The annual VMworld conference ran from Sunday August 28th through Thursday September 1st 2016. Evaluator Group participated in keynotes, industry analyst sessions, general sessions and 1-on-1 meetings with VMware.
VMworld is one of the largest single vendor conferences held annually, drawing over 22,000 attendees. The technology sessions presented by VMware provide excellent details on new technologies to VMware’s installed base. VMworld is also a premier storage event, with over 1/3 of the vendors participating showing storage or storage-focused products.
Pat Gelsinger outlined VMware’s vision of the future of digital business and the role that software-defined infrastructure will play in delivering new business models.
Two aspects of this vision include VMware’s Cloud Foundation and Cross-Cloud services along with VMware’s partnership with IBM to enable hybrid cloud adoption. A tag line reiterated throughout VMworld was “Any Cloud, Any App, Any Device,” capturing the essence of VMware’s cloud strategy.
The pending merger between VMware’s corporate owner, EMC and Dell was also briefly discussed, stating that VMware would remain as an independently operating entity.
Gelsinger gave a little history lesson on the origins of the term “cloud” and discussed its adoption as the world has embraced the cloud as an alternative to traditional infrastructure.
2006 was the year Google bought YouTube and the year he said the cloud was born. He played a clip from a presentation that CEO Eric Schmidt gave at a search engine show 10 years ago describing Google’s core vision. In this address Schmidt coined the term “cloud computing” saying “data centers and servers should be a cloud somewhere”.
Gelsinger showed a timeline of Global IT Workloads and where they were being run – but didn’t give the source of this information, however:
2006 – 29M workloads, 2% in public cloud, there was no private cloud
2011 – 80M workloads, 7% in public cloud, 6% private cloud
2016 – 160M workloads, 15% in public cloud, 12% private cloud
2021 – will be the tipping point between traditional infrastructure and the cloud
– 255M workloads, 30% in public cloud, 20% private cloud, 50% in traditional IT
VMware is clearly focused on shifting revenue from VMware’s traditional sources to new items that will continue to hold competitive advantages. VMware stated that in 2013, fully 65% of their revenue was derived from their vSphere hypervisor product, while in 2016 they expect vSphere to constitute only 30% of their revenue.
VMware stated their primary areas of strategic and revenue, focused in the new “digital business”, will be the following:
VMware has traditionally used VMworld to roll out new releases of their major products. However, starting in 2015, VMware was not able to release new products to coincide with the show. As a result, the VMworld event is now “out of phase” with VMware’s software releases, leaving the event feeling somewhat anti-climatic. VMware would not commit to specific release dates, or even versioning of upcoming releases in public. However, it is anticipated that the next version of VMware products will be release 6.5, with general public availability in Q1 of 2017.
In discussing new products, VMware continued the pattern of expanding their portfolio by adding products into a newly named suite. VMware’s upcoming suite will be known as “VMware Cloud Foundation” consisting of the following components:
A major announcement around managing multiple clouds is known as “Cross-Cloud Services.” Additionally, VMware and IBM announced that IBM is licensing the Cloud Foundation suite to provide IBM SoftLayer hosted cloud services.
VMware provided a demo of their forthcoming SDDC Manager product, which highlighted the ability to manage virtual machines in multiple cloud environments. VMware plans to support managing application environments that reside in multiple cloud environments, including:
VMware’s “Any Cloud” strategy is delivered via the previously mentioned support for VMware and 3rd party hosted cloud environments. VMware’s vision is to “Develop the control plane for IT that spans disparate clouds, which have become the new data-center silos.” Their cross cloud strategy is now the focus for embracing public clouds, rather than VMware hosted vCloud Air datacenters.
In support of their “Any App” strategy, VMware is actively attempting to mitigate the potential disruption of containers, by surrounding containers with VMware infrastructure. VMware is continuing focus on their Photon container platform, which will share management tools and APIs with vSphere, thereby allowing IT administrators and developers to support both fully virtualized VMs, alongside containers using the same set of (VMware) management tools and interfaces.
In order, to fulfill their claim of “Any Device,” VMware is continuing to focus on mobile and other end user computing components of their View, Horizon and other elements.
VMware is faced with several challenges:
VMware has privately acknowledged all of these challenges and is actively working to address these issues to the degree they are able. With respect to diminishing revenue from hypervisors, VMware has diversified their revenue substantially over the past four years, and could conceivably operate profitably without any revenue from hypervisors. This mitigates challenges from Hyper-V and KVM and to some degree reduces much of the impetus driving containers.
To the extent that containers are preferred over fully virtualized OS environments, VMware’s strategy of expanding their management and APIs to support containers should help to mitigate the revenue impact of container managers such as Docker, Kubernetes and a myriad of other entrants.
Although VMware did their best to downplay the Dell EMC acquisition, there was clearly a level of anxiety expressed by many of the attendees. Despite Dell and EMC’s claims that the merger will not impact VMware, this claim remains to be proven.
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