VMware targets the SME sector with VMware GO

Some believe that one of the reasons behind Diane Green’s departure as CEO of VMware in July 2008 was the company’s lack of penetration in the SME and cloud computing markets. With VMware Go it has announced a cost-effective solution that provides an on-ramp for the SME sector to cloud computing and virtualisation. This demonstrates the importance of the SME sector to the growth potential of the cloud computing market, and also to VMware’s future.

The SMB sector is being used as the vehicle to drive public cloud computing

The cloud computing market has many challenges, not least of which is the need for some consensus on exactly what cloud computing is. I believe that cloud computing can be simply described as a new delivery mechanism for IT as a service, which operates at three different layers in the technology delivery stack. The foundation layer is the infrastructure level, focusing on how an organisation’s or service provider’s physical IT assets can be transformed so that they offer a shared platform for flexible IT delivery; this is better known as infrastructure-as-a-service (IaaS). The second layer is that of the application and is more commonly known as platform-as-a-service (PaaS), which involves application development and looking at how these applications will operate on the underlying shared infrastructure. Finally, software-as-a-service (SaaS) represents the third layer and is focused on the delivery of specific business services using the previous layers as enabling technologies.

This picture is further complicated by the terms public, private and hybrid cloud, where private refers to an on-premise only approach (behind the firewall), public to a generally available Internet-based service (outside the firewall), and hybrid to some form of mixed approach that is still too loosely defined to be of any use.

Given this level of ambiguity, complexity and a lack of standards, combined with the ‘conservative’ nature of many large enterprise customers (particularly those with security concerns at the top of their agenda), the move towards this new service-driven approach to IT delivery requires either a compelling business reason why any organisation should move to the cloud, or a sense of momentum that makes its widespread adoption a seemingly inevitable consequence of market forces.

I we believe that currently neither of these conditions is prevalent, but the SME sector appears to the most interested in a public cloud approach and can clearly see some definite business benefits. Therefore, vendors are keen to use the SMB sector to drive the further development of public cloud computing, and by implication the use of private and hybrid cloud solutions in enterprise customers: it is too early to say for certain if this approach will work, but enterprise-class customers are beginning to show more interest, and we expect 2010 to be a year that will define the future market penetration potential of cloud computing.

Vmware sees the cloud as a long term solution

The market for virtualisation technology solutions is rapidly becoming commoditised, as the entrance of Microsoft and its Hyper-V product has reduced the entry price for many organisations. The only impediment to the complete communisation of the virtualisation stack, relating to server virtualisation, is a lack of interoperability between the main solutions. However, the Distributed Management Task Force (DMTF) released version 1.0 of the Open Virtualisation Format (OVF) in September 2008, which provides a Virtual Machine (VM) transport format; although basic (it does not support all hypervisor technologies currently) at least begins to address the movement issues of VMs between different vendor solutions.
Therefore, it is not surprising that VMware has recognised that any revenues from the core base technology are only a short- to medium-term prospect. Its movement into the cloud computing market represents at least a ten-year plan to continue to deliver significant revenues from its core capabilities of virtualisation solutions. Interestingly, VMware is also looking at wider markets, with two recent acquisitions (Springsource and Zimbra) that demonstrate its belief that the future will not be dominated by Microsoft, but will be more diverse. This is a bet worth playing, and only time will tell if VMware is correct in its assessment.