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VMworld 2018 – Industry Snapshot

Published September 7th, 2018. In this Industry Snapshot, John Webster, Sr. Analysts, discusses the major announcements and takeaways from VMworld 2018. Download this free report now!

VMworld 2018

VMware 2018 drew a crowd of approximately 20,000, down from last year’s attendance of 30,000. Once again, vSphere took a back seat at this event while VMware showcased other virtualization technologies, products and services that it showcased at the Mandalay Bay Las Vegas Convention Center.

Significant announcements:

Acquisition of CloudHealth and its cloud operations platform that functions across AWS, Microsoft Azure, and Google Cloud Platform (GCP) with 3,000+ global customers—a sign that VMware will be a serious contender in the Cloud Management Platform arena.

Future support for Amazon Relational Database Service (Amazon RDS) on VMware—a service to facilitate customer set-up, operation, and scaling of RDS databases in VMware. Once instantiated, customers can migrate databases to AWS or the VMware Cloud on AWS hybrid cloud environment. Amazon RDS on VMware will support Microsoft SQL Server, Oracle, PostgreSQL, MySQL, and MariaDB databases and will be available early 2019. Can it also encapsulate?

A 50% reduction in the entry-level price VMC that is coupled with support for a new minimum configuration for which is now a three-host minimum (previously four). For a limited time, VMware will offer the 3-host environment for the cost of a 2-Host configuration. In the near future, VMware executives advised that the move is in anticipation of a two-host minimum coming sometime next year. In essence, customers have the ability to leverage the three-host minimum at a two-host price. However, this will change again when the two-host minimum is announced. Note that this move is not an actual price reduction in the cost of a host, but rather a temporary discount based on bundling three hosts for the price of two.

A new high-capacity storage option for VMC, backed by Amazon Elastic Block Store (Amazon EBS). VMC customers can independently scale compute and storage resources resulting in cost reductions for storage capacity-demanding workloads. New AWS clusters will deliver high capacity storage capabilities with VMware vSAN utilizing Amazon Elastic Block Storage and run on new Amazon Elastic Compute Cloud (Amazon EC2) R5 bare metal instances.

Also Noteworthy:

Open Source Project Concord—introduced as a decentralized trust infrastructure for blockchain as opposed to a centralized trust environment where one agent acts as a single point of validation and control.

Wavefront—acquired last year as Watford, Wavefront adds to VMware’s Cloud Management Platform services as a real-time monitor of data center infrastructure

Project Dimension—a service for integrating edge-to-core data center computing environments such as IoT. It is fully managed by VMware using a hybrid cloud architecture and delivered to the customer’s data center on an HCI platform running VMware Cloud Foundation.

Project Magna—continues VMware advancement of the software-defined data center (SDDC) by modeling, testing and reconfiguring a network for optimum performance based on AI technology.

VMware ESXi on ARM—was demonstrated as another thrust at edge computing. VMware will focus on selected embedded OEMs to scope and explore opportunities for ESXi on ARM-enabled offering at the edge.

Evaluator Group Take

VMware vSphere is a well-established franchise, but at VMworld 2018, as in previous shows, VMware continued to feature the many ways in which it is building out its product portfolio while leveraging its vSphere base. NSX was once again featured prominently in keynotes—software defined networking for vSphere users. VMware Cloud Foundation (the integration of vSphere, NSX and vSAN) for private and hybrid clouds was also highlighted. A question that remains however is whether or not these product adjacency efforts will ultimately produce meaningful results. As reported at the show, there are now approximately 15,000 vSAN users—up significantly from the 8,000 reported at last year’s show. However, the 7,500 NSX users as of today is roughly the same number as last year. And in spite of the fact that VMware Cloud Foundation is now in version 3.0 which was announced at the show, an executive stated that it was in use by only 250 customers. Remember that the vSphere customer base totals approximately 300K users.

A second question is in regard to VMware’s overall cloud strategy and whether or not one exists. We believe that VMware is more interested in pushing distinct products into private and hybrid cloud use cases on a product by product basis than defining an overall cloud strategy. Consider VMware Cloud Foundation as an example. It can be licensed separately by customers as a software-defined, cloud Infrastructure as a Service (IaaS) solution, or offered as a managed service where Cloud Foundation forms the support structure for VMC. This is where we believe a much better opportunity exists. It was clear from conversations with VMware executives and customers that disaster recovery/business continuance was the “killer app” for VMC. One customer we heard from related how his IT organization had automated reliable DR testing on VMC—something that would have taken months if not years to do without it. Another attraction for him was the fact that the DR site—in this case AWS—was fully staffed and able to respond quickly when issues arose. We have also heard of significant interest in VMC by users we have interviewed in conjunction with our primary research studies. We conclude that VMware’s cloud strategy is more of an exercise in figuring out the best routes to market and following them.

As a final observation, we see VMware executives closely watching the advancement of containerization within enterprise IT coupled with Kubernetes as a container management environment. Here, VMware wants to turn a disadvantage into an advantage by leveraging its 300K customer, IT operational dominance. For a number of reasons, developers are increasing their reliance on containers and associated development tools. This represents a shift in the center of gravity for VMware toward developers and, by extension, Red Hat OpenShift. VMware executive now know that they must respond to that shift and boost their standing with developers. They make the case for using VMs to more efficiently manage containers for example and embrace PKS, the collaboration of VMware and Pivotal Google to develop the VMware Pivotal Container Service. As we noted in last year’s VMworld review, the objective of PKS is to deliver a purpose-built solution to operationalize containers on Kubernetes for enterprise IT and service providers. The pitch to customers here is to present a containers/Kubernetes platform that is ready for enterprise IT production environments that can be managed by operations in ways they feel comfortable with.

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