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With VMworld 2015 approaching, taking stock of VMware

VMware has been pushing into new markets and making key acquisitions, but has the company lost its innovative edge?

As VMworld 2015 draws near, it's a curious time for VMware in many ways.

To casual observers of the company, all seems right with the world. New products continue to roll out at a steady pace, major updates to venerable offerings are released to great fanfare and the revenue train keeps on chugging along.

VMware once rode the wave of its own innovations -- the bare-metal x86 hypervisor and the ensuing infrastructure management products -- to capitalize on its first-mover advantage and entrench itself with most IT organizations. It's been a constant refrain that VMware is not the same forward-looking company that wowed IT with a stream of ground-breaking technologies such as vMotion and vSphere High Availability.

Times have changed as hypervisors, namely Hyper-V from Microsoft, have matured and chipped away at VMware's lead. Many are saying the company has been on cruise control and seems content to make waves through acquisitions -- namely Nicira and AirWatch -- or to follow the crowd and develop support for products that have gained popularity, such as Docker.

Buffeting this case are the recent series of protective moves: releasing an OpenStack distribution, starting vCloud Air so vSphere-based enterprises could go to the cloud or releasing a software-defined storage product in VSAN after seeing its partners find success with their versions.

In the IT circuit, the company's business practices have been criticized along with its hefty fees. Want network virtualization with NSX? That will run you $5,995 per CPU. Do you like the storage pooling and other perks in VSAN? That's $2,495 per CPU. Fault Tolerance now supports four vCPUs in vSphere 6 -- but that's only available if you can afford vSphere Enterprise Plus, which retails for $3,495, and doesn't include the support fee.

VMware certainly hasn't endeared itself to its customers with the vTax, changes with certifications, removing products without clearly viable alternatives (e.g., vCenter Server Heartbeat), problems with single sign-on in vSphere and the seemingly never-ending saga of the roundly despised vSphere Web Client.

If you're a Linux shop that wants to work exclusively in the vSphere Web Client, there's still some hoops you need to jump through. VMware has been pushing its Linux-based version of vSphere, but the vCenter Server Appliance still requires a Windows VM to run vSphere Update Manager. It's these types of moves that have paying customers feel more like beta testers who have to find workarounds when certain features should have been baked in to the final product.

What is worrisome is VMware continues to aggressively expand into other areas and doing battle with a whole host of new foes. It's not a stretch to say VMware's EVO:RAIL hyper-converged infrastructure offering has been a huge disappointment that tripped out of the starting blocks. Initially, customers had to buy a vSphere license -- even if the business had an existing license it could apply to the unit. Critics have pointed out EVO:RAIL's lack of configuration flexibility -- you must buy an appliance consisting of four nodes -- its limit of 32 nodes, and the lack of key functionality due to running on an older version of VSAN. In the first release, the node count topped out at 16; meanwhile, Nutanix touts no maximums but has a recommended node limit of 64. In one telling example of how EVO:RAIL has fared, HP didn't start shipping its EVO:RAIL appliance until the first quarter of 2015 -- and dropped it by the third quarter.

With VMware's recent move to the public cloud, it steps into an arena dominated by Amazon with strong offerings from Microsoft and Google. Does VMware have the resources to compete in these new spaces where Microsoft has more money to throw around? Microsoft has roughly $100 billion in cash and investments. With that kind of bank, it shrugs off slip-ups like the Windows RT tablet and Nokia acquisition.

It's not far-fetched to say Microsoft will continue to pour more financing into making life difficult for VMware. If a hyper-converged infrastructure startup such as Nutanix can turn heads with a simplified approach to infrastructure management, who's to say that won't inspire Microsoft to redouble its efforts to refine its server virtualization platform and push VMware out of the market? It's been a running complaint for many in IT that vCenter Server has not kept up with the changing needs of today's administrators -- needs that are being addressed by more aggressive challengers.

As far as VMworld predictions go, the safest bet is there should be something more solid on the EVO:RACK hyper-converged offering. This "big brother" to EVO:RAIL was announced at VMworld 2014, but it has remained cloaked in technical preview for the past year. VMware touted it as an option for larger enterprises that want to scale out multiple racks for heavier requirements, such as a big VDI deployment, or for cloud-service providers that need compute and flexibility. It remains to be seen if VMware has learned from its EVO:RAIL experience -- and taken cues from competitors -- to avoid a similar situation.

VMware has nothing to worry about in the short term. It continues to dominate the market thanks to the vSphere platform and has a well-earned reputation in the enterprise for its ability to virtualize mission-critical applications and revolutionize how IT manages resources. VMware is looking ahead and going big by driving significant resources into its cloud offerings, such as VMware Integrated OpenStack, and has several container-related technologies either already available or simmering in the background. VMware has the resources to remain a viable presence for many years to come, but it would behoove the company to take a step back and hear what its customers have been saying before its hopes for longevity in the marketplace slip even further away.

Next Steps

What to look for at VMworld 2016

This was last published in August 2015

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