At VMworld 2014, VMware Corp. CEO Pat Gelsinger outlined a typically aggressive plan for the company’s post-hypervisor future, based on four initiatives:  software-defined data center (SDDC), the vCloud Air hybrid cloud, an about-face on open source including Docker, Inc. and VMware Horizon Desktop-as-a-Service (DaaS). One goal of this strategy is to keep VMware at the forefront of IT technological development, and this plan is aimed at putting it in front of several major forces transforming IT, in particular cloud and mobile.

The strength of this plan is its flexibility. While each of these initiatives works from the base of VMware’s hypervisor dominance, and each supports the others, they are basically independent strategies. VMware brings all its strengths to the table, including its reputation for leading-edge reliability and customer support, and its history as a leading-edge technology provider. And it can draw on the extensive connections of its majority owner, EMC Corp., to reach customers it does not already have.

Despite those advantages, the company may need all the flexibility it can muster. VMware’s vCenter hypervisor was an instant technology leader because it answered a critical unmet need, and today it remains the unquestioned leader in the hypervisor market. However the new markets it is entering all have major competition, and VMware’s success is far from assured.

SDDC

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Of the four thrusts VMware is mounting, SDDC is most closely tied to the hypervisor and the one most likely to succeed. The company faces intense competition from Cisco Systems Inc. in the software-defined network arena and from IBM and others in software-defined storage. However, VMware’s NSX and vSAN products are strong contenders. More importantly, VMware is the only major vendor with a clear overall vision and technology suite to cover the entire hardware infrastructure, and despite competition it still has dominant mindshare in virtualization. These make it the clear favorite as the overall SDDC market develops.

vCloud Air

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vCloud Air is VMware’s hybrid cloud technology, running both on-premise and as VMware’s infrastructure-as-a-service (IaaS). However, the IaaS/hybrid cloud market is crowded with AWS the clear leader and Google set to launch an initiative. In addition, Microsoft Corp.’s Azure, IBM Softlayer, Hewlett-Packard Corp., Inc.’s Helion, Oracle Corp., Rackspace US, Inc., several large colocation services, the traditional outsourcers and a list of other smaller but still significant providers all weight into the mix. In order to survive, vCloud Air needs clear differentiation and some luck. So far it sounds like a “me too” service, thought, and that is unlikely to be good enough. VMware will need a clearly differentiated strategy, and even then it will have to fight a trench war.

Open Source

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VMware made a dramatic turnaround at VMworld, embracing open source at least in principal and Docker in particular. But beyond Docker, it’s unclear exactly how open VMware will become. In interviews on SiliconANGLE’s theCUBE video platform its spokespeople, including Gelsinger, never mentioned OpenStack, even as HP and IBM beat the drum about the value of that open source platform. VMware execs also didn’t talk about their major contributions of code, time and talent to the open source community. Nor did they clearly define a plan for incorporating open source technology into the core of their products.

Whether this commitment is real or just a one-off agreement of convenience with Docker remains to be seen. In the past, VMware has followed a traditional proprietary strategy, but now this may be hurting the company. For example, while vCenter dominates in the traditional IT market, the new hyperscale companies – Twitter, Facebook, Google and, most notably, Amazon AWS – use open source technologies wherever possible and specifically base their virtualization on KVM, the Apache open source hypervisor.

This will become an increasing threat to VMware’s core business as more compute loads move out of the corporate data centers to cloud providers. VMware needs a strategy to leverage crowd-sourced development for the core of commoditized technologies like hypervisors and cloud environments that open source provides, while it focuses on developing higher level services.

DaaS

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The final piece of the VMware strategy is Horizon, its DaaS virtual desktop infrastructure (VDI) in the cloud offering. CIOs have heard “this is the year of VDI” every year for more than a decade, yet this remains a niche market despite technical advances such as flash storage, which eliminates the “boot storm” issue that can slow large VDI installations to a crawl.

Mobile computing presents new opportunities. At least in theory, VDI can provide each user with his or her desktop on any device ranging from a traditional computer to a smart phone, with all documents kept in perfect sync at all times, and all data protected in the server so that the loss or theft of a device doesn’t create a major security issue. One problem is that VDI imposes the traditional keyboard/mouse interface on touch-screen mobile devices, and basic functionality often does not translate well.

Horizon has a compelling advantage that will break it out of the VDI ghetto, said Sanjay Poonen, EVP and general manager of end-user computing for VMware, in an interview on theCUBE. He claimed Horizon costs less per user than the fully loaded cost of buying and supporting a laptop.

Will that be enough? Today companies have several alternatives to delivering comprehensive productivity services to mobile devices, including software-as-a-service offerings designed for mobile, management packages like IBM’s MobileFirst and Windows 8 tablets that can run office tools natively on or off the desktop. Horizon, riding on VMware’s reputation for server virtualization and with its lower per-user price, may finally turn virtual desktop into a mainstream solution, but it is late to market and faces significant competition.

Conclusions

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The entire IT industry is in the midst of a revolution that Wikibon CTO David Floyer believes will see all compute and storage moving to hyperscale data centers in the cloud within a decade. Hybrid cloud is an intermediary step toward that eventuality.

In Floyer’s view, core software, including the hypervisor, is moving to open source, and this trend will continue to climb up the stack until even applications like enterprise resource planning will be open, running in the cloud, with all service and support provided by small teams of Ph.D. technicians operating in highly automated, software-led environments.

In this environment every business leader will be challenged. Survival for companies and individuals will require a combination of brilliance, creativity, determination and a healthy dose of luck. Gelsinger has created a strong plan for VMware that leverages its strengths against the opportunities it has available. Now it needs to catch a few breaks.

Image courtesy VMware

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