The Rock Band, the No-Brainer and the Home Run: A Story about Virtualization - InformationWeek

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1/8/2010
09:06 AM
Rajan Chandras
Rajan Chandras
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The Rock Band, the No-Brainer and the Home Run: A Story about Virtualization

What happened to VMware, once the darling of business and media? What's the story of virtualization over the past two to three years, and where is it headed (and how much of this story can be written in a blog)?

What happened to VMware, once the darling of business and media? What's the story of virtualization over the past two to three years, and where is it headed (and how much of this story can be written in a blog)?

The story of VMware is a minor variation on the classic story of the rock band: A little-known but daring group produces new and exciting sound that captures the audience's attention, and a nice little share of their wallet too. They get very successful. Then things begin to fall apart and the group splits, the lead singer going his (or her) own way. (Beatles? Check. Eagles? Check. The Police? Check. Genesis? Check. Chicago? Check. Wham? Check. Very dated examples? Check). The privately held VMware arrived to a sensational debut on the New York Stock Exchange in August 2007 with an IPO which was reportedly the strongest since Google (read my blog) -- a resounding success for President & CEO Diane Green, who had co-founded VMware some ten years earlier.Competition arrived only days later when Citrix acquired virtualization leader XenSource, but VMware and Greene -- clearly market and media darlings -- were flying high all through 2007 and early 2008.

Then, around June 2008, Microsoft released Hyper-V, it's "hypervisor" for server virtualization. By its standards, Microsoft was relatively quick to jump on the virtualization gravy train, and for good reason. Microsoft was already in the virtualization business -- remember, it has the best-selling operating system out there for years, and operating systems are all about virtualization. (I don't remember if I've already written on this, but if not, I'm aching to write someday about the confusion -- in my mind, and surely out there in the market - about operating systems vs. virtualization; where does one end and the other begin?) Using Windows OS technology to create application containers was a no-brainer, and I imagine Microsoft developers had a lark building this capability.

It's not clear if this was the trigger, but a month or two later, the VMware board (supported by parent company EMC) fired Greene, apparently for lack of "operational experience," replacing her with Paul Maritz, an executive from EMC. Simultaneously the bottom fell off the economy. Faced with internal and external turbulence, VMware suffered but dug in.

Meanwhile, in an interesting twist, virtualization -- in a sprint worthy of Rickey Henderson -- quickly rounded the bases and arrived home. Very few technologies have settled down so quickly in the enterprise, and the reasons aren't hard to find: proven technology (again, think operating systems) and quick-to-realize ROI (through server virtualization).

VMware is still going strong -- it recently acquired SpringSource to open up a bright future in cloud computing -- it just isn't that sexy anymore. (In July 2008, VMware stock high was around $80 and Citrix $37; today they are around $45 and $42 respectively.)

So, what's in store for 2010?

Well, it looks like virtualization and cloud computing are beginning to converge akin to neutron stars, with bursts of energy that have the power to shake up the world of computing. If that's the case, 2010 is when we see the first signs of that.

But for now, there's only so much that can be written in a blog.What happened to VMware, once the darling of business and media? What's the story of virtualization over the past two to three years, and where is it headed (and how much of this story can be written in a blog)?

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