Will Microsoft sunset VMware? – 18 months later –

Early in 2007 I wrote a post whose title was “Will Microsoft Sunset VMware?”. You can read it here. The closing of that post was:

> This analysis is as of April 2007. I am sure many things can and will change and I might be proven wrong. Let’s see what happens.

I went through it this morning and I have to say that (so far) I have gotten it right. I could even republish it “as is” and it would still hold true even 18 months later (except Microsoft did change the name of their hypervisor!): Xen didn’t really take over the world (and the KVM speculations I made are materializing now with RedHat and SUSE switching to KVM and abandoning Xen) and also all the thoughts about innovation, add-on value, cost and so forth do still make some sort of sense as of (end of) October 2008.

The reason I bring this topic to the foreground again on my blog is because more than ever I read on the blogsphere comments about how VMware is going to be eclipsed by Microsoft given the fact that the Redmond giant is engaging seriously. I am not ruling out this possibility as no one knows what will happen in the future (one could only speculate given past and present experiences) but I wanted to stress on the fact that these people don’t get (in my opinion) what’s really going on here. And what’s going on … is a very big thing.

Let me try to be concise (something that I have never really mastered). Overall at VMware I think they are working out their plan at two different levels which I refer to as the tactical level and the strategic level.

At the tactical level, VMware is engaged to provide the best hypervisor and the best management tools to create a virtual infrastructure. At this level, they position VMware ESX as the best hypervisor Vs Microsoft Hyper-V; VMware VI3 (along with all the other tools they have announced in the last year or so) as the best management tools Vs the Microsoft Systems Center suite (which includes Virtual Machine Manager) etc etc all this aimed at supporting  legacy Linux and Windows type of workload in the best possible way.

After all if you think how you use today’s virtual infrastructure – built on various software platforms such as VMware, Microsoft, Citrix or VirtualIron – is used, I think it’s fair to say that your virtual machine can be defined as super flexible and powerful (virtual) hardware but the software stack you run within the VM (i.e. the black box) is hardly different than the software stack you would be running on a physical box. So given a legacy Linux or Windows stack comprised of many dozens, hundreds or even thousands of physical servers, what is the best target virtualization platform to make a giant P2V, so to speak? This is the tactical battle VMware is engaged in to stay ahead of Microsoft.

I agree that if you only look at things from this level, VMware could be in a dangerous position when it’s all about “just” writing code to catch your competitor’s feature set. We know MS is pretty good at that plus they have deep pockets they can throw at tons of developers to shrink the gap. Well, it’s clearly not that easy and I am obviously exaggerating but you have got the idea: if it’s just about “a tool” there is always a possibility that your competitors will catch you if they become serious about that. I think this is why many people think that VMware could become the next Netscape.

The strategic level at which VMware is engaged… actually I touched on this 18 months ago and that very same thought remains very much true, and it’s materializing with the latest VMware messages. In that blog post (April 2007) I wrote:

>Changing the rules: perhaps one of the most important thing which is leading me to think that VMware will not be sunset is the fact that they (VMware) are thinking about “changing the rules” in the datacenter and >of  IT in general rather than viewing virtualization as a means to reduce the number of servers from 20 to 1. While the use of virtualization has originally being considered for Server Consolidation projects clearly this >is now one of the many facets of the advantages that a virtualized Datacenter and a virtualized IT will gain (Disaster Recovery is certainly one example of these new scenarios). Another example of these new use cases >for virtualization are Virtual Desktops hosted in the Datacenter that are changing the way Administrators are thinking about their distributed IT. The next frontier would be Virtual Appliances which is a very different >way to develop and deploy applications compared to what we are doing today. In such a scenario the role of the Operating System would change drastically where some of the OS features would be drained into the >virtual infrastructure while some others will be distributed as part of the application in a consolidated virtual machine file (that is the virtual appliance). This is a fascinating scenario and as you can imagine it >involves more than just developing a hypervisor with a management interface to it: it involves creating a new culture on how we deal with IT, taking all the pieces apart and rebuild our datacenters in a much more >efficient way.

I wouldn’t know how to say it better in October 2008. Perhaps the only thing I can do is add a couple of pictures that would graphically outline this concept:

The silo on the left outlines what I think to be the Microsoft systems virtualization strategy. Systems being here a key word: MS does have a more articulated virtualization strategy that goes beyond virtualizing a piece of server hardware (so do VMware and Citrix, for the record). However this discussion is really centered on systems virtualization and the corresponding stack. Back to the point… at Microsoft they can’t afford to compromise a very successful (and healthy) business such as Windows OS, so Windows does need to remain very centric in their systems virtualization strategy. Windows is the mean by which they deliver their value and Windows will be their strategic play. It’s not by chance that they pitch Hyper-V as a Windows 2008 value item, for example. It’s not by chance that they pitch Microsoft Systems Center as a toolset to properly manage both virtual and physical Windows deployments. It’s not by chance that all of their products are Windows-based (except perhaps Office for MAC and a few others which would be fair to describe as “not the bulk of their business” anyway). We can go on and on but at the end we will always be gravitating around one central and critical word: Windows.

The silo on the right, on the other hand, outlines what I think to be the ultimate VMware strategy. They basically want the virtualization layer to become the Datacenter OS. I speculated about this at VMworld 2007 and they announced this at VMworld 2008 (read this irreverent post if you have time). VMware would like to challenge the current notion of the OS: they would like to take apart the OS we know and redistribute part of its features into their new Virtual Datacenter OS concept and part of its features into this new Just Enough OS (JEOS) concept. JEOS wraps the application and only provide minimal assistance to it (to the point it only needs to provide boot capabilities and a proper minimal run-time environment).

As you can depict from the pictures it would be very difficult to map what Microsoft and VMware are trying to drive strategically and come up with an apple-to-apple comparison. This is the strategic challenge in which VMware is engaged. And the interesting thing is that they are not engaged against Microsoft, they are engaged against a whole industry that is used to look at the x86 stack in a “slightly” different (and much less aggressive) way than VMware is, in my opinion, envisioning. As a matter of fact we are still trying to get users digest “virtualization” to support standard legacy software stacks (and it’s not always easy). I am sure you can imagine what it will take for the industry as a whole to digest this new software stack layout. This is in fact, not by chance, one of the strongest value propositions Microsoft is promoting: all the benefits of virtualization without disruption and discontinuity from the past.

The final analysis: this is where the real battleground is for the next few years to come. If the industry embraces the VMware message and strategy and starts to redefine the software boundaries in the data center, then VMware will have the lead. If the industry does not embrace the VMware messages and will settle on the advantages of running a legacy software stack in a slim software bubble (VM) as opposed to running the same software stack on top of a dedicated physical box… than MS can cause much trouble for the VMware business, and VMware will be forced to continue their tactical battle I talked about at the beginning.

My speculation is that virtual appliances will have a huge role in this. Virtual appliances, by definition, implement the ultimate VMware vision. The success (or lack of thereof) of the virtual appliances will determine VMware’s future as a winner or as a looser in the data centers. VMware could well be the next Netscape but, what if it is the next Microsoft? Interesting dilemma. I don’t know who is going to win and who is going to lose in the end, but I am certain Microsoft will not sunset VMware nor will VMware sunset Microsoft. The x86 market is healthy enough that, while the winners can really make tons of money, the losers will have their slice of the pie, too, for some time to come.

Massimo.

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