VMWare shakeup…

Ok, first off, full-disclosure. I am a VMWare (NYSE:VMW) stockholder. Not much, but enough that I sat up and took notice when the news hit this week.  I also work indirectly for EMC Corporation (NYSE:EMC), so I have my loyalties there as well.

VMWare CEO Diane Greene Departs

The news that CEO and co-founder Diane Greene of VMWare was sacked doesn’t surprise me in the least. I’m curious however as to whether this was at EMC’s behest or the stockholder’s, because I’d like to know who is panicing. If it’s the stockholders I am going to start scooping up shares as fast as I can fund my brokeredge account, if it’s EMC, I’m going to have to ask myself “What does EMC know that they aren’t telling?”

When a CEO of a company is so unceremoniously fired, it’s almost universally about PR. Kind of like a lay-off doesn’t actually do any good other than to convince the investors that they are trying to do something. If EMC is responsible for the departure of Diane Greene, it’s because they want the perception in the market to be that “things are changing for the better”

Change is not always for the better.

I have great hopes for VMWare, not as an investor but as someone who really does see the benefits of x86 virtualization. Seriously. High-end systems have been doing multi-partition operations for decades. Mainframe, IBM, Sun, HP. All of them have some form of virtualization, although they call it “partitioning” or something along those lines.

It’s about bloody time that the x86 systems could do it to. The good news is that VMWare makes it realistic, and affordable.

This site is run on an ESX cluster. Included are my internal infrastructure, Exchange, Blackberry, WebMail, MailScanners, Webserver, Active Directory, even a fileserver, all handled using VMs. I also run about a half-dozen “test” systems as well, ranging from Solaris, Linux, to Windows 2008.

I can honestly say that I absolutely could not run my environment the way it is currently without VMWare.  (As it is my power bills are in the neighborhood of $500/month including the additional 10,000 BTU’s of AC I have pumped into my office)

The long and the short of it, I cringe at the idea of having to do this using separate systems, and it amazes me that more companies haven’t embraced the technology sooner.

VMWare currently holds about an 80% market share, world-wide. Most analysts have stated that the closest competitor, Microsoft, doesn’t hold a candle in either reliability or functionality. (VMotion anyone?)

That being said, I know why VMWare is having the issues it is. I remember one company in particular, two CIO’s in a row were adamant against VMWare. Preferring instead to waste money on horribly underutilized, overpriced hardware for an environment that was primarily windows.

They spent MILLIONS of dollars on a “state of the art” datacenter for a windows-based application. (Don’t look at me, wasn’t my decision) It could have easily been done in less space, using less power, less cooling, and more redundancy using VMWare and no-one would have noticed the difference.

Why did they balk at the idea? Because they (incorrectly) perceived it as something new. Maybe the software was new, though VMWare has been around for what in the computer world is ages. ESX server and VI are on version 3.5 now, with some amazingly solid functionality built right in.

VMware needs to get off their collective tails and remind the CxO level community that Server Virtualization is hardly a new concept, it’s been in place for years. And if you can put a VMWare based datacenter together for 60% of the up-front cost and a significantly decreased monthly operating budget, maybe it’s a concept that should be taken seriously.

Given the savings in energy alone, in this age of skyrocketing energy prices, this should be taken very seriously.


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    • on July 15, 2008 at 2:28 pm
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    Given your EMC/VMware ties, I’ll consider you somewhat biased 🙂

    That said, I install VMWare all the time at customers, it’s just fit in so well with storage we kind of brought it in under our umbrella. (I work for an independent so I don’t really have ties to any one vendor). That being said, Microsoft is nowhere near the #1 competitor to VMWare. That would be Citrix/Xen. They’re still at least 6 months behind VMWare, but at their price point, once they get the usability completely in place, VMWare is going to be in some serious trouble. ESPECIALLY since Citrix has started bundling their other offerings as VM’s on Xen. It’s nothing revolutionary, but it’s definitely a way for them to get their foot in the door.

    • on July 15, 2008 at 2:31 pm
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    The other point I’ll make is I get the feeling EMC has a lot more say at VMWare than is let on. A lot of the underlying technology decisions in relation to storage seem to be made to put EMC in as a good a light as possible. For instance: there are a lot of things on VMWare that work rock-solid under NFS that VMWare refuses to support, and without good reason (I’ve asked all the way up the chain).

    That kind of persuasion will only hurt VMWare in the long run. They need to be open to everything, not “whatever runs best on EMC storage”.

  1. Your first point – Yes, I’m biased, but not blind. I like VMWare/EMC because in my experience they are rock solid technologies and they work. if VMWare didn’t work as advertised, I wouldn’t be recommending it under any circumstances. Because pushing an obviously deficient product reflects badly on the consultant making the recommendation.

    I had a co-worker back @ LTL who was a big Xen addict. Seemed like it was a pretty stable operating environment, though requiring thicker-than-usual horn-rimmed glasses to set up. 😉 I agree with you that I think Xen could threaten VMWare in 6-9 months should VMWare not come out with something blindingly amazing, simply because in this economic environment people aren’t going to buy the more expensive of two technologies no matter how solid it is.

    Wonder how profitable EMC / VMWare would find it if they were to make ESX a downloadable and charge for support. The Enterprise customers, IE the one who pay for VMWare anyway, would easily pay up for support, and putting ESX out there for the average joes would ensure it’s foothold well into the future.

    As to your last point – you’re right – EMC does tend to push what works best for them – however that’s an understandable part of business, and I don’t really disagree with their decision. While the pure-scientist in me would love to see the amazing things that could be accomplished is companies actually worked with each other instead of against.

    I run VMWare on NFS because I lack a fibrechannel solution. (Not really interested in iSCSI when it comes down to it, it doesn’t work as well as the PR seems to indicate.) NFS more than meets my needs save for a little performance boost I’d like to see using FC. Running 15-20 VM’s using NFS on three VMWare hosts works fairly well, so I’ll settle for this for now. 🙂

    • on July 16, 2008 at 2:05 am
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    Word on the street is that the hot shots at EMC never saw eye-to-eye with Greene and wanted to get rid of her for some time. I have absolutely no concrete evidence of this, but that is what the EMC people around here (San Francisco/Oakland) are saying.

  2. Yeah, I’ve heard that it was more personal, that she and Tucci had issues dealing with each other.

    But in large part she can’t blame herself, she consented to the sale of the business, I’m sure she didn’t think it was going to last forever.

    No-one starts a tech company to keep it these days, they start it in hopes that 5 years down the line they can sell it to someone bigger for an insane profit. It’s too bad – kind of takes the “I Built This” out of it.

    • on July 17, 2008 at 10:55 am
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    As far as I see, every customer I know has either VMware installed and part of the production environment or in testing to deploy into production. My current client has pretty much their whole environment in VMware and are doing a huge push for legacy stuff into VMware only environment (with Red Hat as the base OS). With the Vmotion and other tools, it is so painless for a migration, I am worried about finding work!
    With a small Dell R905 environment, we are looking at bringing the whole company into 4-6 servers down from 70-80 physical servers. They are even getting a discount from the CO-LO due to the power savings and less infrastructure costs.

    • on July 19, 2008 at 5:35 pm
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    I’d argue that xen and ….I can’t believe I’m even adding them to the list….Microsoft, are more than 6-9 months behind. 2000 desktops and a hundred servers we have spinning on vmware, everything from xp desktops, to huge oracle and sql databases…ALL in a mission critical environment. And vmware within the year will give me the ability to fail all of it over to another datacenter without pricey svc, or resignaturing luns….

    The next generation is going to be scary cool, and I’m in for the long haul. Vmware is absolutely the leader.

  3. TM – I recently did an install where their entire environment was Co-Lo – on Two servers with an AX4 back-end.

    Most of these smaller hosting companies charge you by the rack unit. The great thing about VMWare is that you can host the various systems on a pair of 1U servers with even cheap storage on the back-end. A company called SANSDigital (who makes the small 2-drive CIFS/NFS NAS system I use) is now making a 16 drive Fibrechannel array that starts at about $4k.

    So when you can put an entire corporate infrastructure into a Co-Lo and consume 5U of rack space, the savings in monthly service charges are amazing.

  4. WB – Well – you’ve got to talk about microsoft, even if it’s to ridicule them. 🙂

    Seriously though, I worked with someone who was a big Microsoft VM fan, the problem seemed to be when they installed any other program on their desktop that did anything even remotely specialized with the TCP stack. Either the new app would break, or the VMs would. (usually the latter)

    I’m curious to hear more about how Xen is making inroads. The post above about Citrix incorporating Xen into it’s framework was the first I’d heard of it. Interesting though not unexpected.

    • on July 21, 2008 at 6:00 pm
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    Another thing I *REALLY* like about xen is their management server. It’s a vm running on every single node in the citrix cluster, with a heartbeat running between them all. When one goes down, it fails over to another node automagically. In my limited testing it’s stellar. FAR cleaner than having to maintain an MS sql server + cluster for HA VCS.

  5. Very interesting. Unfortunately I don’t get too many opportunities to dive that deep into the application side of things. I’m having to step back to everything up-to-and-including the HBA/Driver but nothing further.

    It’s the only way I can keep myself sane.

    • on July 25, 2008 at 7:26 am
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    xen is okay, and behind vmware, is definately the most mature product….But I’ve got a fluffy bed named vmware, and I’m going to continue to lie down in it.

    I think one of the main reasons for departure, and probably her last act, was the now free 3i, which will make sure vmware goes meteoric. Every server will come with it as a free option, and since it is agressively the same as the microsoft version(except you can add drs and ha to it, plus it, well, let’s face it…WORKS) microsoft just got schooled in chess technique.

  6. I guess I just don’t understand the logic behind canning someone for doing something that, while possibly expensive in the short-term, is so obviously in the best long-term interests of the company.

    I think the real problem is that stockholders, and by extension Boards of Directors, don’t think long-term. No-one is looking at the long-term health.

    Apple, *WAY* back in the day, used to give computers to schools. Had they continued the practice, they would have beat IBM in the PC market. When people grow-up on a technology, it’s the first thing they move toward when they’re grown-ups.

    I don’t know if anyone knows, but Randy Pausch, the Professor of Computer Sciences at Carnegie Mellon made famous by his “Last Lecture” passed away last week at his home in Chesapeake after an almost two-year bout with pancreatic cancer.

    In his book, he wrote of a $100,000 salt-and-pepper shaker set. He explaned that when he and his sister were at Disneyland as teens, they decided to buy their parents a salt-and-pepper shaker with the $10 they had between them. Walking to meet their parents the gift got dropped and broke. Someone suggested that they take it back and ask if they could replace it. They did. The employees at the park store gladly replaced the gift, explaining that they MUST have mis-packed it for it to have fallen so easily.

    Dr. Pausch and his family has easily directly or indrectly spent or caused to be spent at least $100,000 at the Disneyland resorts. He took his graduate students there when he got Tenure, he’s worked for Imagineering.

    What people now days don’t realize is that it’s acts like that that build lifelong relationships. That simple $10 expense made a customer-for-life.

    I only wish more companies saw that logic, instead of trying desparately for the short-term gain at the expense of their immediate gain.

    • on August 12, 2008 at 12:17 pm
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    Can you detail your hardware setup you use to run the 20 VMs i.e. the server hardware and the NFS backend storage?

  7. Easy – it’s a 3-node VMWare cluster, all three nodes are Dell 2650’s with dual 3.0ghz processors with hyper-threading enabled. A pair of 36G drives for the VMWare OS.

    Each server has 4 gig-e NIC’s (2 onboard, 2-PCIx), 2 links are for front-end communications, 2 links are for NFS traffic.

    THe NFS server is actually the same thing, a dell 2650 (but only 2.4Ghz processors on this one) The NFS server also has six NICs. (2 onboard, 4-PCIx) The onboard NICS I use for management, the other four are bonded together to form a 4Gig pipe going to the NFS. For an OS I’m running CentOS5, pretty much stripped to the gills.

    • on August 25, 2008 at 11:08 am
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    Awesome, thanks. I found disabling hyperthreading on those Dell 2650s allows them to run a lot faster under llinux. It’s surprising how quick these servers are still and at work they’re 3 generations old for us so the engineers don’t use them and are slowly becoming IT services related servers.

    • on August 25, 2008 at 11:09 am
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    Oh I forgot to ask, how many drives and memory on the NFS server and how much memory on the VM boxes?

  8. The NFS server has 5x 146G drives and 2GB/RAM. NFS doesn’t require a lot of memory in the grand scheme of things so I didn’t feel the need to max them out.

    Two of the VM hosts have 4GB in them, one has 5, simply because I had a little left-over. 😉 (4 singles and a pair of 512s) The rest are 4 1gb sticks.

    The network back end is a Dell PowerConnect (don’t recall the model) 24 port Gigabit switch, dedicated to storage. I have a Netgear 24 port for host communications.

    The NFS server has 4x 1GB connections (2onboard/2PCIX) for storage and a dual-port 10/100 card for management only. Note: Bonding the management ports is a bad idea.

    Each VMWare host also has 4 Gigabit NICs on it. Two onboard (host comms) and two PCIX cards (Storage Comms)

    LACP is enabled for the VMWare hosts but doesn’t *REALLY* work unfortunately. (A pity – VMWare could gain a lot by allowing traditional bonding of network connections)

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