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?

Taking on MicrosoftMaritz said he's not concerned by what he called the "great and mighty" Microsoft, either. He and other VMware folks IT PRO spoke to repeatedly stressed that Microsoft's virtualisation wish list, which it outlined three weeks ago, shows the great and mighty giant is simply following VMware's lead, from a distance of some two years.

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But Reza Malekzadeh, EMEA vice president of products and marketing at VMware, explained to IT PRO later on the sidelines of the conference, that it wasn't so easy to ignore the monster software firm. "I'd be stupid and arrogant to say Microsoft is not one to be concerned about," he said, but reiterated the theme that Microsoft is still playing catchup. "Microsoft is list-matching today we've got a lot more things coming down the pipe."

One area Microsoft might offer a challenge is cost, as VMware is oft criticised for its pricey products. "When Microsoft says software costs too much I don't give a well, no comment," Maritz cheekily told reporters.

Another sweet spot for Microsoft is the small and medium business (SMB) market. VMware is directed through complexity and price at bigger corporations. But Martiz said new features coming out soon would put VMware in a good position to dominate that area too. "We think we have relevance at that end of the market," he said.

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As Maritz noted: "Every software vendor has to deal with the reality of competition." And now it's simply VMware's turn.

Staff angstMartiz suggested that the strategy preview wasn't just for customers, but to let worried staff know what direction the firm was heading in. In a press conference, he admitted some angst in his firm hard not to in the wake of Rosenblum's departure but said the strategy unveiled at VMworld would give his staff a reason to stay.

"What angst people have or may not have will be a passing phenomenon," he said.

"People wanted to know what our strategy and direction was," he said. After laying it out at VMworld, he said: "I believe people will respond positively to that."

And hopefully he's right; VMware will need its best on-board to battle Microsoft.

Is the shine still there?Asked if the shine had gone off VMware, Malekzadeh told IT PRO: "I think things are still pretty shiny."

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He cited the firm's continuing growth "not many companies our size are still growing at this pace" as well as the firm's turnover and massive R&D spend as signs of health. "There are growing pains, but overall, VMware still holds its fundamentals," he said.

VMware has 120,000 customers. "That's the biggest competitive advantage," he said, as people "look to see what other customers are running."

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