First Mover Advantage

The energy that was around at VMworld was electric -- the type of energy that comes from being around an exciting market disruption.  Things are moving fast in the virtualization world -- customers are racking and stacking VMware systems at breakneck speed.  Vendors want to partner with VMware in the hopes that some of its magic will rub off in the process.  Channel players are moving to get a piece of the action.  For you business school majors, VMworld was a hands-on look at First Mover Advantage.  Since most of the server virtualization taking place is around Windows servers, you'd expect Microsoft to chime in pretty soon which, from the looks of things, won't happen until Microsoft's new hypervisor ships which will be about six months after Windows 2008 ships.  In the meantime, VMware is moving quickly to consolidate its first mover advantage.  Unlike what's happened with emerging markets in the past, Microsoft has no margin of error -- they've got to "get it right the first time" just to remain in the game.  There are those legendary stories about how Bill Gates had to personally intervene to get Microsoft to take the Internet seriously.  From the looks of the virtualization world, Microsoft is going to need a similar monumental course correction or else this market slips away without even a fight.