As hypervisors move toward commodity status and competitors Microsoft Azure and open source KVM (Kernel-based Virtual Machine) gain market share, VMware presented a vision of its future at the VMworld conference last week based on four initiatives: the software-defined data center (SDDC), open source including Docker, hybrid cloud, and virtualized desktops.

SDDC

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The most obvious opportunity for VMware is SDDC. It builds directly on top of vCenter, with VSAN in storage and NSX network virtualization, which came from the Nicira acquisition in 2012. “The dam broke six months ago, and we’ve arrived” with a $100 million run rate and “wins in every vertical,” said Martin Casado, Nicira co-founder and VMware Networking SVP and general manager on theCUBE. He said the turning point came when VMware released an NSX version that supports vSphere and “has most of the bells and whistles users want” nine months ago. Since then it has announced partnerships with several industry players including Hewlett-Packard Co. and Arista Networks, Inc.

NSX faces stiff competition from Cisco Systems, Inc., whose Application Centric Infrastructure (ACI) takes a different approach to network virtualization, and the competition may be slowing market acceptance of both systems. Network virtualization is lagging behind server and storage virtualization, said Howie Xu, senior director of engineering for Cisco’s Cloud Networking and Services Group on theCUBE. Scott McIsaac, CTO of Secure 24 said the fight between Cisco and VMware over software-defined networking is freezing the market. And during the final wrap-up of theCUBE’s coverage, Wikibon Principal Research Director Stuart Miniman said he had talked to a CIO whose shop used both VMware and Cisco and who said, “I won’t buy software-defined networking until they stop throwing stones at each other.”

Embracing open source

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VMware also advanced its embrace of open source software with the announcement that it would support Docker, an open-source application container. Docker is sometimes portrayed as a potential disruptor for VMware and the virtualization market in general. However, spokespeople for both companies portrayed the technologies as complimentary. VMware is focused on traditional stateful applications, while Docker works with the new stateless, Web-based applications, said Wikibon CEO David Vellante. VMware’s decisions to support Docker was a smart move, he said, allowing containerized stateless applications to run on premise in enterprises on top of VMware.

“Third-generation developers see containers as a cool way to package applications over time,” said VMware CEO Pat Gelsinger on theCUBE. “If that is how people want to deliver applications, then we want to be there: Containers without compromise on top of VMware.”

The move is also good for Docker, said Chris Wolf, Americas CTO for VMware and a former Gartner analyst. Docker focuses on the application and does not touch the underlying infrastructure. With stateless applications running on the public cloud, the underlying IaaS platform supplies those services. The same applies on-premise, where VMware can provide those underlying services and shield the container from the infrastructure, he said. This can also allow developers to use Docker with on-premise stateful applications.

Regarding the larger issue EMC’s and VMware’s somewhat reluctant embrace of open source technology, Wolf said customer defection isn’t a worry. “Our SDDC value proposition is so compelling we will win that stack on merit,” he said. “Customers won’t pull out of SDDC because they won’t want to, not because they can’t.”

Ed. Note: This is the first of a two part series on VMware’s transition plan as outlined at VMworld 2014 on theCUBE. The second part covers vCloud Air and VMware Horizon Desktop-as-a-Service.