Feeds

Will VMware's sales double forever?

Ask Microsoft

Internet Security Threat Report 2014

Analysis My friends in the financial industry keep lobbing the same question - how long can VMware keep up its growth? The answer to that query revolves around Microsoft and how competent it decides to be.

VMware has doubled its employee count and revenue just about every year of its existence. Today, you find a virtualization software maker with about $1.2bn in annual revenue. In addition, VMware now has a market cap of more than $23bn, since it went public. The one-time niche vendor is worth more than Sun Microsystems and about as much as Adobe, according to the market.

Microsoft let this happen via a pair of bungles.

First off, it acquired the virtualization technology of Connectix in 2003. I saw a demo of Connectix's software right before this deal went through and figured it could realistically do little more than some minor desktop virtualization stuff. You know, running old copies of Windows or OS/2 in order to support equally old applications needed by the odd employee. Anyone familiar with both VMware and Connectix's server software knew Microsoft had no chance of making a serious data center play.

Microsoft, however, failed to realize this - big surprise - and banked on Virtual Server - its embodiment of Connectix - as a legitimate VMware rival. The charade survived for a couple years until Microsoft gave up and started handing out copies of Virtual Server for free to anyone who would take them.

Once Redmond figured out Virtual Server would not work as a long-term adversary to VMware, it started cranking away on a new hypervisor package code-named Viridian. This brings us to bungle two.

Bungle in the Jungle

Microsoft's top software engineers are rich - filthy rich. The only way Microsoft can keep them feeling good about working for a living is to let them crank away on whatever they want. As it happens, the software gurus chose to focus on the next version of Windows Server. There's far more fame, glory and self-satisfaction working on a product that will run on millions of systems than some niche - cough - virtualization code.

In my opinion, the rich developers missed out on the more pressing and compelling opportunity. It's nice and all to have a great version of Windows Server. But, geez, it'll be a pain when thousands upon thousands of customers touch ESX Server and all of VMware's management products first on their way to Windows.

Anyway, the downshot of the Windows Server focus was that Microsoft ended up with some mediocre folks hammering away on its virtualization technology, and we've confirmed this with people who know and are capable of judging all the major virtualization players.

Meanwhile, Xen has been boosted by the big brain on Cambridge University researcher Ian Pratt, while VMware has benefited from the skills of co-founder Mendel Rosenblum and tens of other top coders. We're talking about some of the very best people in computer science here because this virtualization stuff is tough.

With Vista and Longhorn Server consuming Microsoft's top talent, the company thought it could wait until 2008 to really ramp the virtualization work. Big mistake.

VMware now owns a massive market share lead in the server virtualization space, has built out the broadest available set of management packages and can use its IPO funds to buy talent and technology.

Beginner's guide to SSL certificates

Next page: Microsoft's Way Out

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
Symantec backs out of Backup Exec: Plans to can appliance in Jan
Will still provide support to existing customers
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.