John Katsaros

They Eat Their Young

Microsoft has a reputation for being a developer's best friend as the Microsoft platforms are successful in larger part due to the support of their eco-system. There are many examples - SharePoint with several hundred partners and Microsoft's relationship with Citrix. VMware on the other hand doesn't have the same magic touch developing its ecosystem, in large part due to its product line expansion strategy. Probably the best way to think about being a VMware partner is that VMware will develop 80% of the functionality itself and take down 80% of the market opportunities unfortunately leaving partners with a much smaller and technically challenging market slice. At VMWorld there were new examples of this as VMware introduced vShield and in doing so changed the bar for companies trying to add security functionality to the VMware platform - setting the stage for VMware to roll up the bulk of opportunities in this space. And two announced acquisitions, single sign on vendor TriCipher and its $100M acquisition of Integrien for visibility must have taken the wind out of the sails of a dozen companies providing the similar capabilities. VMware is on top of its game so if its ecosystem rules are 80/20 then that's the way the games going to be played this time around.

What a Difference a Year Makes

At the end of August Citrix announced its plans to acquire VMLogix, a company focused on virtual datacenter service such as self-service. In July, Quest announced its plans to acquire Surgient which was largely in the same space. And of course way back in 2006 VMware acquired Akimbi which some people say formed the roots of project Redwood which launched at VMWorld as vCloud Director. While a year ago these products were focused on providing services to the test/dev world, today the focus has changed and they're viewed as the initial service platforms for service providers bringing virtual datacenter functionality on line.  Interesting how this category changed so quickly.

Upgrade Status

In his keynote at VMworld, Paul Maritz predicted that 75% of customers intend to upgrade to VMware vSphere by the end of 2009. The chart below illustrates the anticipated adoption rate. Considering that vSphere shipments started in May and that VMware has such a large installed base largely made up of enterprises, meeting this year's end goal would be one of the more remarkable upgrade adoption rates in the software industry and a real testament of the customer loyalty that VMware has built. If this is the case, then many companies in the VMware ecosystem need to quickly understand the difference that vSphere adoption will make with regards to customer demand.

Apparently Brilliant

One of the more interesting demos that was at VMworld this week was at the Apparent Networks booth. The company has moved its AppCritical performance monitoring software into the cloud so that, rather than buying and installing a monitoring tool, customers can instead go to a self-service portal for monitoring critical business applications. So not only can an IT department sign up for Apparent's monitoring service, but even a business unit can monitor its applications with little or no IT intervention. This is an interesting example of how infrastructure companies can use cloud computing services to modify their business models and reach broader audiences.