What's happened to VMware?

The golden tech firm still has its shine, but competition from Microsoft and a falling share price have begun to tarnish things. Will the situation improve, or is the virtualisation leader in trouble?

Then, on the same day in July, VMware delivered a pair of shock announcements. Co-founder and chief executive Diane Greene was being replaced. While there had been rumours of a personality clash between Green and EMC head Joe Tucci, the ousting took the industry by surprise. But there was a second punch to follow, one that partially explained Greene's departure. VMware reported its quarterly results, and they weren't great. The firm issued a profit warning and said it would not hit its previous forecast of 50 per cent growth for the year.

This was a firm used to 90 per cent jumps in revenue; a warning was no small thing.

Green was replaced by ex-Microsoft and EMC staffer Paul Maritz, who quickly set about making the place his own. Just weeks after his appointment, he answered Microsoft's move to make its own Hyper-V free by allowing ESX to be downloaded for no cost.

But staff loyal to Green started to leave. The biggest hit though not the most surprising was the departure of her co-founder, husband and the firm's top scientist, the well-respected Mendel Rosenblum. The news that he was leaving sent shares tumbling yet again.

Advertisement - Article continues below
Advertisement - Article continues below

And last month, the firm had some more bad publicity, when a time-based coding error shut down thousands of virtual servers. While the problem was quickly patched, it was an uncommon error from a firm known to be strict with quality control.

And, just to be a further thorn in VMware's side, Microsoft nicely timed the release of their hypervisor to a few days before its competitor's annual conference, giving virtualisation customers another product to consider.

Turning point or continued slide?With that on his shoulders going into his first VMworld conference as chief, Maritz had a lot of people to convince. Based on the continuing fall of the share price during that week, he didn't do enough. But share price isn't anything, and VMware seems to be setting itself up for more than just the virtualisation go-to guy.

With no business-ready product announcements, customers were left with just VMware's vision to buy into but what a vision. The firm laid out plans for a virtual operating system, which would set the technology up to be the platform connecting users to servers, desktops and eventually even mobile devices. Forget virtualisation as a cost-cutting measure, this is virtualisation as the backbone of cloud computing.

Maritz is clearly looking to set his firm apart from the pretenders as in, Microsoft. Sure, they have a hypervisor, but so what? VMware has moved on from just that, and is looking to become a new platform for computing.

Ovum senior analyst Tim Stammers suggested blue sky announcements didn't have much immediate use, other than to set the firm apart from Microsoft. "All of this is some way distant from real-world use. However, it does highlight the huge benefits that virtualization gives by making servers fluid, over and beyond mere consolidation. And for VMware, it was part of a pitch designed to project the company as a major force and not just the latest technology leader set to be steamrollered by Microsoft."

Featured Resources

Application security fallacies and realities

Web application attacks are the most common vulnerability, so what is the truth about application security?

Download now

Your first step researching Managed File Transfer

Advice and expertise on researching the right MFT solution for your business

Download now

The KPIs you should be measuring

How MSPs can measure performance and evaluate their relationships with clients

Download now

Life in the digital workspace

A guide to technology and the changing concept of workspace

Download now

Most Popular

Business strategy

The pros and cons of net neutrality

4 Nov 2019

Microsoft issues statement debunking Teams ransomware rumours

21 Nov 2019

Salesforce takes AWS relationship to the next level

19 Nov 2019

Tests show UK's 5G network is 450% faster than 4G

20 Nov 2019