Paul Maritz Out As VMware CEO
techcrunch.com
techcrunch.com
“They’re trying to optimize for revenue instead of market share and — good, God — Maritz if anyone should know that they need to occupy the high-share, high-volume, low-price position, which is what Microsoft did to destroy the legacy Unix OS business. VMware is behaving more like a legacy player than anything.”
[1] http://gigaom.com/cloud/vmware-seeking-scale-took-its-eye-of...
They are a legacy player. Virtualization is available in just about every chipset and for free in the Linux kernel and newer Windows. Sure, they may still have some advantages in some areas, perhaps better high end management software, but it's really only a matter of time before everything they do is available at no cost somewhere else.
Anecdotally every one of our customers is looking to get rid of VMware.
But it didn't have to be that way.
Things maybe available at no cost, but you can be damn well sure that a lot of companies want to pay. That's why Citrix does so well from Xen, and RedHat from Enterprise Virtualization.
If VMWare had been more aggressive in their pricing they could have flooded the market to the point where they would have been the default choice, and cheap enough that no one would bother looking elsewhere.
The VMWare customers I know are looking elsewhere too, but it is reluctantly. They don't actively want to move, but the cost savings are just too big to ignore.
Is he the new Head honcho for EMC (a sure promotion)?
Is he the new leader of the (soon to be spun-off) new cloud business?
Is he "out" as in "not related to anything VMWare or EMC any more"?
I think this is just the first act - more to follow soon.
Sounds like there's some restructuring going on there. The retrenchments are coming...
Amazon is winning that market on price and features. And big players like Google, Microsoft etc. are good enough for competition.
Not to mention other established companies like Rackspace, Heroku who have loyal user base.
Their desktop solution is still pretty good, I hear. I don't use it though, as kvm works fine for my needs. And selling to a small market (developers) in competition with multiple free solutions isn't a good place to be.
But why don't they continue to innovate in that market? For Android fragmentation alone there is serious need for virtualization. If they can solve that problem then revenues will go through the roof.
http://www.forbes.com/sites/ciocentral/2012/04/03/be-wary-of...
Leaving that here...(Ignore the article, read the single comment below by Jim Plamondon.)
EDIT:
Oh, just reread your comment, sorry I thought "open source stack" was referring to AWS.
I don't know if they realize that or not.
How will this affect advertising revenue?
Having a design HN hates may correlate with losing significant numbers of users and therefore revenue over time ... but then again it may not, and there's always the opportunity cost quesstion when deciding how to calibrate "significant numbers".
VMWare sells mainly to enterprise buyers. Many of them are a few years away from even beginning to use a public cloud provider like Amazon.
In that market VMWare's competitors are Microsoft (HyperV), Citrix (Xen+CloudStack) and Redhat (Enterprise Virtualization).
VMWare's biggest problem in the enterprise market is price. Any of the companies listed above are significantly cheaper than VMWare, and in the last few years have reached feature parity with VMWare.
VMWare is playing like they have vendor-lock in. The thing they seemed to have missed is that virtualization is accelerating, which means companies can look at what VMWare wants to charge for a new license, look at how much money they will save using (say) HyperV and see that the costs of switching are easily saved often within the first 12 months (sometimes many times over!).
The whole "open" thing is kind of wrong too. VMware might not be open source, but they have open APIs which are just as important in this market.
Then there is CloudFoundry. No one understands VMWare's strategy with CloudFoundry. It is like they are doing the Gillette strategy (give away the razors/PAAS and make money on the blades/virtulization), but then made sure their razors/PAAS could work with any blades/virtulization technologies.
They have been so aggressively open with CloudFoundry it is amazing. They literally have no way to pay for it, and are madly trying to commodidize themselves by making it run on Amazon/OpenStack.
I've never seen any analyst explain it, and I've spent a long time trying to understand it. In the end I've concluded they are trying a platform play, combined with an IBM-like move to consulting. That doesn't really make sense, but not much about it does...
Edit: I should say - I do really like CloudFoundry. I think it is a little early in the market still, but in a couple of years it will be in a very strong position. I guess then they could sell management tools ontop of it...
Broadly selling to "enterprise buyers" a solution they can get for free from someone else is the kiss of death over the long term, no matter how lucrative that market might be.