VMware Chief: Virtualization Has a Decade of Runway

VMware CEO Pat Gelsinger

VMware CEO Pat Gelsinger

Kicking off the company’s VMworld conference in San Francisco this week, VMware CEO Pat Gelsinger made the kind of bold proclamation that CEOs are wont to do in keynotes at their company’s flagship event. VMware would not rest, he told attendees, until the company have virtualized everything.

So how long does Gelsinger intend to keep his people without sleep? Cloud may have surpassed virtualization as the sexy subject du jour in enterprise tech circles, but with VMware broadening its horizons to data center-wide virtualization, the executive and his top lieutenant estimate there’s still a solid decade of growth left in virtualization.

“We’re just getting started on the network, and tere’s a lot yet to do to accomplish all we want to accomplish on the network, in storage, and in management,” Gelsinger told press and analysts in a discussion Tuesday morning. “With networking, we’re at where we ESX was at in 2004. We probably have eight to 12 years to lay out this picture, and the same kind of time for storage. For management and automation, maybe we’re two years into that journey, so we’ve probably got a decade of innovation to deliver there.”

Of course, it’s not as if VMware closes shop and moves onto something new the day after that theoretical final physical workload goes virtual. As server virtualization in large part begot cloud, Gelsinger expects the company’s forays into networking and storage virtualization, and management automation to open up “new areas of innovation that we haven’t dreamed of yet.” And a decade is a very long time in the rapidly-changing world of technology.

Does VMware risk increased channel conflict?

VMware is a company in transition, and it’s apparent it doesn’t yet have all the pieces in place. Its forays into networking and storage virtualization put it in a position where it will have to be careful not to expand its own footprint at the expense of the partnerships that have helped make it dominant in its industry.

While VMware will no doubt work hard to avoid as one IT journalist in attendance at the event eloquently phrased it “kicking daddy in the shins” by coming into conflict with parent EMC’s software-defined storage approach, VMware’s own efforts around software-defined networking could come into conflict with those of major networking partners, including Cisco Systems, one of the biggest and closest partners of both VMware and EMC.

Gelsinger didn’t appear to shy away from the idea of co-opetition which is rife in the industry, but VMware president and COO Carl Eschenbach told reporters he sees VMware’s networking virtualization efforts adding value for Cisco customers, and by proxy, Cisco.

“We’re going to do everything in our power to continue to build the partnership we have with Cisco, and NSXO is going to be a great platform for Cisco infrastructure,” Gelsinger told reporters. “We have big Cisco customers running NSX on their Cisco infrastructure, and every API they provide, we’ll take advantage of.”

Ultimately, the networking virtualization field is a big opportunity, with lots of rooms for various niches, Gelsinger suggested. “We’re just beginning to mine a very rich vein of innovation that we believe has at least a decade of value in it,” he said.

As it transforms its focus, linecard and raison d’etre, VMware also has to be careful of channel conflict. At this week’s VMworld, it announced general availability of its VMware Hybrid Cloud Services, effectively making it an entrant into the world of providing public cloud services. The move also potentially puts it into conflict with its VMware Service Provider Program (VSPP) members, a network of some 10,000 hosting and cloud service providers that have built their business on VMware infrastructure.

Toni Adams, vice president of global partner and alliance marketing at VMware, said that while there are many places the choice between a VSPP and VCHS will be an issue of customer preference, there many places where the two will not go head-to-head. First, VMware is taking a slow approach to the launch, introducing it in the U.S. at first,  meaning that partners elsewhere will have an opportunity to build their own customer bases before VMware arrives in the market. Second, VMware intends to only off “foundational” types of cloud services itself, putting at contrast to many of its VSPP members, which may offer premium or vertically-specialized services.

“Their biggest differentiator is their coverage, and the solution stack component,” Adams said.

For VMware VAR partners, VCHS means another choice in cloud services to resell. Aside from having separate relationships with other VSPP members, VARs can purchase from VMware “cloud credits” which can be redeemed with participating VSPP members, giving product-centric VARs a more comfortable model with upfront margin for selling cloud-based services. VARs can also engage directly with VSPPs through their own partner program efforts, and Adams said those partners will also be able to resell, refer, or otherwise represent VMware’s own VCHS services.

Tim Dufour, president and CEO of Keowna, BC-based VSPP RackForce, said that as is the case any time a vendor partner announces its own cloud products, he had initial concerns over the VCHS launch, fearing it could be competitive. The fact that VCHS is not yet available in RackForce’s target market of Canada has helped assuage those concerns, and he’s come to “embrace” the concept, even investigating how he might be able to extend some of RackForce’s hybrid cloud services out to the VCHS cloud to increase its scale and total addressable market. Plus, having VMware’s marketing machine not just communicating the concept of hybrid cloud, but actively delivering a solution the market is providing validation – and more importantly, end-user education – around RackForce’s own hybrid cloud model.

“From a marketing standpoint, where do you get enough money to get that message out there?” said Brian Fry, senior vice president of RackForce, saying that VMware’s marketing efforts around the initiative will enable RackFord to “fortify our business as well.”