08-02-2016, 08:43 #1
[EN] All Is Not Well In VMware's Cloudy World
Feb 5, 2016
VMware is facing an uphill battle in driving vCloud Air’s adoption among enterprise customers. Launched with much fanfare in 2013 as vCloud Hybrid Service (vCHS), the platform failed to take off. It’s quickly turning into a liability for VMware. The recent developments in the company clearly indicate that all is not well with the vCloud Air business.
The first sign came in the form of departures of vCloud Air’s top executives. Some of the well-known faces that championed VMware’s hybrid cloud strategy are no more with the company.
Ben Fathi, CTO at VMware left the company in August last year to join CloudFlare, a startup that deals with security and web application delivery. Ben was directly responsible for vCloud Air technology roadmap among other initiatives including software-defined-data-center (SDDC) and end-user computing (EUC). He held technical leadership positions at Cisco and Microsoft before joining VMware. Ben defined the initial containerization strategy for VMware which has now evolved into Photon Controller.
In October 2015, Mathew Lodge, VP of cloud services left VMware to take up the COO position at Weaveworks, a company that’s building the networking stack for containers. Mathew was the face of vCloud Air among customers and partners. He took the center stage at VMWorld to pitch VMware’s cloud to thousands of IT Pros and developers.
Last month, VMware lost its chief technologist and VP, Simone Brunozzi, who was hired from the rival, AWS. A popular personality in the cloud communities in Europe, Asia, and the valley, Simone was the rock star evangelist at AWS. He worked at the AWS regional headquarters in EMEA and APAC, engaging with the local ecosystem, and speaking at various conferences and events. Simone, who was quite active in the social media and the community, became relatively quiet after joining VMware. The company failed to take advantage of his brand and the following he had among the technical community. Simone has taken up the CTO role at a stealth startup in Silicon Valley.
Apart from the defections at the top, VMware faces another challenge with Virtustream, an enterprise cloud provider that EMC acquired last year. Virtustream enjoys credibility for running SAP workloads in the public cloud. There were initial plans and announcements to merge vCloud Air business with Virtustream, but the company backed out of it leaving EMC to manage Virtustream. This move created friction within the company as it has to deal with yet another competitor, which is ironically a part of the parent company.
While VMware is struggling to get its foothold in the hybrid cloud market, Microsoft is making great strides with Azure. Azure Stack, which Microsoft announced last week, delivers consistent experience between the private cloud and public cloud. Microsoft’s strategy is to bring the best practices of the public cloud to the private cloud while VMware’s attempt was to take the vCenter-based private cloud to the public cloud. Microsoft is confident that it will be able to push its hybrid cloud platform through Windows Server 2016, the next version of its flagship server operating system. Dell and HP Enterprise partnered with Microsoft to sell Cloud Platform System (CPS), the converged infrastructure appliance to enterprise customers. On the other hand, VMware failed to leverage its SDDC investments in driving customers to vCloud Air.
Amazon Web Services is turning into an unstoppable force in the cloud market. In the recent earnings statement, Amazon reported that AWS contributed to $687 million in operating income for the quarter, which is up from $240 million compared to last year. AWS is maintaining a huge lead in the market making it incredibly hard for the competition to catch up. VMware’s hybrid cloud lacks the breadth and depth of features supported by AWS. It’s partnership with Google to cross-sell Google Cloud Platform services hasn’t helped the company much.
vCloud Air’s debacle may not be all gloom and doom for VMware. The company has a healthy pipeline for its end user computing and SDDC business units. Like most of the traditional companies, VMware is struggling to define its relevance in the modern IT dominated by cloud. While public cloud is eroding its virtualization business, the rise of containers is challenging the very core of VMware – the hypervisor. The public cloud and containerization have dragged the company into the crossroads.
VMware is slowly realizing that building software to manage the data center is very different from managing the data center. Deploying massive infrastructure to host mission critical workloads of customers, and managing it not everyone’s cup of tea. HP realised the same with the HP Helion Public Cloud platform. It’s time for VMware to go back to the whiteboard to redefine its priorities
08-02-2016, 09:06 #2
"VMware is slowly realizing that building software to manage the data center is very different from managing the data center."
Vale para qualquer software.
08-02-2016, 16:03 #3
Server virtualization looks like it has peaked - what's next?
The Inevitable Slide As Server Virtualization Peaks
February 8, 2016
Timothy Prickett Morgan
It has been just about a decade and a half since server virtualization juggernaut VMware debuted the first release of its ESX bare metal hypervisor, and nearly a decade since this hypervisor and its virtual machine guests had enough oomph to take on the job of encapsulating and consolidating multiple operating systems and workloads on since physical servers.
The timing of ESXi 3.5 in 2007 coincided perfectly with the beginning of the Great Recession, and VMware, with a server virtualization stack that was arguably more mature and focused mostly on Windows Server workloads, was able to get dominant share of the corporate datacenter. Since Windows Server 2008 debuted with a very respectable Hyper-V hypervisor for running virtual machines, Microsoft has clawed back its own market share, stunting VMware’s installed base and revenue growth. On the Linux front, the KVM hypervisor backed by Red Hat, has its share of the server virtualization pie, particularly among those building public and private clouds, and the Xen hypervisor and its XenServer hypervisor have their chunks of the market, too, particularly with Amazon Web Services using its own Xen variant and Rackspace Hosting still using the commercial grade version of XenServer from Citrix Systems.
King Of The Hill
In the enterprise, VMware is still the bellwether for server virtualization, and that is why an admission that the core ESXi and vSphere server virtualization business is in decline is an important event. In a recent call going over VMware’s financial results for the final quarter and full year of 2015, CEO Pat Gelsinger, who used to run the enterprise computing group at chipmaker Intel for many years, didn’t pull any punches.
“We have recognized that our blockbuster compute products are reaching maturity and will represent a decreasing portion of our business going forward, even as they continue to be a powerful springboard for building our new businesses,” Gelsinger told Wall Street, adding that growth in NSX network virtualization, Virtual SAN (VSAN) hyperconverged storage, end user computing (client virtualization in its many forms), and a few other products would more than outpace the decline (relative to VMware’s overall revenues) in core ESXi/vSphere compute virtualization revenues.
Carl Eschenbach, president and chief operating officer at VMware, has been with VMware since 2002 and has helped grow the company from 200 people with $31 million in sales at that time to the behemoth that it is today, with more than 18,000 employees and more than 500,000 customers using its various virtual wares. Eschenbach has seen many technical and product transitions at the company, and is facing perhaps the toughest one VMware has had to face as enterprise customers are contemplating building hybrid clouds and want to cut back on their server virtualization costs at the same time that various container products, which do not require full-on server virtualization, come into their own.
For the full year, VMware had $2.72 billion in license sales, up 5 percent, with services revenues of $3.93 billion, up 14 percent. Overall, after a $76 million payment to the General Services Administration for a pricing issue it had with the US government, revenues for the year came to $6.57 billion, up 8.9 percent. Net income for the company was $997 million, up 12.5 percent.
VMware does not break out revenues by product lines in its financial reports, but it does provide some hints. In the call, Eschenbach said that bookings for compute products – this means the vSphere management tools that activate components of the ESXi hypervisor – were roughly flat in the fourth quarter, including both subscriptions for support contracts as well as license sales. License sales by themselves were down in the “low double digits” while management license bookings grew in the “low teens” during the final quarter of the year. (This includes various components of the vRealize suite of tools, which used to be called vCloud Suite but which were rebranded.) VMware says that its cloud management tools, above and beyond the basic vSphere functions and the vCenter management console that are ubiquitous in its customer base, are now installed at 17 percent of its customers, up from 14 percent a year ago.
Sales of its NSX network virtualization tools, which VMware acquired back in the summer of 2012 for $1.26 billion and which were first commercialized three years ago, are a serious bright spot for VMware, given that network virtualization is a pesky problem that is not just limited to its own hypervisors but also to all of the other alternatives in the market, too. In the second half of 2015, said Eschenbach, bookings for the NSX products were twice that which VMware saw in the first half of 2015, and moreover, the annualized revenue run rate as 2015 came to a close was $600 million, triple what it was at the end of 2014. As for hyperconverged storage, VSAN bookings grew by almost 200 percent in the final quarter of 2014, and customer headcount is at over 3,000 sites, triple that from a year ago. The annualized run rate for VSAN was at over $100 million in the fourth quarter.
NSX assumes server virtualization in some form, be it with an ESXi cluster or a cloud built using other hypervisors, either public or private. VMware is gearing up to push NSX as a hybrid networking layer that can span the big public clouds like Amazon Web Services or Microsoft Azure, but it does not have the same hybrid story that it can so easily tell with its ESXi stack. While the vCloud Air network of public clouds created by VMware itself and its service provider partners can offer compatible clouds with the familiar ESXi hypervisor and consistent management tools across on-premises and public cloud infrastructure, the scale of vCloud Air has nothing on Microsoft’s Azure, and moreover, if Windows Server shops want to learn a new management paradigm, as they will have to do when they go hybrid, they might be more apt to shift to Hyper-V and learn Azure Stack for on premises and use Azure for public cloud capacity.
Heavy As A Photon
Server virtualization is a relatively heavy way to drive up utilization on servers, and it has been particularly well suited for Windows workloads where various container technologies have not yet been brought to bear. The lack of sophisticated virtualization and workload management tools in prior releases of Windows Server made VMware’s tools the default choice for enterprises looking to increase the agility of their software deployments while also driving up server utilization. While enterprises are not apt to change platforms quickly, the slowing growth in server virtualization means they have virtualized the stacks they can and that they are probably looking at how they might deploy containers either on top of or instead of virtual machines.
We think that plenty of workloads – particularly in distributed data analytics – have been created to run on bare metal machines and have generally be set up that way as silos within the corporate datacenter. But companies want to be able to consolidate their clusters and the data underneath them so this information and compute capacity can be shared by a wider variety of workloads, driving up utilization much as VMware started doing for Windows Server work a decade ago. We do not think heavy virtualization like that embodied in ESXi will be the tool of choice to create shared, multitenant clusters and that something that looks more like Mesos or Kubernetes, with containers isolating workloads but also allowing for bare metal provisioning where appropriate, will be how enterprises will ultimately want to deploy software. Why do we believe this? It is simple: This is how Google has been running myriad jobs on massive clusters for the past decade.
It would be easy or tempting to compare VMware to Unix systems at the dawn of the Linux revolution in the late 1999s and early 2000s. But that installed base of enterprise customers is vast, and it will not move fast because it is far more conservative that HPC centers, hyperscalers, or cloud builders. (A powerful recession could change that, of course.) Even that transition from Unix systems at the core of the datacenter to those machines largely being replaced by Linux and Windows Server has taken a decade and a half – and is still not over. It may take another decade, in fact.
The number of virtual machines under management is quite large. Shortly after Gelsinger took over VMware in early 2013, VMware had about 30 million VMs under management, and by the summer of 2014 that had grown to around 40 million VMs and as 2015 came to a close it was around 50 million VMs, the company tells The Next Platform. This is a lot of virtual servers, and clearly it represents a very good revenue stream. Even if VMware might be losing some share to competitors or to new approaches like Docker containers, the VM base is still growing, for now at least, although we are of the opinion that it may have peaked.
The good news for VMware is that it is creating a more lightweight, container-friendly, and presumably lower cost platform based on its “Photon” Linux variant and a much streamlined version of ESXi as well as the “Project Bonneville” streamlined VMs that will support Docker containers. And it has NSX and VSAN to help pick up the slack as the server virtualization that made it a contender in the datacenter peaks.
09-02-2016, 19:57 #4
PR: VMware Announces Changes to Board of Directors
GoPro President, Former Cisco, Microsoft and Skype Executive Anthony Bates and Former Dell and American Airlines Executive Don Carty Join VMware Board of Directors.
February 09, 2016
VMware, Inc. (NYSE: VMW), a global leader in cloud infrastructure and business mobility, today announced that Anthony J. Bates and Donald J. Carty have been elected to the VMware board of directors. Carty joined the board in December 2015 and Bates joined on February 8, 2016.
Bates currently serves as president and member of the board of directors at GoPro, Inc. Prior to GoPro, Bates was the executive vice president, Business Development and Evangelism of Microsoft Corporation and prior to that was the chief executive officer of Skype Inc. until its acquisition by Microsoft in 2011. He also served in various roles at Cisco Systems, Inc. and currently serves on the board of directors of Ebay Inc. and Sirius X.M. Holdings, Inc.
Carty has been a director of EMC since January 2015. His past roles include vice chairman and chief financial officer of Dell, Inc. from January 2007 to June 2008, and chairman and chief executive officer of AMR Corporation and American Airlines from May 1998 to April 2003. Carty is also chairman of Virgin America Airlines, Inc. and is a director of Canadian National Railway Company.
"We are thrilled to welcome Tony Bates and Don Carty to the VMware board of directors," said Pat Gelsinger, chief executive officer, VMware. "With their business insight and experience across diverse industries as well as technology companies, their perspective and counsel will prove invaluable for the VMware board and executive team."
Gelsinger added, "Tony Bates brings a great combination of enterprise, service provider and consumer experience to VMware's board which will be vital as we continue to build and develop VMware's emerging growth businesses including NSX, AirWatch and Virtual SAN. Don Carty is a seasoned executive with operational and strategic experience across various companies and public boards."
VMware is a global leader in cloud infrastructure and business mobility. Built on VMware's industry-leading virtualization technology, our solutions deliver a brave new model of IT that is fluid, instant and more secure. Customers can innovate faster by rapidly developing, automatically delivering and more safely consuming any application. With 2015 revenues of $6.6 billion, VMware has more than 500,000 customers and 75,000 partners. The company is headquartered in Silicon Valley with offices throughout the world and can be found online at www.vmware.com.