VMworld and VMware's continued attempts to maintain relevance

That 'VM' in VMware's name is increasingly becoming irrelevant as the company struggles to adapt.

vmworld image from emc partners twitter account

At VMware's annual conference in Las Vegas this week, the company made a number of announcements that speak to the very real struggle the company faces as seismic shifts in the industry fundamentally change its business.

First some context. VMware became an industry powerhouse through capturing the bulk of the market share in the virtualization space. Virtualization is, of course, the technology that allows organizations to do more with their physical servers. By creating numerous "virtual" servers that sit on a single physical server, VMware was, almost single-handedly, responsible for increasing organizational IT efficiency.

But technology is only part of the way that VMware grew to dominance. It also mastered the art of business execution -- its sales and marketing was second to none, and the company had proven masterful at getting organizations to pay handsomely for technology solutions. Indeed, VMware's salespeople are legendary in the industry, perhaps only second to those of Oracle for their appetite and aptitude for closing expensive license deals.

But this focus on virtualization on the technology side, and the excellence of enterprise sales on the business end, have both been factors that have hindered VMware's ability to adapt to a changing world. The growth of cloud computing, containerization, microservices and serverless computing, while all at different stages of adoption, have all been corrosive to the importance of virtualization in general, and VMware in particular.

Meanwhile, the rise of end-user self service and the commoditization of IT have been a horror story for all those fat-cat technology salespeople, wedded as they are to a "get 'em hooked and milk 'em for life" approach.

So it’s been interesting watching VMware in the past few years. There have been some ill-fated attempts to become a SaaS company, with a number of acquisitions which were soon put out to pasture. VMware has had an on-again, off-again attempt to become a cloud provider. But while the company has denied the fact, industry commentators roundly dismissed VMware's vCloud Air product as irrelevant.

And so we come to this year's VMworld amid an ever-growing uptake of cloud products and the increasing attention to new, non-virtualization-based infrastructure approaches. And so what did VMware announce to avert these risks?

Well firstly, the company announced Cloud Foundation, a mashup of a bunch of existing VMware products that are now going to be available sited on public clouds. The idea of this is to allow organizations to use technologies they're already familiar with, and that they have a number of existing applications built on top of, but to use them within a public cloud context. All of a sudden those organizations that are VMware shops internally, can now run their existing applications on public clouds, private clouds and on-premises data centers.

Cloud Foundation includes VMware staples vSphere, Virtual SAN, NSX and SDDC Manager, and is slated for introduction later this quarter.

In a related announcement, VMware is rolling out Cloud Foundation on IBM's SoftLayer public cloud first. The message here from VMware is that many VMware customers have wanted to use IBM cloud but haven't been able to because of their existing footprint -- now they'll be able to within the context of existing approaches.

If this sounds like something you've heard before, that's probably because a number of existing vendors, most noticeably Microsoft, have gone down a similar path. But in Microsoft's case, it does so because it has existing enterprise developers building solutions directly on a Microsoft stack. VMware doesn't have that tight developer focus, and hence there is less value proposition here, outside of those legacy applications that need to be moved.

The tie-up with IBM is actually an extension of a partnership announced earlier this year, and one which both companies claim has gained good customer adoption. The general feeling among the punditry is that this is unlikely. IBM isn't seen by anyone as a leader in the public cloud, and VMware, while enjoying a massive installed base, isn't particularly seen as the avenue to deliver real enterprise agility. Hence, a partnership between the two is likened by some as two threatened species trying to eek out a continuing existence together.

At the show, VMware also talked about "cross-cloud services," a hybrid cloud product base that in theory makes it easier for organizations to move applications to and from different flavors of infrastructure -- on-premises or cloud. While this is an oft-promised but seldom actually delivered idea, if VMware can actually pull it off, the company gets at least one tick, from a technology perspective.

But here's the rub. Even with all the technology pieces in line, VMware is still hampered by a sales force which is seen as high-priced and high-pressure. The absolute antithesis of something like Amazon Web Services, which is more than happy to compete in a high-volume, low-margin market. VMware has shown no ability to do so, and its internal sales teams do nothing to change that perception. The fact that VMware is yet to actually either deliver or indicate pricing on these new products is an indication of that.

The technology world is changing and, despite its confidence and hyperbole, this year's VMworld hasn't shown that VMware is in any way prepared for that change.

Copyright © 2016 IDG Communications, Inc.

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