• 07/19/2013
    12:01 AM
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Don't Count VMware Out In Rough Seas

Wall Street analysts and pundits are busy talking down VMware, but the virtualization pioneer is going through a cycle from which it's likely to bounce back.
What about all those exec departures, particularly Rick Jackson, VMware chief marketing officer, to Rackspace, Tod Nielsen to Salesforce's Heroku, and Bogomil Balkansky to Diane Greene's stealth startup? Jackson was associated with, probably against his will, selling the "vtax," VMware's untimely vRAM pricing change in 2011, which VMware later rolled back. When a new regime comes in, and you're associated with an old failure, you move on.

Tod Nielsen, a business executive who knows the ins and outs of dealing with software developers, always had other opportunities. The shift of both himself and his friend Paul Maritz to the EMC/VMware spinoff, Pivotal, provided him the impetus.

The bright and versatile Balkansky's move is more of a mystery, until he decides to talk about it. Getting word to him through third parties does no good; he's not ready to talk.

The departure much earlier of CTO Steve Herrod was a monumental loss, one that, if I were new CEO Pat Gelsinger, I would have tried hard to avoid. But losses in the business world are inevitable, sometimes for good reasons, sometimes for bad. Herrod was a grad student of VMware founder Mendel Rosenblum's at Stanford; they worked on the SimOS and other key projects together. He had already been through one wrenching transition when Rosenblum's wife, Diane Greene, was replaced by Maritz, and Rosenblum departed soon after. But it's a tribute to the quality of people attracted to the early VMware that Herrod, the moment he choose to leave, could have gone anywhere he chose.

Companies change as they mature; people come and go, frequently in cycles. VMware will weather the cycle but it will need to make up its mind what kind of company it really is. To survive and prosper in the emerging cloud computing era, it will have to be more than a vassal of EMC. It will need to understand its core strengths and pursue the opportunities associated with them in a highly disciplined fashion.

Can it do so under new CEO Pat Gelsinger? I think so, but VMware must refocus inside the data center and get over its fear that failure to provide cloud services dooms it to be trampled by Amazon and other cloud suppliers.

The cloud will grow and many workloads will migrate there, but many will remain inside the data center. Modernizing data center operations, taking all the data that will flow out of vCenter Log Insight and pouring it into vCenter Operations and vSphere for intelligent use should occupy VMware's attention for the next 18 months.

When VMware announces it's a cloud vendor, it's sailing into stiff headwinds produced by powerful vendors that have grown up in the cloud. As it fails to live up to its own expectations, skeptics paint a dire picture of what happens next. But VMware customers have confidence that VMware will continue to innovate in the creation, deployment and management of virtualized resources. It seems possible to me they will convert some of their compute resources to Microsoft Hyper-V or open source KVM, then ask VMware to manage them as well.

VMware is heeled over by competitive winds -- and possibly too much of the crew leaning toward the cloud side of the ship. To bring this vessel back on course, VMware must go back to fundamentals, refocus on converting the enterprise data center into that flexible asset of the future captured in the phrase "software-defined data center," and move forward from there. Cloud computing will still be there. VMware customers will figure out how to make use of it without abandoning VMware.

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