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.
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.