A Hidden Gem VMware Should Invest More For Its Long Term
For a long time, VMware wanted to grow upward the stack but did not work out well. Instead, it took the horizontal strategy as I discussed in my blog article two years ago. So far, the new strategy has worked well.
Although VMware has its strong hold in enterprise because it is the company that created the virtualization market by itself, the risk of being challenged by other vendors is far from over. Technically speaking, the touch point for the VMware products is so small that customers can move away from VMware without too much effort. That is what has been happening in SMB market with Microsoft Hyper-V, and in enterprise market with open source KVM.
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Because the overall market is still growing, all the vendors still see increases in revenues. At a future point of time, the market will mature and saturate. By then, any loss in market shares would mean revenue decrease. Every vendor has to prepare for that point and come up with a strategy for preventing loss of market share. That is especially important for VMware because it has been giving market shares to the competitors like Microsoft and KVM over the last few years even though it’s still #1 today.
There are many different approaches to prevent customers from leaving for other products.
On business side, a company can lower its price to make the product more competitive compared with other vendors. But with Microsoft Hyper-V, which comes free (not really free, but is free if you have Windows license already) with Windows server license purchase, and open source KVM, it’s not really a feasible approach unless VMware turns itself into an open source company as well. Another approach on business side is to have a strong ecosystem around core products. VMware has been doing pretty well on this side. On track record, Microsoft is a real master on building partner ecosystems – just think how it did for its Windows platform. Given VMware’s lead in time to market, its vSphere will continues to be de facto virtualization platform over the years, but more and more third parties have started or will start to support Hyper-V.
On the technical side, VMware had wasted a few years in attempts to grow vertically upward the stack. Its technical advantages have been narrowed down quite a bit to a point where customers don’t care about the differences either they don’t need some new features, or the benefits from the features are really marginal. VMware has to innovate more on horizontal strategies. Among many different possibilities there, there is a low hanging food that would generate biggest benefit with lowest investment.
This is an existing product – VMware Tools.
Why it’s important? Besides its existing features, there are quite a lot of things VMware can offer with this tool. The goal is to make the workload sticky even though virtual machine is not sticky. At one time, people thought VMware would buy Suse Linux, but it did not. I think it’s a right decision. But it does not mean VMware should not do more in OS to make its virtual machine stickier. I think the answer is the VMware Tools.
As we know, the VMware Tools is installed in OSes that vSphere or Workstation/Player supports. It helps provide better network drivers, mouse cursor experience. In short, VMware Tools makes a virtual machine running faster/better on vSphere.
While there are already many features in VMware Tools already, VMware should innovate more on it. For example, it can provide feature to dynamically construct virtual machine from base virtual machine template and provisioning scripts like Chef, guest OS level automation, etc. The possibility there is endless.
As always, there is no way for VMware to make money out of VMware Tools. Not before, neither in the future. But this is strategically important for the company to keep its platform stickier.