Is VMware the Novell of Virtualization?


I think VMware is currently well positioned to become the Novell of virtualization.  Consider the similarities:  technical superiority, “career-safe” choice, large vested corporate user base, complex pricing models, arbitrary price increases in a captive market, Microsoft buying market share with free and nearly-free product.

Recently, the above comment was made by Guy Chapman on an interesting Network World debate over who has the better hypervisor, Microsoft or VMware.  With respect to Guy, I’d like to touch on the reasons I think this is not (currently) a fair comparison.

First off, a bit of background on Novell for the younger readers.  Novell developed the first network operating system back in the 80’s.  By 1990, any business that had a need for networking was using Novell NetWare.  In a decade, Microsoft’s massive marketing machine had relegated Novell to the background in the corporate world.  MS continued gaining market share with NT, and the Back Office suite of server products.  Y2K gave larger customers a reason to upgrade their old stuff, and most of Novell’s larger customers began moving toward Microsoft, which was cheaper than Novell, and GUI based, which attracted enterprise customers.

You have to hand it to Microsoft.  NT was a solid product, priced right, and with the introduction of Active Directory in 2000, Novell faded fast.

That was then.  Let’s take a look at Microsoft’s track record of innovation over the past decade. What has Microsoft brought to market in the past several years?  Zune?  SCOM?  Windows Mobile?  Bing?  Each one of these is nothing more than a re-hash of a product that someone else brought to market first.  Were any of them better than their predecessors?  The market says no.

In contrast, VMware over the past decade has brought incredible innovations to the market faster even than master innovators like Apple.  Who would have dreamed 10 years ago that one could vMotion a server onto different hardware, and even different storage?  The feature differences between 4.0 and 4.1 releases of vSphere alone are more innovative than anything I have seen out of Redmond for many years.

Microsoft is quite good at commoditizing technologies that have been developed and incubated by others.  I suspect this is what Guy was referring to when he made the Novell comment.  I think the difference here though is the sheer speed at which VMware is innovating.  Microsoft is at least a couple years behind vSphere 4.0, and with new features like VAAI, SIOC, and NIOC, they might have to add another year just to catch 4.1.  Microsoft is capable of throwing amazing amounts of cash at the problem, as evidenced by the current pricing structure of Hyper-V.  But is it enough?

I submit that if VMware continues innovating at their current pace, Microsoft will never catch them, unless there is a massive shake-up.  With the current MS management team and company culture, it is impossible.  Even if there were a tectonic shift this week in Microsoft’s management, and the culture change started next week, you’re still looking at a decade before they can innovate like VMware can today.  Microsoft is a behemoth of a company, and culture shifts are exponentially harder to pull off as a company grows larger.

Rest assured, if VMware is indeed the Novell of virtualization, they’re going to enjoy a couple more decades at the top before disappearing into irrelevancy.

  1. I think it all depends on where the market goes. VMware are definately innovating, but how many companies need the features they're adding at the top of the stack? I can see them losing the SME and some of the mid market who are effectively priced out but I can't see them losing the enterprise anytime soon.

    1. But they just had a huge price drop that was targeted directly at smaller businesses. They can now buy vMotion for very little cash. I think they understand the need to be competitive in that space, and are responding.

  2. VMware is certainly making strides in virtualization, but I'd hardly put them in the same group of innovator accomplishments as Apple. Apple's innovations, I believe, are more diverse and touch different markets, consumer and businesses, whereas VMware focuses on basically virualization for the enterprise business. VMware, now part of EMC, faces similar 'big company' sluggishness. I do, however, see the comparison to Novell – in their bloated and confusing licensing.

  3. Novell (Noorda) had “Bill Disease.” He wanted to keep becoming like Microsoft, buying wordperfect, etc. and made major misteps to copy their success vs. innovate on his platform and evolve away from NLMs and build on the great directory they built. THey didn't.

    Remeber, CEO of VMWare is Maritz … who was at MSFT during all that time, and wasn't he in the BOOP (Bill's Office of the President), a great management structure they should revisit now. Maritz knows what MSFT did to Novell, and is super smart, and likely won't repeat history and keep the company focused on innovating.

    That said, the risk is MSFT commoditizing vmware's core assests until it doesn't make sense to pay the premium, or MSFT gets to good enough. Azure, and what MSFT is doing with hosted data centers could outflank them in time.

    Don't underestimate Maritz, and the team Tucci at EMC. Both are world class. Fun to watch, good for the customer!

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