Yesterday I read about Tegile supporting Microsoft Windows environments (SMB3, SCVMM, ODX) and last week’s news from Tintri looked very much the same. These are only two examples, but the list of vendors which are quick to give their support to SMB3 and Hyper-V is getting longer day by day.
My perception is that VMware, while trying to expand its sphere of influence and dominate the Data Center, is at risk of building a colossus with shaky foundations… Let me explain my POV.

SDDC, Cloud and user computing

Vmware is the leader of the server virtualization market, but can no longer grow there (on the contrary, looks like its market share is actually shrinking).
Competition is much stronger than in the past, other hypervisors are cheaper and the latest versions are not that bad. Hypervisors are becoming more and more commodity.
VMware knows better that anyone else and it is trying to expand in adjacent, more lucrative, markets. It is not wrong per se and actually this company, like any other, has to maintain revenue growth to keep its investors content.

It’s no secret, VMware’s main targets are SDDC, Cloud and user computing. Each one of these market segments is important for the future of VMware but the risk is to undermine the company’s most valuable, and profitable, assets: ESXi and vCenter.

Bumpy road

iStock_000020836904MediumTheoretically, User computing, could be a great opportunity. The main competitor is Citrix and, even though this won’t be the “year of VDI” (it probably will never be), VMware could generate some revenue here.
Horizon is maturing and version 6 has introduced some very good features.
At the same time, VMware is investing and acquiring to make the product stronger for mobile access and management.
Is it enough? probably not. Citrix customers are satisfied, its product is good and the partner/reseller ecosystem is strong. Furthermore, I’m not sure that investments in companies like Airwatch and integration attempts will be worthwhile in the short/medium term.

Computer NetworkSDDC is the riskiest business: VMware, with its SDDC (Software-Defiend Data Center) strategy, is trying to eat most of its partners’ lunches (in both networking and storage), but ruling the Data Center won’t be as easy as VMware would like it to be. VSAN and NSX are stepping on most partners’ toes and, consequently, they are all looking to strengthen the partnerships with the competition: Microsoft and RedHat.
Also in this case, VMware is following the most obvious strategy but, by doing so, it is indirectly helping competitors to improve their ecosystems.
Since the acquisition of Nicira (and after the presentation of VSAN), the number of vendors seriously supporting Microsoft Hyper-V and KVM, has been steadily rising… Not to talk about those users who see NSX and VSAN as tremendous lock-ins.

iStock_000006490373MediumCloud computing is tough and compelling at the same time: It’s a totally new market, but it is evolving very rapidly! VMware has a leadership position in the private cloud (when it is thought as an evolution of and existing infrastructure) but things are much blurrier in all other cases.
– The interest for Openstack is strong, many customers and vendors appreciate it for its “openness”
– The competition on the commodity public cloud is already over under many aspects: AWS, Google and Microsoft are playing a different game! (in any case not VMware’s business)
– “Hybridly” speaking, at the moment Microsoft is offering the most interesting situation… and I won’t mention the PaaS part of it!
I also have some concerns about vCHS from the reseller’s standpoint (and also technical indeed – a post about DR services will follow soon), but it won’t take too long to see whether or not it will be a successful service.
– “infrastructurally” speaking there is a lot of interest for lightweight virtualization (containers, docker, whatever)… and again the hypervisor becomes commodity.

Why it is important

VMware is a wealthy company but has some interesting challenges to face up to ahead. It now has much more competition than in the past and it’s becoming public enemy number one in all the mentioned market segments. It somewhat resembles Microsoft of the ‘90s… but times have changed.
Furthermore, hypervisor commoditization will surely not be helping VMware in terms of revenues and differentiation.

The good news is that end users will benefit from this situation: more available solutions in the market, less lock-ins, more competition and better prices.