Gelsinger Brings The "H" Word To VMware

 

The long-rumored changing of the guard at VMware finally took place last week and with it came down a stubborn strategic stance that was a big client dis-satisfier. Out went the ex-Microsoft visionary who dreamed of delivering a new "cloud OS" that would replace Windows Server as the corporate standard and in came a pragmatic refocusing on infrastructure transformation that acknowledges the heterogeneous reality of today's data center. 
 
Paul Maritz will move into a technology strategy role at EMC where he can focus on how the greater EMC company can raise its relevance with developers. Clearly, EMC needs developer influence and application-level expertise, and from a stronger, full-portfolio perspective. Here, his experience can be more greatly applied -- and we expect Paul to shine in this role. However, I wouldn't look to see him re-emerge as CEO of a new spin out of these assets. At heart, Paul is more a natural technologist and it's not clear all these assets would move out as one anyway. 
 
Pat Gelsinger's move into the VMware CEO role signals a need for refocus on holding share and increasing profits from the core data center infrastructure layer. The CloudFoundry announcement last year and the strategy to create a new vertically integrated platform from infrastructure up through middleware was taking longer to gain traction than expected. It was also muddying VMware's traditionally strong infrastructure virtualization story -- right when they could least afford it. Microsoft, Oracle, Citrix, and other virtualization management vendors and of course the public IaaS market were all capitalizing on this with maturing infrastructure virtualization stories and pushed for enterprises to create islands of hypervisors and thus breaking the VMware stronghold.
 
At the same time, enterprises have been voicing strong concerns about VMware lock-in. The result was more push-back by customers on long-term enterprise agreements with VMware and a reluctance to commit to VMware-only management stacks. When every competitor is touting their heterogeneity, it was becoming increasingly hard for VMware to convince customers that a single-vendor virtualization strategy was a long term bet worth making.
 
Meanwhile, vCloud Director has been struggling, as customers remain unprepared (from an operational maturity perspective) to deploy and manage a private cloud. Through discussions with Forrester enterprise clients we found more customers had purchased vCloud Director as part of their VMware enterprise license renewal but had not deployed it in production. 
 
These struggles hadn't yet shown up in the quarterly results because overall growth of the VMware footprint has masked this issue. But EMC clearly saw this and knew the time was right to make a change. 
 
vCloud Director will now be positioned less as a pure cloud solution and more as a tool for constructing a Software-Defined Data Center or the mechanism for carving out pools of resources, cloud and non-cloud. Thus attempting to expand its today-relevance for those who still aren't ready for a cloud. Gelsinger said to expect vCloud Director to be the spotlight product at VMworld next month. 
 
Where does heterogeneity come in? Not within vCloud Director, nor from their increasingly successful vCenter Operations Manager suite (formerly Integrien). Heterogeneity comes through the acquisition of DynamicOps which will be positioned as a workload management tools lying above the aforementioned tools and letting customers manage complex workload deployments to physical, virtual (vSphere and other hypervisors) and cloud environments. VMware will have to work very hard to sell customers on this story: prior to the acquisition, DynamicOps was positioned as a cloud-builder competing directly with vCloud Director.
 
So what does this strategic change mean for Forrester clients?
 
  • For I&O Professionals -- This is good news as it means a refocusing of VMware on its core value: infrastructure transformation. No more cloud OS and middleware distractions. Gelsinger brings more than 30 years of experience in infrastructure technology and strong relationships with the leading hardware manufacturers on whom VMware has strong dependencies for its go to market. 
 
  • For AD&D Professionals -- This change puts the SpringSource assets somewhat in limbo, as well as the CloudFoundry PaaS layer. The refocusing on the infrastructure layer bucks a trend in cloud computing we are seeing on the public side, where the IaaS/PaaS layers are coming together (SFDC, AWS, MS, Google). However, it's likely VMware sees OpenStack as more of the threat. However, I'd only paint this as a pause, as EMC clearly has bigger plans for its developer-relevant assets and we don't expect a big delay before these plans are revealed. 
 
  • For CIOs -- This is good news, especially due to the heterogeneity statement. It signals less lock-in and greater alignment with the realities of most corporate data centers which are evolving into hybrid environments. If you have been worried about VMware lock-in, this is a good sign you shouldn't let those worries keep you up at night.
 
Dave Bartoletti contributed to this report.