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?

While others agree VMware is still a solid firm, the cracks are starting to show. Serguei Beloussov, the chief executive of competing virtualisation firm Parallels, said taking the firm public added pressure. "VMware is a great company, it's a bit unfair how its being treated by financial markets," he told IT PRO on the sidelines of VMworld. "It's not good to have the stock below the IPO."

Now that the firm is public, all its woes are made public. "It doesn't have much flexibility, and has to sustain revenues," said Beloussov, which is one reason Green may have been fired.

"I think VMware is a company that has always been very aggressive aggressive in how it's treated partners, shareholders, the board, the chairman and customers," he said. And now, those partners are all developing their own competing products.

"It probably would love to become less aggressive, but it's not clear if it can afford to it's motivated to get increasingly aggressive and payback for what it's lost."

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And with nothing new to boost sales, and pressure from Microsoft, the next few months could be key. "The toughest quarter will be the next quarter," he said.

The futureVMware isn't a firm in danger of disappearing, by going out of business or by acquisition; EMC has too much at stake, and the firm still turns over enough profit. What is at stake is the ability for this company to take its product beyond basic virtualisation and deliver on the cloud computing platform plans it described.

Without the best staff or indeed, any staff onside with the new chief executive, this won't happen. And without shareholders investing, this won't happen. And if VMware spends its energy fending off Microsoft, nothing good will come of the virtualisation market.

VMware can shrug off the past year and make a fresh start, and maintain its competitive advantage over Microsoft. The firm is great at surprises, so hopefully especially for all those looking to virtualisation as the platform of the future the next year is full of the good kind.

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