VMworld 2010 Eve – Day 0

August 31, 2010 at 12:52 am Leave a comment

Sandra Glaser Cheek – Director, Client Services

Last week I sent my three kids back-to-school after an 82-day long weekend. Phew. Multiple trips to Target and Staples for school supplies usually mark the end of summer for me. But now, in hindsight, working closely with VMware for the past couple of years, it seems the amount of work, and the furious pace in which VMware employees are working, VMworld also marks the end of summer and the beginning of the fall tradeshow season.

Fall is the season when we start to hear of acquisitions and bold moves in the tech vendor community, and new visions and ideas that get us excited. Now that the kids are back in school, and VMworld is ready to open, we are ready to pay attention. Here are some thought I’ve gathered from the blogosphere industry about what are likely to hear at VMworld 2010 this week:

Op ex is the new cap ex

VMware virtually (no pun intended) owns the franchise on the cap ex value prop, having proven that the hypervisor is unequaled when it comes to containing server spending.  Have you noticed that CEO Paul Maritz has been placing significant emphasis on the op ex side of the equation in his speeches? Two reasons that I’ve read:

–       Compute capacity that is made available by the hypervisor – it’s quickly filled in with new machines. This has resulted in a flood of the number of machines that need IT management… and an explosion in operating expense.

–       IT cap ex represents less than 30% of overall IT spending.  This means that a bigger share of cost savings is operating expense – something that keeps CIO’s awake at night.

Business value is re-emphasized

We are so inundated with “business value” messages from vendors, that we tend to zone out during these speeches – blah, blah, blah. These presentations drag on and on and we lose sight of the very thing the presentation was meant to convey – delivering “value” to the business.  At VMworld, we will likely hear Maritz continue his mantra that business value resides in apps – not ops. Typical IT organizations usually stand in the way of the value that IT Ops enable – value that originates in internal, commercial or open source development departments. Efforts are usually slowed to a crawl because of bureaucratic processes. This traditional way of managing IT operations will have to change for VMware business value to be optimized. At tomorrow’s keynote address, expect the business value conversation to be front and center—let’s hope that it’s with more excitement than we are used to.

Virtualization price wars

VMware retains its dominant market position, but its competitors are now experiencing the heady growth VMware enjoyed three years ago. In IDC’s Q4 2009 Server Virtualization Tracker, VMware ESX was still firmly in the top spot, followed by VMware Server. Total VMware licenses also increased 19% compared with the previous year. However, Microsoft Hyper-V, while third in line for overall market share, grew 215% year over year. Citrix XenServer, fifth in market share behind Virtual Server 2005, also grew that quarter by 290%.

VMware doesn’t deny that the price tag of its virtualization software is higher than its competition. VMware has long argued that vSphere, and the related management tools are so efficient that the total cost of ownership is actually the best in the industry – when measured on a per-virtual machine basis.

Microsoft’s Hyper-V may not be a feature-to-feature match with rival VMware’s ESX hypervisor today, but with each new version, it’s getting better. The trouble for VMware is that, in some cases, Hyper-V is “good enough” For customers, and it’s tempting at a lower price point.

VMware hasn’t thrown in the towel. With recent licensing and pricing changes, VMware has improved its competitiveness in the SMB market where Microsoft threatens most. It will be interesting in this SMB space to hear if this approach is tailored enough to the low end of the market and if it will be enough for VMware to maintain its lead.

Private and hybrid clouds – continued…

We’ve heard this for the past couple of VMworlds, and we will continue to hear it this year. The rise of public cloud services like Amazon and Rackspace have demonstrated a new standard for cost-efficiency and responsiveness that have forced IT to rethink how they measure their own performance. In the past, enterprise IT may have survived with incremental performance improvements year over year. But the game has changed, and IT organizations are held to a higher standard—a standard that is now being set by public clouds. That’s why IT is so keyed up by promise of private and hybrid clouds – and the self-service private cloud.


Automation and IT management

A big part of this change will be with next-generation approaches to automation. Today, business can be forced to wait for weeks, months or longer for applications to move into production. And, by the way, any changes to production software are unwelcome. Change wreaks havoc on the data center and its management. This means slow and costly IT, and that’s the motivation behind the strategic automation investment we’re seeing with so many IT vendors lately—new classes of automation reaching far beyond yesterday’s approaches.

Mergers and Acquisitions

To continue to moving at the warp speed that that VMware has been traveling, we are likely to hear of more mergers and acquisitions that would help to round out IT-as-a-platform, and the SpringSource and Zimbra stories.

Partnering – focus is on selling

There won’t be a dedicated “Partner Day” at VMworld this year. Instead, there will be a few sessions geared towards VMware partners available during the conference. With its move to a competency-based partner program, and passed deadlines to qualify, VMware is serious about investing in their partners who have already made the commitment. The partner track is designed especially with targeted content to help build expertise and accelerate sales of VMware solutions. There is a heavy focus on positioning and selling VMware. There will be 20 partner-focused breakout sessions to help partners position and sell VMware solutions.

What else do you expect to hear this year?

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