I ran into an article on eWeek this morning by Steven J Vaughan-Nichols, entitled Is VMWare a Dead Duck? I feel the need to respond. It isn’t just that I disagree, it’s that the argument used to support the proposition merits discussion and analysis. This is the argument, summarised:
Many companies and Open Source development groups are now offering “free virtualization”. Products include Xen, Open VZ, KVM, Virtual Box, UML. Red Hat is entering the fray with Red Hat Enterprise Linux 5.1. So is Oracle, with a free Xen based offering. Dell is even bundling Xen with its PowerEdge servers and here comes Microsoft with Server 2008 which has its very own (bundled) hypervisor. So, as soon as the market understands that you can have virtualization for nothing, “VMWare est le canard mort”.
No, it’s not.
The problems with this line of reasoning are:
- The “apples v oranges” comparison. The confusion arises from the term “virtualization”. There are a whole variety of virtualizations - Dan Kusnetzky explains this well on ZDNet with a simple diagram. VMware is involved with only some of these. The original VMware proposition was to partition a server and run different instances of an OS in the partitions. Xen does this. IBM has been doing it for years on the zSeries. If that was all that VMware delivered then it would indeed be threatened by the rash of free capabilities that are emerging. VMware delivers more.
- Commodity Markets. Free software stands a better chance of dominating in a commdity market. Even so, Microsoft’s Windows OS and Office Software is surviving the attack of free products even though, in many circumstances, the products are close to commodity status. There is a whole crowd of free databases, including the ubiquitous MySQL. Neverthelss, Oracle, Microsoft and IBM still do very well out of database market. Virtualization is NOT a commodity.
- Free software isn’t exactly free. Free software is only free if it involves zero implementation effort and zero operational effort. Attacks on dominant vendors by free offerings rarely eliminate the value that large enterprises place in the dominant products. VMware’s primary market is the large enterprise, where the intelligent use of virtualization can save dramatic amounts of money over time. The savings dwarf the license costs of VMware’s software. Importantly, VMware’s value proposition scales. If you want to virtualize a handful of servers, then maybe the free products are competitive or even better. If you want to manage virtualization across a server farm, it’s VMware.
- VMware’s stock market value. VMware is on a roll. The stock market believes it’s worth $34.99billion even though it has revenues of just over a billion. That’s a huge multiple. The stock market gets things wrong sometimes, but there are reasons why the valuation is so high, beyond VMware’s growth rate of nearly 100%. Many observers see VMware as challenging both Linux and Windows on the server. After all it VMware not Linux or Windows that’s doing the job of using computer resources effectively.
- The Resource Space OS. VMware is gradually evolving from being a virtualization capability to being the Resource Space OS - in effect the strategic item of software that manages the whole resource space, including both clients and server, grids and partitions, storage and access. I know. It has a long way to go to do this, but it is streets ahead of the virtual competition. The way I see it, it will be difficult for any vendor to catch VMware and its core team of engineers.
VMware is neither dead, nor wounded, nor even out of breath. And a duck, it is not.
