A group of us just published an analysis of VMworld (Breaking Down VMworld), and I thought I’d take this opportunity to add some additional color to the analysis. The report is an excellent synthesis of our analysis, the work of a talented team of collaborators with my two cents thrown in as well, but I wanted to emphasize a few additional impressions, primarily around storage, converged infrastructure, and the overall tone of the show.
First, storage. If they ever need a new name for the show, they might consider “StorageWorld” – it seemed to me that just about every other booth on the show floor was about storage. Cloud storage, flash storage, hybrid storage, cheap storage, smart storage, object storage … you get the picture.[i] Reading about the hyper-growth of storage and the criticality of storage management to the overall operation of a virtualized environment does not drive the concept home in quite the same way as seeing 1000s of show attendees thronging the booths of the storage vendors, large and small, for days on end. Another leading indicator, IMHO, was the “edge of the show” booths, the cheaper booths on the edge of the floor, where smaller startups congregate, which was also well populated with new and small storage vendors – there is certainly no shortage of ambition and vision in the storage technology pipeline for the next few years.
Bill Gates said "People everywhere love Windows.” Whether or not you agree, the fact that Microsoft Windows remains the de facto standard for business productivity after nearly 3 decades, suggests that many still do. But as the sales figures of Microsoft’s competitors suggest, people everywhere love lots of other things too. And one of the reasons they love them so much is that they like to get things done, and sometimes that means getting away from the office to a quiet place, or using a technology that isn’t constrained by corporate policies and controls, so they can be freer to experiment, grow their skills and develop their ideas uninhibited.
Technology managers I speak with are aware of this, but they’re justifiably paranoid about security, costs, and complexity. So the result of these conflicting forces coming together is inspiring rapid innovation in a mosaic of technologies that Forrester collectively calls digital workspace delivery systems. It involves many vendors, including Microsoft, Citrix, VMware, Dell, nComputing, Amazon Web Services, Fujitsu, AppSense, Moka5, and more. The goal of our work is to help companies develop their capabilities for delivering satisfying Microsoft Windows desktop and application experiences to a wide range of users, devices, and locations.
VMware recently announced that it has signed a definitive agreement to acquire AirWatch, a leading provider of enterprise mobile management and security solutions. The acquisition is expected to provide customers with the most complete solution to manage users, devices, and applications across server, desktop, and mobile environments.
VMware obviously has had to expand its penetration beyond the server-centric virtualization market. So far, it has had mixed success with selling virtualization as a platform in the region, even though it has successfully entrenched itself as a leading hypervisor provider (unfortunately, VDI has proved a difficult sell for VMware in AP). In order to gain much deeper penetration and traction, VMware needed to add an end user computing offering to its portfolio. The pairing should result in:
It's hard to believe that a company could burn through $225 MILLION dollars in 11 months, but it looks like that may have been exactly what AirWatch did. According to data released by AirWatch and written by financial analysts (links to all data sources at bottom of post), AirWatch likely had burned through nearly all of its available cash in record time. Based on an assumption of $120K burn per employee (fully loaded) per year and an assumed removal of $50M in equity at the time of the venture round, AirWatch would have had somewhere between 5 and 6 months of runway left as of January 2014. These assumptions are corroborated by the fact that VMware has contractually extended AirWatch an offer to provide a bridge loan if the acquisition deal does not close in the next 6 months.
What did AirWatch do wrong? It sounds like they may have made some over-assumptions with regards to their growth rates for 2013. It could have possibly been the adoption rates in countries outside of North America. It may have just been bad luck. Or it could even be a cooling off of interest in mobile device management technologies based on containerization. We won't know exactly why they were getting near the end of the runway, but what we can say is that VMware may have overpaid in multiple. Based on the data provided by VMware of AirWatch bookings for 2013, VMware paid somewhere around 16x bookings for AirWatch. Man, that's a lot of bread!
On January 22, 2014, a new mobile security player was born. This is the date that VMware announced its intention to purchase the mobile device management (MDM) firm AirWatch. With a price tag of $1.5 billion, this acquisition confirms that the mobile security market is scorchingly hot. This news comes on the heels of the November acquisition of Fiberlink by IBM. I expect additional mobile security market consolidation to occur throughout the remainder of 2014. This acquisition is a shot across the bow of any other major vendor looking to play in the mobile security market. If you don't step up and spend now, you might just be left holding the bag.
This week, IBM announced its new line of x86 servers, and included among the usual incremental product improvements is a performance game-changer called eXFlash. eXFlash is the first commercially available implantation of the MCS architecture announced last year by Diablo Technologies. The MCS architecture, and IBM’s eXFlash offering in particular, allows flash memory to be embedded on the system as close to the CPU as main memory, with latencies substantially lower than any other available flash options, offering better performance at a lower solution cost than other embedded flash solutions. Key aspects of the announcement include:
■ Flash DIMMs offer scalable high performance. Write latency (a critical metric) for IBM eXFlash will be in the 5 to 10 microsecond range, whereas best-of-breed competing mezzanine card and PCIe flash can only offer 15 to 20 microseconds (and external flash storage is slower still). Additionally, since the DIMMs are directly attached to the memory controller, flash I/O does not compete with other I/O on the system I/O hub and PCIe subsystem, improving overall system performance for heavily-loaded systems. Additional benefits include linear performance scalability as the number of DIMMs increase and optional built-in hardware mirroring of DIMM pairs.
■ eXFlash DIMMs are compatible with current software. Part of the magic of MCS flash is that it appears to the OS as a standard block-mode device, so all existing block-mode software will work, including applications, caching and tiering or general storage management software. For IBM users, compatibility with IBM’s storage management and FlashCache Storage Accelerator solutions is guaranteed. Other vendors will face zero to low effort in qualifying their solutions.
This morning Citrix announced the acquisition application mobilization vendor Framehawk for an undisclosed sum as the battle for high performance for corporate Windows apps on mobile devices rages on. Here’s my take:
It's a good acquisition for Citrix and in turn for I&O pros for 3 reasons:
Some of Framehawk's technology will be additive to Citrix's enterprise portfolio. Specifically, Framehawk's framebuffering protocol - called Lightweight Framebuffer Protocol, or LFP - is designed for mobile carrier networks like 4G/LTE where there is often highly variable latency, loss, and jitter. Citrix will add it to their arsenal alongside HDX to improve the end user experience of server-hosted Windows applications on mobile devices for XenDeskop App Edition and XenDesktop.
It will be a boon for DaaS providers' customer experience. Citrix is in the business of building a Desktops-as-a-Service (DaaS) platforms for service providers. One of the barriers to the success of DaaS in the enterprise, and a potential source of value for service providers, is the user experience on mobile devices over mobile networks. Another player to watch the remote desktop/app protocol space for mobile networks is RapidScale.
It's a competitive take-out play as well. Delivering Windows apps from the datacenter to both corporate and employee-owned desktops, laptops and mobile devices is what Citrix does - it's their place in the technology universe. Framehawk's technology approach, while expensive, has some advantages. Citrix was probably starting to see them in more deals as competition.
After a couple less-than-home-runs in the cloud game, it looks like CenturyLink might just have a real contender. The US midwestern telecommunications leader pulled the trigger on yet another acquisition this morning - Tier 3, a legitimate cloud platform provider. The real question is whether this is the latest in a long string of acquisitions that have failed to hit the mark, or a sign that they finally got it right.
CenturyLink is a Lego company built through a string of acquisitions all bolted together. It rolled up several telecom players to get to its current size and presence in that market. And it has bought now three cloud companies.
In Barcelona this week, VMware announced that it is acquiring Desktops-as-a-Service provider, Desktone. This is a market I've been watching for several years, and I think this is good news for both Desktone and VMware customers. On one hand it provides an alternative for VMware prospects who are unsure whether they want to make the investment in ramping up an in-house VDI initiative, and it provides a scale-out option for existing VMware View customers who may be loathe to make additional capital investments to expand their capacity. With Citrix also developing their own homegrown DaaS infrastructure offering for service providers, this move further legitimizes the DaaS market.
Forrester has been tracking the rise in interest in DaaS specifically in our Forrsights surveys of IT decision makers for the past 2 years, which gives us a unique view into the market. In Figure 1 below, we can see the rise in IT decision-maker interest in DaaS relative to on-premise hosted virtual desktops, and see that year-over-year growth of DaaS interest is strong. The market accelerated in part because Infrastructure-as-a-Service providers see it as a way to monetize their existing infrastructure investments.
Dell just picked up Enstratius for an undisclosed amount today, making the cloud management vendor the latest well-known cloud controller to get snapped up by a big infrastructure or OS vendor. Dell will add Enstratius cloud management capabilities to its existing management suite for converged and cloudy infrastructure, which includes element manager and configuration automator Active System Manager (ASM, the re-named assets acquired with Gale Technologies in November), Quest Foglight performance monitoring, and (maybe) what’s still around from Scalent and DynamicOps.
This is a good move for Dell, but it doesn’t exactly clarify where all these management capabilities will fall out. The current ASM product seems to be a combo of code from the original Scalent acquisition upgraded with the GaleForce product; regardless of what’s in it, though, what it does is discover, configure and deploy physical and virtual converged infrastructure components. A private cloud automation platform, basically. Like all private cloud management stacks, it does rapid template-based provisioning and workflow orchestration. But it doesn’t provision apps or provision to public or open-source cloud stacks. That’s where Enstratius comes in.