VMware is figuring that what worked for Microsoft in the 90s, as it grew from a pigeonholed provider of PC operating systems into a diversified consumer and enterprise software powerhouse, still works three decades later as it builds a comprehensive portfolio of enterprise infrastructure and application software.
Banking on a time-honored business strategy, VMware is piecing a mix of home-grown and, more often lately, acquired technology into an integrated foundation that delivers on its stated strategy of providing all the tools necessary for enterprises to build, run, manage, connect and protect applications and infrastructure, regardless of where one chooses to run them.
VMware CEO Pat Gelsinger used his opening VMware keynote to reprise a strategy that has remained remarkably consistent over the past few years, before diving into the significant changes VMware is making to its core infrastructure management software to address the changing application development and operations environment (see my coverage of VMworld Day One and its container strategy here). While discussing the company’s recent Q2 2020 earnings report, here’s how Gelsinger described the situation that has led the company to acquire seven companies since VMworld 2018 (emphasis added),
As digital transformation accelerates in enterprises, we see three secular trends becoming stronger. First, multi-cloud is the new model for enterprise IT. Second, digital transformation is driving accelerated pace of cloud-native app development. Last but not least, as businesses move applications to the cloud and access it over distributed networks from a diversity of endpoints, security has become a significant challenge and priority. To address these trends, we are thrilled to announce our intent to acquire Pivotal and Carbon Black. It's an exciting day for VMware, as these acquisitions address critical priorities of CIOs and will meaningfully expand our ability to power our customer's digital transformation.
VMware got multi-cloud religion two years ago as it realized the futility of continuing to fight public cloud infrastructure and the benefits of forging partnerships. As I wrote at the time:
VMware has entered a fluid and disruptive era for application platforms by learning that there's more to be gained by building products that add value to other cloud services than fighting them in a death march. With many of its products now operating above the infrastructure layer, VMware is on a path to becoming a cloud-agnostic software provider in the mold of SAP.
The company is using VMworld 2019 to detail how it is fitting the pieces together into both a rational and cohesive portfolio and integrated suite of functions that flawlessly work together.
The four pillars of VMware’s strategy- infrastructure, multi-cloud management, apps and security
VMware describes its vision as providing “the essential, ubiquitous digital foundation” that supports “any cloud, running any application on any device.” Deconstructing the strategy shows the company to be making acquisitions and introducing new products in four areas:
- Enterprise infrastructure: VMware’s traditional product line now extended with containerization as I described last time.
- Multi-cloud management: An evolution of VMware’s data center administration software to support cloud resources from the major providers and remote sites, aka edge locations.
- Application development and delivery: A broad category which now includes the Pivotal Cloud Foundry PaaS stack, Bitnami package installation software and Heptio’s container ecosystem, along with client application provisioning and management software under the Workspace ONE label (some of which evolved from the Airwatch acquisition).
- End-to-end security: Includes home-grown products like AppDefense, significantly evolved acquired technology like NSX and the newly acquired Carbon Black client security software and services.
VMworld featured product announcements in each area.
- Enterprise infrastructure with updates to its hybrid cloud management software that includes automation and self-optimization improvements to the vRealize Operations and Automation products that work on both public cloud infrastructure and self-managed systems. The software also supports container deployments and integrates with external development and operations software like ServiceNow, Terraform and Git.
In conjunction with NVIDIA and technology from its Bitfusion acquisition, VMware is also developing GPU virtualization enhancements that will allow users to migrate GPU-accelerated workloads, such as for machine/deep learning, data analysis or scientific applications, from on-premises systems to AWS cloud instances without incurring downtime via VMware’s HCX product.
- Multi-cloud management by incorporating cost management and compliance software from CloudHealth that VMware has integrated into a multi-cloud management product that now supports both public cloud and VMware environments. VMware has also worked with Dell to introduce hybrid disaster recovery and data protection services that use S3 via VMware Cloud on AWS to backup data for VMware systems whether they are deployed in the cloud, a data center or remote site.
- Application development and delivery via new features for Wavefront to provide application performance measures for both traditional and containerized workloads. Wavefront now automatically discovers applications and microservices on Kubernetes and uses the information to create dashboards relevant to containerized applications. VMware is also using technology from Bitnami to build a cloud marketplace to host third-party applications validated to run on VMware Cloud on AWS and similar services from cloud partners.
- On the client side, VMware introduced a set of personalization services to Workspace ONE that includes an intelligent assistant built using IBM Watson to simplify access to applications and business processes and facilitate employee collaboration. The update also includes a host of improvements for managing Windows 10, Apple and Android devices.
- Network infrastructure and security by bundling VeloCloud software with Dell EMC hardware into easily-deployed SD-WAN appliances that incorporate NSX-T virtual networking to improve the performance and security of applications across WAN links.
VMware continues to create an integrated suite of products that extend its foundation in virtual infrastructure and infrastructure management into application development, deployment, monitoring, performance analysis and workflow automation. As such, it is taking a page from previous full-spectrum providers of IT products and services, notably IBM in its heyday. Indeed, Gelsinger wrapped up his earnings call by making the point that customers tell him they want such one-stop-shopping for cloud-era IT (emphasis added):
We are increasingly selling the VMware Cloud Foundation, and that is a composite of compute network storage and management and it's the full solution. And increasingly, we're seeing major customers say I'm going to build my full data center on the VMware offering and that's the Cloud Foundation.
While I’m surprised by the statement since it seems to go against a concomitant move towards using multiple cloud infrastructure and application services, I don’t doubt Gelsinger’s veracity. Indeed, IT executives have always favored the safe choice from an established vendor, whether it’s IBM, Cisco, Microsoft or Oracle and seem to need regular reminders of the downsides lurking via platform lock-in, price extortion, or technology stagnation. VMworld demonstrated that the risk of the latter is minimal, however, pricing and vendor mobility remain an issue executives must balance against the convenience, completeness and security of using a trusted, full-service IT provider.
As I noted two years ago, by building management, security and now, application development and deployment (i.e. Pivotal) that is cloud-agnostic and no longer tied to VMware’s proprietary systems, the company has moved up a layer or two of software abstraction. Doing so allows it to monetize the cannibalization of its infrastructure business by cloud services by delivering meta-level features not provided by any single hyperscale cloud vendor. VMware is now in the process of filling out the portfolio to deliver a suite that companies can “build my full data center on.”
The Day Two VMworld keynote included some impressive and compelling demonstrations of the efficiencies to be gained by integrating disparate products into a unified management platform. The balance the company must strike is between delivering a complete, integrated experience for those that are willing to pay for it, while not crippling individual products that other buyers might want to piece into an a la carte IT architecture.