En route to VMWorld 2015. This will be my third VMWorld as an analyst, and it has been truly interesting to watch VMWare grapple with its biggest challenge--competing for marketshare in the public cloud.
First of all – let’s understand the challenge. VMWare is the uncontested leader when it comes to on-premise virtualization of computing loads of enterprises. But as enterprises look for public cloud and SaaS loads – VMWare needs to change to remain relevant.
Coming into VMWorld 2013 – two years ago – my un-briefed understanding was that VMWare ‘did not get public cloud’. Presentations, Briefings, Q&A with Paul Maritz and the new CEO Pat Gelsinger dispelled this. It was clear that executives understood both challenge and opportunity of the public cloud.
Leaving VMWorld 2013 my understanding then was that it was the commercials. Similar to many on premise vendors, I thought VMWare not to be motivated to a quick acceleration of enterprise loads to the public cloud, as the switch from perpetual to subscription licensing would not be advantageous financially. Coming into VMWorld 2014 with that understanding I was convinced by strategy czar Ayyar that actually subscription revenues are better (heard that before) but that also VMWare would ultimately extract more revenue from customers in the subscription business model.
During VMWorld 2014 it became clear to me that VMWare had a product issues. It had to build infrastructure and products for public cloud. A very high developer number to be hired / working in the division of public cloud exec Fathers was in play.
But before VMWorld 2015 we have not heard much on product announcements / roadmaps. But maybe VMWare was holding back for VMWorld this year.
Anyway – we will know in a few hours ….
But I wanted to share how my understanding of what VMWare is struggling with in my view – and what is holding the vendor (and thus customers) back. Stay tuned for updates from VMWorld this week.