spice works vmware cloud strategy gigaom report

8/8/2019 Spice Works VMware Cloud Strategy GigaOM Report

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VMwares CloudyAmbitions: Can It RepeatHypervisor Success?

By Derrick Harris

Co-Presented by:


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Table of Contents

Table of Contents 2ABOUT DERRICK HARRIS 4ABOUT SPICEWORKS 4ABOUT GIGAOM PRO 5EXECUTIVE SUMMARY 6INTRODUCTION 7IT ALL BEGINS WITH SERVER VIRTUALIZATION 9VCLOUD: VMWARES TAKE ON INFRASTRUCTURE AS A SERVICE 12SPRINGSOURCE: VMWARES FOUNDATION FOR PLATFORM AS A SERVICE

14Internal Platforms First 14Public PaaS Plans Shaping Up 16SAAS: IS ZIMBRA JUST THE FIRST MOVE? 18CAN VMWARE PULL OFF ITS CLOUD VISION? 19Large Ecosystems Mean a Big Head Start for VMware 19

Hypervisor 19 vCloud Partners


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SpringSource Platform 21Public PaaS Partners 21

Competition is Growing By the Day 22Hypervisors 22Public Clouds 23Internal Clouds 24Java Platforms 26

CONCLUSION 27FURTHER READING 28


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- 6 -August 2010

Executive Summary

VMware is pushing an aggressive cloud computing strategy, but questions remain as to

how successful the vendor can be in its quest to become the dominant player at every

layer of the cloud stack. Whether it will succeed to some degree is not in dispute;

rather, the real challenge will be repeating its early hypervisor dominance by getting a

first-mover advantage in advanced virtualization and cloud deployments. While there

are reasons to think VMware can accomplish this, plenty of evidence suggests the

company might have to deal with a life where its market position is never entirely safe.

VMware certainly holds the technology pieces needed to fulfill its mission

hypervisor, management platform, dynamic tools, application platform, applications

and even a public cloud presence. It can presently provide IaaS, PaaS and SaaS

offerings, and continues to evolve its capabilities in all of these areas. Furthermore, its

overwhelmingly large hypervisor footprint means there are hundreds of thousands of

existing customers that will look to VMware for their cloud needs. Additionally,

VMwares large partner base makes it an even more-appealing option.

However, VMwares cloud dominance is by no means guaranteed. For starters, its

hypervisor market share is beginning to slip as organizations increasingly deploy

competitive products in lieu of, or in addition to, VMware. With alternate hypervisors

in place, VMware customers will at least look at those vendors (Microsoft, Citrix and

Red Hat, among others) to provide additional cloud capabilities. Moreover, VMware is

not the leader in public cloud computing, which means an uphill fight is in store for its

vCloud Express program. Finally, cloud-management solutions from vendors large

and small means organizations need not even choose a virtualization vendor to

complete their cloud transitions.

In the end, it looks like VMware should expect to remain a leader perhaps even the

leader as virtualization evolves into cloud computing, but the company should not


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- 7 -August 2010

expect to dominate. Research indicates that most organizations arent yet ready or

willing to fully embrace cloud computing, but they will have no shortage of capable

choices when they are. So despite its progressive vision, VMwares days of 80 percent

market share will be gone.

Introduction

In some ways, its premature to discuss VMwares cloud computing strategy with

VMworld right around the corner, but thanks to ceaseless M&A activity and rumors

over the past year, as well as some leaked information regarding its upcomingvCenter Service Director, we can get a pretty clear idea of whats on the horizon a

full-scale push to transition customers to the cloud, however they define cloud

computing. On-premise or externally hosted, VMware-based or not, the virtualization

market leader seems determined to make cloud computing ubiquitous, and to be an

integral part of it at every level.

The opportunity to succeed at this mission and expand its customer base exists, what

with virtualization adoption increasing so fast.According to a survey of ITmanagement vendor Spiceworks 1 million-plus users, 44 percent already were using

virtualization technologies as of February 2010; that number should creep toward 70

percent by the years end. Further, 41 percent is expected to increase investment in

virtualization software during the rest of 2010.
http://searchcloudcomputing.techtarget.com/news/article/0,289142,sid201_gci1513441,00.htmlhttp://www.spiceworks.com/voice-of-it/http://www.spiceworks.com/voice-of-it/http://www.spiceworks.com/voice-of-it/http://www.spiceworks.com/voice-of-it/http://searchcloudcomputing.techtarget.com/news/article/0,289142,sid201_gci1513441,00.html


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Figure 1: Expected Growth in Virtualization

Source:Spiceworks

Of course, succeeding on such lofty goals will be easier said than done. VMware has

competition across the board, including formidable foes like Microsoft, Red Hat and

Oracle. The proprietary VMware products also face a constant fight from open source

projects and products that are becoming more enterprise-class by the day. Further, a

push for true hypervisor interoperability to enable fully functional, heterogeneous

virtualization environments calls into question VMwares self-centric approach.

In VMwares favor, however, are market share, thought leadership, a savvy

management team and, especially compared with some competitors, a fat stack of

cash. Technology-wise, VMwares wildly popular ESX hypervisor (now called vSphere

Hypervisor) forms the foundation of VMwares cloud efforts. But its just that the

foundation. Dynamic management tools make virtualized environments more flexible,

a growing stable of service-provider partners should make hybrid cloud computing a

reality and an aggressive application-platform strategy means developers might not

need to think about virtual servers at all.

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- 9 -August 2010

It All Begins with Server Virtualization

At this point in its evolution, cloud computing is primarily a hypervisor-based delivery

model. Not only is it cost-effective to house multiple virtual machines (VMs) on a

single overpowered physical server, but it also makes provisioning and reallocating

infrastructure much faster processes than they would be with physical servers. The

vast majority of businesses use hypervisors for their virtualization layer, as do many

large cloud providers.

VMware offers three hypervisors, all of which are available for free:

vSphere Hypervisor (formerly ESXi): A bare metal (or Type I) hypervisor

and the new flagship.

ESX: Likely still the most widely used, ESX is VMwares former bare-metal

architecture, but itwill not be offered in future versions of VMwares

virtualization platform.

VMware Server: This is a hosted (or Type II) hypervisor, which means it

runs like an application atop the operating system. It is not recommended for

production environments because of performance and security concerns.

At this point, VMware has a commanding lead in terms of both customers and number

of servers virtualized, at least within conventional businesses. VMware advertises that

[m]ore than 190,000 customers including 100 percent of the Fortune 100 trust

VMware as their virtualization infrastructure platform. In 2008, researchersestimated VMware hypervisors comprised between 50 and 80 percent of the

virtualization deployments worldwide; if anything, the low end of that range has

probably increased since then. Indeed, according to information provided by

Spiceworks, VMware hypervisors account for 83 percent of Spiceworks customers

virtualized servers. And anAugust 2009 survey by Centrifysignifies an increase in
http://www.vmware.com/products/vsphere-hypervisor/faq.htmlhttp://www.vmware.com/products/vsphere/esxi-and-esx/overview.htmlhttp://www.vmware.com/products/server/faqs.htmlhttp://www.vmware.com/company/customers/http://www.networkworld.com/news/2010/060710-tech-argument-citrix-vmware-microsoft.htmlhttp://www.networkworld.com/news/2010/060710-tech-argument-citrix-vmware-microsoft.htmlhttp://www.centrify.com/downloads/public/centrify_ss050_market_dynamics_and_security_issues.pdfhttp://www.centrify.com/downloads/public/centrify_ss050_market_dynamics_and_security_issues.pdfhttp://www.networkworld.com/news/2010/060710-tech-argument-citrix-vmware-microsoft.htmlhttp://www.networkworld.com/news/2010/060710-tech-argument-citrix-vmware-microsoft.htmlhttp://www.vmware.com/company/customers/http://www.vmware.com/products/server/faqs.htmlhttp://www.vmware.com/products/vsphere/esxi-and-esx/overview.htmlhttp://www.vmware.com/products/vsphere-hypervisor/faq.html


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multi-hypervisor environments, but still shows VMware present in 91 percent of

virtualized environments.

Figure 2: Hypervisor Prevelence, August 2009

Source: Centrify

In VMwares world however, customers get what they pay for and it costs money toget cloud-like capabilities. The companys free hypervisors are not only bare metal,

theyre also bare bones. They will partition a server into multiple VMs, but thats all.

Basic management capabilities and advanced features are part of the paidvSphere

platform and, a step up the stack, thevCenter family of tools. Of importance for

internal cloud deployments, the entry-levelvSphere Essentials comes with the vSphere

Hypervisor, vCenter Server for centralized management and provisioning, and, as of

version 4.1, the oft-discussed vMotion, for live migration of VMs across physical

machines. On the high end, thevSphere Enterprise Plus Acceleration Kit comes

equipped with myriad tools for building a dynamic virtualized infrastructure, including

Distributed Resources Scheduler, Distributed Power Management, Distributed Switch,

Storage vMotion and others.

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Atop of vSphere, the vCenter collection of products brings customers a step closer to

what might be considered true cloud computing. vCenter products include, among

others:

Chargeback: lets IT departments act as service providers by charging

individual departments for resources consumed

Orchestrator: automates tasks like creating, starting and stopping VMs

Lab Manager: gives users self-service capabilities for testing and

development

CapacityIQ: helps customers analyze resource consumption in order to run as

efficiently as possible

AppSpeed: provides in-depth, application-level metrics

Although no one well-versed in cloud computing would mistake even an advanced

VMware deployment for an on-premise Amazon Web Services (the poster child of

infrastructure as a service) the cloud similarities are unmistakable. Provisioning

servers becomes a less timely, costly and administratively burdensome process,

workloads can move between virtual servers on demand, entire VMs can move among

the collection of physical servers and IT departments can charge business units on a

pay-per-use basis. However, true self-service is limited and the infrastructure is not

inherently multitenant. Additionally, VMwares vSphere platform still presents one big

disadvantage for some users looking to eliminate IT headaches: It requires owning andmanaging their entire infrastructure.


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vCloud: VMwares Take on Infrastructure as a Service

To address the threat of public cloud computing to on-premise software sales, VMware

announced its vCloud strategyin September 2008. The end goal of vCloud is to enable

hybrid cloud computing environments where customers can easily migrate workloads

between internal resources and those hosted by cloud providers. Thus far, the two

prongs are the vCloud API and the vCloud Express program; the initiative is still

relatively nascent.

ThevCloud API is an attempt to make application portability a reality among VMware-

based infrastructures. It does this by supporting vApps, virtual appliances that contain

all the information necessary application, architecture specifications, SLA, security

policies, etc. to run the application on a new platform without user intervention.

Using the vCloud API, users can download, deploy and manage vApp applications

identically on any platform supporting the API. In an attempt to increase customer

choice, as well as to create a de facto standard, VMware open-sourced the vCloud API

and even submitted it to the DMTF. It also developed Java and Python SDKs to

expand the scope of the application types developers can create. Already, many cloud

software vendors (Cloud.com, CloudSwitch and Cloudera, to name a few) have

announced support for the vCloud API, as have hundreds of service providers.

The latter group comprises the foundation of thevCloud Express program, which

enables service providers to build multitenant cloud infrastructures based on VMware

technologies. At present, notable vCloud Express partners include Terremark,

BlueLock, Savvis and Hosting.com. Ostensibly, vCloud Express offerings function like

any other public cloud (save for specific features of each service provider). However,

support for the vCloud API means customers can deploy vApps on these clouds with

ease. Because the vCloud API supports deployment across multiple vCenter Server

environments, VMware customers can program their applications to launch new

instances (cloudburst) in and among these service providers offerings when policies

dictate. As vCloud matures, this program could prove appealing to service providers
http://gigaom.com/2008/09/15/citrix-and-vmware-want-to-turn-data-centers-into-clouds/http://communities.vmware.com/community/developer/forums/vcloudapihttp://cloudscaling.com/blog/cloud-applications/vmwares-vcloud-api-forces-cloud-standardshttp://www.vmware.com/appliances/services/vcloud-express.htmlhttp://www.vmware.com/appliances/services/vcloud-express.htmlhttp://cloudscaling.com/blog/cloud-applications/vmwares-vcloud-api-forces-cloud-standardshttp://communities.vmware.com/community/developer/forums/vcloudapihttp://gigaom.com/2008/09/15/citrix-and-vmware-want-to-turn-data-centers-into-clouds/


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wanting to get into the cloud business without developing their own platforms, and

with an existing large base of potential customers. More vCloud Express providers

means more incentive for businesses to use VMware.

Its important to remember, however, that the entire vCloud initiative is still in its

infancy, and there are plenty of areas for improvement, especially on the management

front. VMware is attempting to address some of them with its forthcoming vCloud

Service Director (aka Project Redwood). According to leaked product plans, vCloud

Service Director will provide true interaction between vSphere and vCloud Express

environments, which means customers will be able to manage hybrid environments

via a single interface instead of just being able to port vApps from one environment to

another. It also will support multitenancy on top of vSphere, so users can partition a

single physical data center into multiple virtual data centers. This would enable the

centralization inherent in cloud computing while allowing departments with sensitive

needs (e.g, those dealings with financial or health records) to keep their resources

secure from other departments. Rounding out the cloud-like management capabilities,

vCloud Service Director supposedly will let IT administrators dole out resources in

three distinct models: allocation pools, reservation pools and pay-per-VM.

Aside from the single-pane-of-glass management of vSphere and vCloud Express

environments, the most interesting aspect of vCloud Service Director might be its

incorporation of thejclouds API. jclouds is an open source Java framework that

currently works with a variety of cloud offerings, including AWS, Rackspace, Windows

Azure and VMware. A logical result of this integration is to expand application

portability and management beyond platforms that have adopted the vCloud API. This

would be a win-win: The customer would have an expanded selection of services, butVMware would still get the on-premise virtualization business.
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along with high scalability. ManyGemStone customers, in fact, come from the

financial services, government and defense industries. GemFires distributed nature

and intelligent data-management features produce a solution that is highly available,

delivers very low latency and will scale linearly along with the application. The

GemStone acquisition might have appeared to come out of left field it didnt fall

neatly in line with all the public-cloud talk surrounding VMware and SpringSource

but it puts SpringSource in the discussion with other high-performance, internal

application platforms. These include as Appistry CloudIQ, GigaSpaces XAP, Oracle

Application Grid Suite and IBM WebSphere XD, all of which have a distributed data

layer.

On the database front, its worth noting that VMware is investing rather heavily in

Redis, a NoSQL key-value store. As the types of applications deployed within VMware

environments expand, the company needs to be prepared to provide the right data

layer for the job. For many applications, relational databases will be all thats

necessary, but latency-sensitive and highly scalable applications might require the

capabilities of GemFire and/or Redis. Offering and supporting multiple database types

makes VMware/SpringSource more competitive with larger software vendors likeMicrosoft, Oracle and IBM, which also offer a variety of database options.

According to Javier Soltero, data center architect for SpringSource (and Hyperic

founder), VMwares plan is to make application development extremely easy,

comparable to writing applications for publicly hosted PaaS platforms. Developers will

write applications atop the Spring framework, then wash their hands of infrastructure-

level concerns, leaving them to IT administrators, who will in turn rely on a robust

automation layer.

Soltero acknowledges this is a futuristic vision, although perhaps more in the cultural

sense than in the technological sense. Technologically speaking, VMware has the

building blocks to pull it off. Of critical importance will be the Hyperic monitoring

software, which could keep the orchestration layer abreast of performance issues
http://gemstone.com/customershttp://blogs.vmware.com/console/2010/03/vmware-hires-key-developer-for-redis.htmlhttp://blogs.vmware.com/console/2010/03/vmware-hires-key-developer-for-redis.htmlhttp://pro.gigaom.com/2010/07/report-nosql-databases-providing-extreme-scale-and-flexibility/http://en.wikipedia.org/wiki/Spring_Frameworkhttp://www.hyperic.com/http://www.hyperic.com/http://www.hyperic.com/http://www.hyperic.com/http://en.wikipedia.org/wiki/Spring_Frameworkhttp://pro.gigaom.com/2010/07/report-nosql-databases-providing-extreme-scale-and-flexibility/http://blogs.vmware.com/console/2010/03/vmware-hires-key-developer-for-redis.htmlhttp://blogs.vmware.com/console/2010/03/vmware-hires-key-developer-for-redis.htmlhttp://gemstone.com/customers


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- 16 -August 2010

across the network and up the stack. VMwaresvCenter AppSpeed can provide similar

information at the application layer. When performance, utilization or any other

metrics falls below ITs predefined policies, the orchestration layer likely composed

of new and existing VMware tools automatically makes adjustments on the fly. At

the server-performance level, automatic resource allocation is quite a common feature

already.

Regarding the platform model itself, SpringSource already has this capability, to a

degree, with its Amazon EC2-hosted Cloud Foundryservice. Developers simply upload

their Spring- or Grails-based Java web applications and select a basic configuration

(e.g., single instance, cluster, auto-scalable). Cloud Foundry then attaches Elastic

Block Storage volumes and deploys the application atop a SpringSource tc Server-

Apache web server-MySQL stack. Hyperic monitors the application, adding or

removing instances as necessary and sending alerts if manual intervention is required.

When VMwares internal PaaS plans are realized in a concrete form, the result should

be an offering very different than what most companies are used to. SpringSource will

be the middleware buffer between the IT department (and the underlying virtualinfrastructure) and developers, allowing both to do what they do best. IT can manage

infrastructure, developers can write applications and the SpringSource suite will take

care of the tasks that shouldnt require the attention of either party.

Public PaaS Plans Shaping Up

The internal cloud capabilities are great and prudent but public cloud still

generates the most buzz; VMware is active here too. Aside from the vCloud initiative,

which is largely IaaS-driven (users and developers still must worry about every aspect

of the infrastructure), VMwares PaaS plans thus far have revolved around

partnerships with leading cloud providers. The one thing that ties them all together:

Spring.
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The first partnership, which garnered media attention on par with a new Windows

release, is theVMforce offering with Salesforce.com. From a product perspective,

theres not much to it: Developers build their application using the Spring framework,

deploy it to VMforce and then take advantage of Force.coms features without writing

in Salesforce.coms proprietary Apex language. The whole thing is built on VMware

technology (vSphere, vCloud and tc Server), which could serve as a proving ground for

future public or internal cloud platforms. At a higher level, though, VMforce could

potentiallybring Springs multiple millions of developers to the Force.com platform

and lay the groundwork for Spring as the de facto Java framework in PaaS clouds.

Both of these ends are furthered by VMwares subsequent partnership with Google on

App Engine for Business, where Spring serves as the Java development framework for

the popular-but-underachieving PaaS offering. In addition to its new features like a

MySQL option and enterprise support, Google expects the Spring framework to help

lure enterprise developers. For VMware, its one more major PaaS offering Java

support via Spring.

Soltero says VMware aims to be an incredibly important part of the cloud platform

and management layers, and its certainly its the way. Already, Spring-based Java

applications can run in vSphere environments, vCloud Express environments,

VMforce, App Engine for Business and any variety of other third-party platforms that

support Spring, including Amazon EC2.

Although VMware denies it, a rumor also has surfaced that the company is considering

buying its way into the Ruby PaaS space by purchasing Engine Yard. Such a movewould be intriguing, but not entirely out of the blue. Even without a rumor to plant the

seed of such an idea, it makes perfect sense for VMware to establish a presence in what

many consider the language of the future for web applications. Spring makes VMware

a go-to vendor for running Java applications in virtualized and cloud environments;

Engine Yard could do the same for Ruby applications. Furthermore, Engine Yards
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enterprise-grade PaaS offering, running on Terremarks Enterprise Cloud

infrastructure, would strengthen the already-tight bond between VMware and

Terremark. In 2009, VMware invested $20 million in Terremark, which is already a

vCloud Express partner.

SaaS: Is Zimbra Just the First Move?

With IaaS and PaaS strategies firmly in place after the SpringSource acquisition, SaaS

was the only layer of the cloud computing pyramid where VMware didnt have a strong

story to tell. When VMwarebought open source email and collaboration solutionZimbra from Yahoo in January, that story became pretty clear. In fact, CTO Steven

Herrod all but spelled it out in a blog entry explaining the acquisition. VMware plans

to sell Zimbra as a virtual appliance to existing customers, and it will be designed to

work optimally with vSphere software. (This, by the way, is where many draw the

connection between VMware and CEO Paul Maritzs former employer, Microsoft,

which built an empire developing a platform (Windows) and a suite of applications to

run on it.) He also laid out plans to make Zimbra available as a SaaS offering to its

vCloud Express partners, giving them an easy channel through which to move up thestack beyond IaaS. These promises were confirmed in August, when VMware

announced the Zimbra Collaboration Suite Appliance to rival competitive offerings

from Microsoft, Google, IBM and others.

The question remains, however, whether VMwares application and SaaS plans begin

and end with Zimbra. VMware bought Zimbra in part because a collaboration solution

is a low-hanging fruit in terms of must-have applications, but also because it was

among the most popular downloads in VMwaresVirtual Appliance Marketplace.

Presently, the marketplace consists of 1,450 virtual appliances, many of which

certainly could benefit a large number of VMware customers. This, of course, is in

addition to the countless number of ISV applications on the market. Its VMforce

partnership with Salesforce.com might dissuade VMware from buying its way into the
http://www.infoworld.com/d/virtualization/vmware-buy-20-million-stake-in-terremark-835http://gigaom.com/2010/01/12/in-acquiring-zimbra-vmware-moves-squarely-toward-apps-and-collaboration/http://gigaom.com/2010/01/12/in-acquiring-zimbra-vmware-moves-squarely-toward-apps-and-collaboration/http://blogs.vmware.com/console/2010/01/vmware-to-acquire-zimbra.htmlhttp://www.channelinsider.com/c/a/Virtualization/VMwares-Zimbra-Appliance-Offers-Virtual-Collaboration-Solution-411626/http://www.vmware.com/appliances/http://www.vmware.com/appliances/http://www.channelinsider.com/c/a/Virtualization/VMwares-Zimbra-Appliance-Offers-Virtual-Collaboration-Solution-411626/http://blogs.vmware.com/console/2010/01/vmware-to-acquire-zimbra.htmlhttp://gigaom.com/2010/01/12/in-acquiring-zimbra-vmware-moves-squarely-toward-apps-and-collaboration/http://gigaom.com/2010/01/12/in-acquiring-zimbra-vmware-moves-squarely-toward-apps-and-collaboration/http://www.infoworld.com/d/virtualization/vmware-buy-20-million-stake-in-terremark-835


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- 19 -August 2010

popular CRM SaaS market (unless it buys Salesforce.com), but it seems unlikely the

company doesnt plan to advance its application business.

Can VMware Pull Off its Cloud Vision?

Its undeniable VMware has its hooks in all layers of the cloud stack, both on-premise

and publicly hosted, but that doesnt mean the company can pull off its presumed

quest to be for cloud computing what Microsoft was for PCs. Yes, its in the catbird seat

as far as virtualization goes, but being the leader means everyone else including

Microsoft, Red Hat, Citrix, Oracle and an endless stream of startups is gunning foryou. Nonetheless, VMware presently has an overwhelming lead in both the customer

and partner areas, which ensures it isnt going away, and also gives the company

enough breathing room to fully develop its cloud plans.

Large Ecosystems Mean a Big Head Start for VMware

Hypervisor

As detailed above, VMware has large ecosystems of both customers and service-

provider partners, which gives it a big advantage on the IaaS front. Anyone wanting to

transform their VMware-based server virtualization efforts into an internal cloud will

likely being doing so via VMware management software (true management of multiple

hypervisors is all but nonexistent at this point). VMware, then, stands to make a

fortune if internal clouds catch on as expected. Depending on what level of cloudiness

they require, the various vSphere features and vCenter tools are the most direct routes

to flexible infrastructure management.

Additionally, VMwares hypervisor leadership makes it the first virtualization platform

for which most third-party software and hardware vendors seek certification or decide

to support. Its tight alliances with Cisco and former parent company EMC mean that

enterprises buying into the UCS orvBlockvisions for cloud architecture will have no
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choice but to have VMware as the virtualization layer of their clouds. More generally,

customers of any number of storage, server or networking vendors, as well as ISV

customers, will presently find VMware support within those vendors products far

more common than support for other virtualization vendors. If theyre happy with

these vendors, why not opt for a VMware-based cloud?

vCloud Partners

The vCloud Express program and forthcoming vCenter Service Director only

strengthen the VMware promise. Whether or not customers end up choosing their

vCloud offerings over others, representatives from both Terremarkand BlueLockhavesaid that vCloud Express definitely drives customers to those providers. In fact, vCloud

business has been so good (as has its general VMware-based hosting business) that

BlueLocks Bob Roudebush says that company is not yet considering supporting any

other hypervisor, even as competitive offerings from Microsoft, Citrix and Red Hat

gain momentum. BlueLock sees hybrid cloud computing as the next wave of

outsourcing, and it sees real opportunity to capitalize as VMware beats that drum

louder and louder. With its large footprint in both private and public data centers,

VMware adds a degree of portability that Roudebush thinks will attract customers asthey advance their cloud efforts.

Of course, portability and lock-in are two different terms, but its customer perception

that matters. They might be locked into VMware, but they can run their applications

and VMs in a variety of environments. If vCloud Service Director lives up to

expectations, it will only increase portability. A centralized or, at least, unified interface

to control all of a users vCloud resources takes the learning curve out of moving to the

cloud. No other vendor with strong internal and public cloud offerings has presented

this capability in any concrete form, so VMware could get a serious first-mover

advantage if as the program suggests is the case it unveils vCloud Service Director

at VMworld. Presently, Microsoft looks to be the closest in the race, with its Windows
http://vcloudexpress.terremark.com/http://www.bluelock.com/bluelock-cloud-hosting/bluelock-vcloud-express/http://virtualization.info/en/news/2010/07/vmworld-2010-sessions-published-a-few-recommendations.htmlhttp://virtualization.info/en/news/2010/07/vmworld-2010-sessions-published-a-few-recommendations.htmlhttp://www.bluelock.com/bluelock-cloud-hosting/bluelock-vcloud-express/http://vcloudexpress.terremark.com/


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- 21 -August 2010

Azure Appliance to complement Windows Azure. The exact details on that offering are,

however, yet to come.

SpringSource Platform

In the long run, it could be the SpringSource acquisition that most helps VMware meet

its long-term goal of cloud computing dominance. Everyone, it seems, including

VMware, agrees that application development must evolve to meet the capabilities

encompassed by cloud computing; SpringSource provides the foundational tools to

make this happen. Internal PaaS options exist today, but VMware could produce anend-to-end platform that covers every layer of the software stack. The combined

VMware and Spring communities mean VMware has a large base on which to push

whatever development methodologies and automation technologies it rolls out. Were

already seeing this happen with Microsoft on the cloud services front, where it has

turned its huge customer base into a fast-growing stable of customers for cloud

offerings like Windows Azure and Business Productivity Online Suite.

Public PaaS Partners

And then there are the partnerships with PaaS providers. Calls for cloud standards are

persistent, and VMware is at least on the path toward establishing a de facto standard

for Java frameworks in the cloud. Force.com and Google App Engine are two of the

most popular public PaaS options available now, and VMware representatives have

indicated the company will pursue similar partnerships with other providers.

Furthermore, the Spring framework already is compatible with most IaaS offerings,

including Amazon EC2. To the degree that portability is the basis for standards calls,

the increasing ubiquity of Spring should attract a good number of developers. This

could inspire both their employers and cloud providers to fully leverage the Spring

connection via increased use of VMware software.
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Competition is Growing By the Day

If only it were that easy. Having a large lead in virtualization certainly doesnt mean

VMware is alone; it doesnt even mean VMware is in the best position to drive

innovation. Seeing the promise of and demand for virtualization, other rich and smart

software vendors have forced their ways the market, and are drawing both customers

and praise. This goes double for cloud computing, where established vendors and

startups alike are fighting for space with solutions that, at least in part, aim to displace

the need for VMwares virtualization management tools, and even for its hypervisor.

Hypervisors

VMware might have a commanding hypervisor lead right now, but that isnt

guaranteed to remain the case. As explained above, the hypervisor is presently the

foundation for most cloud platforms, both internal and external. According to data

shared by Spiceworks, although VMware hypervisors comprise 83 percent of its

customers virtual servers, that number has remained flat over the past 12 months

despite an overall increase in the number of servers virtualized. While interest in

virtualization is growing, interest in using VMware doesnt appear to be following suit.

These numbers align with what other recent surveys have found. Microsoft Hyper-V

and Citrix XenServer are gaining users fast, as is Red Hats KVM-based Red Hat

Enterprise Virtualization offering. Theyarent necessarily replacing VMware

installations yet but they are blunting its advance in overall market share. There

are a variety of potential explanations for this: greater interoperability among these

vendors hypervisors and management software, improvements in their virtualization-

management tools and the fact that their free-edition hypervisors are significantlybetter equipped with management tools and performance features than is the free

VMware vSphere Hypervisor.
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Figure 3: Year-Over-Year License Growth, Q409

Source: IDC

Considering that estimates have the current x86 virtualization rate at only 18 to 19percent, with an expected spike to 48 percent by 2012, there is plenty of opportunity

for Microsoft, Citrix and Red Hat to take a chunk out of VMwares market share.

Public Clouds

In the public cloud space, weve already seen that a large footprint doesnt necessarily

equal market dominance. Although VMware has its stable of service-provider

customers Terremark, Salesforce.com, OpSource, BlueLock, Savvis, etc. the

company certainly doesnt have the market cornered. Amazon EC2 is built upon open

source Xen, the Rackspace Cloud uses Citrixs XenServer and IBM recently announced

that its test and development cloud is based on Red Hat RHEV. Nor do Microsoft

Azure or Google App Engine use a VMware hypervisor. These are hugely popular

- 23 -August 2010
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- 24 -August 2010

offerings among users, so even if VMware gathers the most cloud-provider customers,

that wont likely correlate to the most users.

Just recently, Rackspace announced it is spearheading the OpenStack project, which

aims to provide an open source technology platform for deploying clouds. Although its

technically hypervisor-neutral, the presence of Citrix as a partner and its foundation in

Rackspaces cloud infrastructure suggest Xen or XenServer will be the projects

hypervisor of choice. The project is a worthy foe for all proprietary cloud offerings,

including VMwares, because it boasts a large team of vendor contributors, and the

foundational elements already have proven themselves within the Rackspace Cloud

and NASAs Nebula cloud.

Internal Clouds

VMware faces even more competition in the internal-cloud market, where cloud

management software is turning the hypervisor into a commodity. Our recent report,

Defining Internal Cloud Options: From Appistry to VMware, we detail a number of

vendors including Appistry, Eucalyptus, Enomaly, Joyent and Cloud.com that

enable internal IaaS and/or PaaS independent of the underlying hypervisor. Since thatreport was published, even more startup options have emerged, including Nimbula,

thebrainchild of the team behind Amazon EC2. As long as some hypervisor is in place,

platforms like these will handle the resource-pooling and provisioning.

Further competition comes from the Big 4 systems management vendors, all of whom

have stepped up their virtualization- and cloud-management capabilities. CA

Technologies and BMC Software, in particular, have been pushing cloud-resource

management very hard. They have reputations for cumbersome and overpriced

products to overcome, but CA, especially, appears to get enterprise-level cloud

management.
http://www.jackofallclouds.com/2010/07/state-of-the-cloud-july-2010/http://gigaom.com/2010/07/18/openstack/http://pro.gigaom.com/2010/07/why-openstack-has-its-work-cut-out/http://pro.gigaom.com/2010/06/private-cloud-implementation-guide/http://www.readwriteweb.com/cloud/2010/06/former-aws-execs-launch-nimbula.phphttp://www.zdnet.com/blog/gardner/bmc-software-rolls-out-cloud-focused-lifecycle-management-solution/3661http://pro.gigaom.com/2010/05/cas-cloud-computing-plans-explained/http://pro.gigaom.com/2010/05/cas-cloud-computing-plans-explained/http://pro.gigaom.com/2010/05/cas-cloud-computing-plans-explained/http://pro.gigaom.com/2010/05/cas-cloud-computing-plans-explained/http://www.zdnet.com/blog/gardner/bmc-software-rolls-out-cloud-focused-lifecycle-management-solution/3661http://www.readwriteweb.com/cloud/2010/06/former-aws-execs-launch-nimbula.phphttp://pro.gigaom.com/2010/06/private-cloud-implementation-guide/http://pro.gigaom.com/2010/07/why-openstack-has-its-work-cut-out/http://gigaom.com/2010/07/18/openstack/http://www.jackofallclouds.com/2010/07/state-of-the-cloud-july-2010/


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Forrester recentlyreleased a studyindicating that 95 percent of businesses are not yet

advanced enough in their virtualization use to be ready for true internal clouds.

Furthermore, surveys, including Spiceworks recent SMB Cloud Computing Adoption:

Whats Hot and Whats Notsurvey, indicate that despite sky-high predictions for

cloud-based revenue, many companies arent really considering cloud computing as an

option. Citing concerns over security, performance and reliance on an unproven

model, 62 percent of Spiceworks respondents are not and have no plans to use cloud

services in the next 12 months.

Figure 4: Spiceworks Respondents With No Plans to Deploy Cloud Services

Source:Spiceworks

Of those Spiceworks customers that are using cloud computing already, 51 percent are

using public cloud resources, compared with 28 percent deploying private clouds, and

only 21 percent running hybrid clouds. Assuming these numbers are accurate across

the corporate landscape, one has to wonder whether VMware will be the clear choice

as the management platform when the vast majority of companies are ready,

technically or culturally, to deploy their own clouds.

- 25 -August 2010
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Figure 5: Deployed Cloud Solutions

Source:Spiceworks

Java Platforms

When it comes to SpringSource (read Java platforms), the competition might be

even more daunting for VMware. Aside from the aforementioned application

platforms supporting Spring, the two biggest Java platform vendors are IBM and

Oracle. SpringSource is making a lot of moves and, along with its VMware parent

company, is pushing a progressive envelope, but IBM and Oracle have lots of

- 26 -August 2010
http://www.spiceworks.com/https://www.ibm.com/developerworks/java/http://www.oracle.com/us/technologies/java/index.htmlhttp://www.eweek.com/c/a/Application-Development/Java-Developers-Better-Oracle-than-IBM-785399/http://www.eweek.com/c/a/Application-Development/Java-Developers-Better-Oracle-than-IBM-785399/http://www.oracle.com/us/technologies/java/index.htmlhttps://www.ibm.com/developerworks/java/http://www.spiceworks.com/


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customers and lots of industry cachet. Its certainly conceivable that Spring will

become the go-to Java platform for certain classes of developers, but it will take a lot of

work to dislodge IBM and Oracle from large enterprises. As highlighted in our

Defining Internal Cloud Options report, Oracles Application Grid and IBMs

WebSphere Extended Deployment already offer internal cloud-like platforms for Java

applications built on WebLogic and WebSphere, respectively.

One would be remiss to dismiss Red Hat, with its JBoss Enteprise Application

Platform, as a serious contender, too. Already, startup cloud-platform provider

Makara is offering a Java platform optimized for JBoss applications.

Conclusion

If the cloud computing market were a Las Vegas sports book, the betting option might

be whether VMware or the field (that is, any other vendor) will end up with the highest

market share. Against any single vendor, VMware is the hands-down favorite its

solution set covers nearly every layer of the cloud stack, and its server, storage and

networking partners fill in the rest. Plus, VMwares progressive vision shows thecompany has a plan in place to evolve along with IT. And dont forget about its

seemingly insurmountable lead in hypervisor adoption, which will serve it very well

at least in the short- to mid-term.

Whether VMware can maintain a higher market share than the rest of the field

combined over the long term is not such an easy answer. It has competition at every

turn, and the competitors are getting bolder as they continue to chip away at VMwares

advantage. The hypervisor eventually will become a commodity, which leaves

management software and cloud platforms as the ultimate competition spaces. Its still

anybodys game at this point, and the smart money still is on VMware to be a leader,

maybe even the leader, but it wont likely see a repeat of its server virtualization

dominance as cloud computing really takes hold within the next few years.
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Further Reading

How to Thrive as a Hardware Vendor in a Cloud-Centric WorldIn the name of large-volume sales, vendors are feeding a growing monster, the cloud,

that ultimately hopes to steal their sales. This concern applies equally to server

vendors, and that as the cloudscale market gets more crowded, the long-term

solution is investing in a hybrid strategy or getting into the software racket.

Defining Internal Cloud Options: From Appistry to VMware

In this report, we examine cloud application platforms, hypervisor-based clouds,internal infrastructure-as-a-service clouds, and high-performance computing clouds,

in addition to looking at hybrid cloud solutions and underlying server architecture.

Evolution of the Private Cloud

This report looks at the future for hardware and software in enterprise adoption of

cloud-like systems, or private clouds, as well as the role that major players are likely

to take in its ongoing development.

VMForce: Who's the Biggest Winner

With VMForce, we examine who is the bigger winner in this partnership

Salesforce.com or VMware whos the biggest loser, as Microsoft, Oracle, IBM and

the entire SaaS-based CRM community all seem to have taken hits.

Let the Private-Cloud Race Management Begin

Buying 3Tera brought much-needed cloud application- and resource-deployment

capabilities into CAs already-impressive fold, and for a few days it looked like CA

was poised to dominate systems management in the cloud. Then EMC sold its Ionix

systems-management product line to VMware and perhaps leveled the playing field.
http://pro.gigaom.com/2010/08/how-to-thrive-as-a-hardware-vendor-in-cloud-centric-world/http://pro.gigaom.com/2010/08/how-to-thrive-as-a-hardware-vendor-in-cloud-centric-world/http://pro.gigaom.com/2010/06/private-cloud-implementation-guide/http://pro.gigaom.com/2010/06/private-cloud-implementation-guide/http://pro.gigaom.com/2010/05/report-the-evolution-of-the-private-cloud/http://pro.gigaom.com/2010/05/report-the-evolution-of-the-private-cloud/http://pro.gigaom.com/2010/05/vmforce-whos-the-biggest-winner/http://pro.gigaom.com/2010/05/vmforce-whos-the-biggest-winner/http://pro.gigaom.com/2010/02/let-the-private-cloud-management-race-begin/http://pro.gigaom.com/2010/02/let-the-private-cloud-management-race-begin/http://pro.gigaom.com/2010/02/let-the-private-cloud-management-race-begin/http://pro.gigaom.com/2010/05/vmforce-whos-the-biggest-winner/http://pro.gigaom.com/2010/05/report-the-evolution-of-the-private-cloud/http://pro.gigaom.com/2010/06/private-cloud-implementation-guide/http://pro.gigaom.com/2010/08/how-to-thrive-as-a-hardware-vendor-in-cloud-centric-world/http://pro.gigaom.com/2010/08/how-to-thrive-as-a-hardware-vendor-in-cloud-centric-world/


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Want more information?

Contact Derrick Harris, the author of this report,

or any of the other experts at GigaOM Pro.

Discuss this report online.

Suggest a research topic.
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