VMware is approaching the kind of turning point that defines a company as either a brilliant success or a flash in the pan, and it's not entirely clear which way it's going to turn.
VMware has been king of the virtualization world for a long time and deservedly so. It didn't invent virtualization, but it certainly made it practical in distributed environments and did more than anyone else to popularize it.
It also built up the hunger for it among user companies to the point that a July re-release of a Yankee Group report (originally released in February, and updated at the end of last month to keep up with dramatic changes in the market), estimates that 75 per cent of all US companies are either using virtual servers now or plan to do so in the near future.
That fits with other reports-both quantitative and anecdotal-but the more telling bit is that 40 per cent of users surveyed plan to use virtualization products from more than one vendor.
Again, in a macro way, that's not all that surprising. The same thing happened with networking hardware, networking software, operating systems, high-end server hardware, network and systems management software, VoIP systems, email, databases, Web serving and nearly every other area of IT. First there's a pioneer and everyone uses its stuff; then there are imitators and users tend to pair off with one vendor or another; then users get tired of all that nonsense and demand the vendors support one another's products so customers don't get locked into the limited options available from one vendor, then all the weaker players get bought up or drop out of the market, leaving the strongest companies to compete using their ability to seamlessly integrate products from many companies, manage those products, and build on top of that a few top-end functions other vendors can't match easily.
It's a consistent pattern, but it's not a comfortable one for either the pioneer or its most dedicated or early adopting companies.
Right now, in Yankee Group's estimation, VMware is at the top of Little Big Horn wondering where all those Indians came from. That's not completely fair to VMware, considering that Custer was attacking against direct orders as well as common sense.
VMware isn't attacking anyone directly, but it's not doing much to defend itself or pick a new battlefield, either. It's just sitting there like a Chinese emperor relying for the Great Wall to defend the empire against Mongols who bribed their way through or disassembled their way over remote portions of the wall on the way to Peking.
China only won by accepting the Mongol conquest and civilizing the conquerors-changing the nature of the contest (probably unintentionally, it's true) by absorbing the invaders into their own culture.
In the computer business, Embrace and Extend (Smother and Subsume) is better assumed as a tactic for Microsoft to use against others, not one for others to use against it.
No matter how sincere its effort or pure its heart, it's hard for a manatee to smother a whale.
But VMware has a lot of advantages, but it's far from having a lock on everything having to do with virtualization, according to Yankee Group analyst Laura DiDio.
"VMware is only the market leader in server virtualization. We are still in the very early stages of other segments of the virtualization market: desktop (VDI), application, storage and network," she says.