September 02, 2009

Pondering VMware and the Road Ahead

Monday was the beginning of the weeklong virtualization love fest known as VMworld 2009. Although the exposition did not start until Tuesday, Monday was a day of tutorials, preparation, and an industry analyst event where VMware parted the corporate kimono for us market watchers to gaze inwards on the company’s present and future plans.

While certain announcements will be made during this week, other content that will remain NDA for the near future; nevertheless, it is always enlightening to hear directly from company executives their assessment of the corporate strengths and weaknesses, as well as their big picture vision for the company. Happily, there was plenty of information and perspective shared, even when it challenged the presentation schedule.

Not surprisingly, VMware extolled the virtues of virtualization, and its market success especially in the upper echelon of the marketplace. At the same time, the company recognized that its lowest hanging fruit, x86 server virtualization, is starting to mature in the marketplace, and that a hypervisor alone does not make for a long term corporate revenue growth strategy. Hence, there is a market imperative for the company to move beyond the tactical achievement of server virtualization and consolidation towards a strategic position of extolling the business benefits of virtualization.

Given the growing market position of Citrix/Xen and Microsoft, it is clear that VMware needs to maintain a competitive differentiation that exceeds being a supplier of a software hypervisor. At the same time, hardware based hypervisors such as IBM’s Power based CPUs are continuing to push the performance envelope and questioning the assumption that an additional software hypervisor is needed to support Linux workloads. Many x86 Linux binaries can run well in emulation on most any current vintage System p or i.

To VMware’s credit, the company has outlined several initiatives that seek to elevate the discussion of virtualization to a higher level, to include the often-overlooked components of any virtualization solution, including storage, networking, management, security, compliance, provisioning, scheduling, and monitoring. Informally, the company is beginning to refer to its approach as the “software mainframe” (with the requisite disclaimers). Although it is hard to imagine an array of virtualized x86 systems providing the same technical achievement as the System z, the notion of the reducing the complexity while increasing the agility of the datacenter remains laudable. Nevertheless, we applaud VMware's vision and realization that there is much more to virtualization than server consolidation. Abstracting the view of the datacenter to a set of all encompassing virtual services proffers many benefits to not only IT professionals, but to end users within the organizations.

At many levels, the concept of what VMware executives were touting as The New Age Desktop makes sense. The notion that desktops are virtual environments that are delivered through a catalog of IT services on demand undoubtedly has great appeal to IT professionals, and with the correct positioning and user empowerment, could address many of the functional needs within organizations. If the desktop is truly a portal to applications, then it matters little where the application, processing power, storage etc., resides. Yes, there are compliance and religious issues that may affect this, but these are not functional issues. Moving away from dedicated thick client access devices can help turn hardware management issues into service and scheduling issues, which are typically simpler and less costly to address.

As rational and “simple” as this all sounds, it is also a very familiar refrain that depending upon the year could be associated with the Network Computer, NetPC, Windows Terminals, Thin Clients, ASPs, RDP, Consolidated Client Infrastructure, and list keeps on going. The mantra of centralized computing is well understood by IT. The cost effectiveness is well documented. Now vendors are telling us that clouds will solve all of IT’s problems by centralizing computing and abstracting software from hardware; clouds will provide a simplified, consolidated, cost effective IT solution that will make things simple, and we won’t have to worry anymore. Yet, despite all of this, a quick gaze across the IT landscape does not show that centralized computing has toppled distributed computing.

So what’s the problem (it if were only that simple)? The problem is that there is not a single problem. IT is an amalgamation of resources deployed across a considerable stretch of time and in most cases reflects the intersection of the business needs of the moment and the limitations of the technology marketplace at a given point in time. Even though the TCO and ROI metrics favor much of the approach posited by VMware, this is a huge undertaking for most any organization. One that will for a variety of reasons will be incremental in nature, and likely take years to acheive.

The other issue is easy to paper over at the high level, but practically is much harder to budge, is the role of existing legacy systems, especially in the mission critical applications. It is clear that interconnectivity of the legacy with the new will be paramount for success. Some of the current Cloud Computing FUD would cause one to believe that the legacy will simply disappear, but we believe reality will take a far different path. While Cloud Computing, whatever it is or is believed to be any given moment, may develop alongside existing IT investment, it is doubtful the cloud will subsume all of IT in its current form.

Hence, not only is there an internal rationalization, virtualization, and simplification path to be followed, but it will be complicated by the degree of interconnection with the even less well defined abstraction known as the cloud. As IT of the here and now illustrates so well, it is difficult to maintain order over physical (and to a lesser extent) virtual beasts that are we well defined and understood. It is a much more perplexing challenge when one of the major components of the IT strategy, the cloud, is comparatively poorly defined and understood.

Overall, the challenges for VMware, or any vendor for that matter, to elevate virtualization from a tactical cost saver to a strategic business imperative are clear and substantial. That is the bad news, but it is also the good news. For a software vendor, there are few better opportunities than a difficult challenge that is waiting to be solved. However, this next step down the virtualization path is immensely more complex and hence risky than the relative ease of tactical virtualization and consolidation that has made the company so successful. It would seem a tall order to expect that all of the past “sins” of IT, and IT related business process would be cleansed from the modern enterprise by its wholesale investment in the latest and greatest “scale out” application development models on virtualized x86 platforms. However, given its competitive prowess to date, we expect that VMware will give this its best shot, and that the marketplace and IT consumers overall will be better off for it.

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