VMware’s Cloudy Ambitions: Can It Repeat Hypervisor Success?

1. Summary

VMware is pushing an aggressive cloud computing strategy, but questions remain as to how successful the vendor can be in its quest to become the dominant player at every layer of the cloud stack. Whether it will succeed to some degree is not in dispute; rather, the real challenge will be repeating its early hypervisor dominance by getting a first-mover advantage in advanced virtualization and cloud deployments. While there are reasons to think VMware can accomplish this, plenty of evidence suggests the company might have to deal with a life where its market position is never entirely safe.

VMware certainly holds the technology pieces needed to fulfill its mission — hypervisor, management platform, dynamic tools, application platform, applications and even a public cloud presence. It can presently provide IaaS, PaaS and SaaS offerings, and continues to evolve its capabilities in all of these areas. Furthermore, its overwhelmingly large hypervisor footprint means there are hundreds of thousands of existing customers that will look to VMware for their cloud needs. Additionally, VMware’s large partner base makes it an even more-appealing option.

However, VMware’s cloud dominance is by no means guaranteed. For starters, its hypervisor market share is beginning to slip as organizations increasingly deploy competitive products in lieu of, or in addition to, VMware. With alternate hypervisors in place, VMware customers will at least look at those vendors (Microsoft, Citrix and Red Hat, among others) to provide additional cloud capabilities. Moreover, VMware is not the leader in public cloud computing, which means an uphill fight is in store for its vCloud Express program. Finally, cloud-management solutions from vendors — large and small — means organizations need not even choose a virtualization vendor to complete their cloud transitions.

In the end, it looks like VMware should expect to remain a leader — perhaps even the leader — as virtualization evolves into cloud computing, but the company should not expect to dominate. Research indicates that most organizations aren’t yet ready or willing to fully embrace cloud computing, but they will have no shortage of capable choices when they are. So despite its progressive vision, VMware’s days of 80 percent market share will be gone.