...

I think most of us believe that -- over time -- hypervisors become commodity-like.  Even people at VMware must realize this phenomenon.

There will be different choices from different vendors.  Even today, you can download free hypervisors that work (sort of) from lots of sources.

Over the next few years, there will still be room for differentiation, but the general trend will be most likely more choices from more people.

But to limit your thinking to a hypervisor debate would be doing a disservice to the big picture, I think.

What About First Mover Advantage?

In infrastructure, there's a clear first mover advantage. 

Once IT gets something in that works and they're comfortable with, they are not exactly in a hurry to rip and replace unless their solution

(a) clearly isn't meeting their needs anymore,

(b) there's a cheaper/better alternative that isn't more trouble than the gain, and

(c) there's some sort of triggering external function to force the change.

Just having cheaper alternatives around isn't enough, folks.  It's got to be much, much better -- and -- you have to get lucky that there's some sort of external factor that forces a revisiting of the topic.

Mainframes are still a good business for IBM forty years later, aren't they?  More stuff gets sold in this space than you might think.  Every year, some IT company decides to "attack the mainframe" and they end up breaking their teeth.  It just ain't coming out, no matter how much better/cheaper/cooler your new stuff is.

Lots of other examples of this phenomenon when you think about it.  First vendor in gets to pour concrete on everything that hardens quickly and is a real problem for others to remove.

And, given that our friends at VMware are getting lots of customers into production, and the other companies are still a bit out there a ways in terms of robust product (let alone adoption time), it should be a significant factor in anyone's thinking on this subject.

And this first-mover advantage gets you to lots of other related effects, like ...

What About Management?

Hypervisors have to be managed to be useful.  You need a way of invoking virtual machines, managing then while they're running, finding service level problems and resolving them, reporting on them, and so on.

No one has a perfect answer to this, but one company has a really big headstart.

By comparison, when I probe around this with the Xen crowd, the answer I get is that they'll make the APIs open, and hope that the ecosystem will come up with useful answers.

Maybe true in the fullness of time, but certainly elongates the competitive differential by several years or more.

Or Other Advanced Features ...?

DRS is cool, to say the least.  The ability to pool multiple physical servers and run lots of virtual entities that dynamically move around in reaction to changing requirements is one of those intoxicating ideas you just can't get out of your head once you understand it.

How will the new entrants be able to do this better?  Not just match the feature, but give an order-of-magnitude improvement?  I can't see how that's going to happen.

Maybe you've heard about VMware's Lab Manager.  Basically, use the power of virtualization to attack productivity in one of the most expensive areas of IT, and that's test/dev.  Sure, other people can copy at some point in the distant future, but can they do it significantly better?  Hard to see that as well.

There's more, but you get the idea.  Not only does VMware have a head start on the technology, and the adoption, but they've also got a head start on advanced features and use cases.

And Don't Forget The Ecosystem Effect

No technology stands alone -- the power of any enabling technology is greatly magnified when other IT vendors pile in and start extending the value proposition.  Consider the ecosystems of Cisco, or Microsoft, or SAP, or Oracle -- you'll get what I'm talking about.

Since VMware is the first viable server/desktop virtualization ecosystem, everyone in IT vendor land has started to pile in.  I've talked about this before, but it's clear -- the game is on. 

I think hundreds of millions of dollars of incremental R+D will pile into the VMware ecosystem space in the next few years -- all targeted at making VMware more productive, easier to use, more secure, etc. etc.

Now, if you're a virtualiation vendor who's late to the party, you've got an exceptionally tough challenge ahead of you -- you've got to convince dozens of IT players to invest their R+D in your particular flavor of virtualization, with unclear prospects of playback. 

And if you're a vendor who's late to the party, better bring your checkbook as well.

Even if you're potentially successful at this (think Microsoft, as an example) the best you can hope for is a "me too" positioning.  You're still up against all that hard concrete IT departments poured in a few years ago.

Game On!

Server/desktop virtualization is a game changer.  The more you look at it, the more you realize it changes most everything we  understand about IT today.

If you're an IT vendor (virtualization technology or otherwise) you just can't ignore it.  You have to play.  You have no other viable choice. 

And if you're a consumer in IT, you probably realize it's gonna be part of your landscape sooner than later, if not already today.

This war for IT customer's minds will be fought with R+D, alliances, press, marketing, licensing, analysts, consultants, sales force, etc.  Eveyone will be jockeying for a new position in the pecking order.

I think it will be the single biggest industry battlefield for the next few years.  It will get very noisy and very confusing.  And it's just started.

But, folks, I'd suggest you step back and look at the big picture before you assume VMware will be marginalized in the next few years just because someone will eventually come up with an alternative hypervisor that works.

You'd be missing the big picture.