VMware's Moves Signal a Shift in Server Virtualization for 2013

by Paul Rubens

Three key actions from VMware punctuate the changes in the server virtualization ecosphere over the last twelve months, but what exactly do they mean for the future?

Another year is now in the rearview mirror, and a look back at the last twelve months shows a dramatically altered server virtualization landscape.

Well, that's what I'd like to say. But the truth is that it's been a quiet year for the most part, punctuated by a few very important events. And what's surprising is it's VMware that's been responsible for the most notable ones.

It's surprising because the big established players in any industry tend to be the boring ones. Take IBM, for example: a company that has boring down to a fine art. It's almost always the start-ups and smaller, nimbler companies that are the ones making waves and seeking attention.

Anyway, back to VMware. In 2012 the company did not one, not two, but three things that are worth recalling. One of these events delighted existing customers and probably did more than anything else to win over new ones. Another of VMware's actions is interesting from an industry-watching point of view. And finally, one may just end up being a game changer in terms of the way we view virtualization technologies in the future.

So what were these key events over the past year? Here goes…

Virtually Speaking The first was the abandonment of the vTax, along with new chief executive Pat Gelsinger's pronouncement in August that VMware was "striking that word from the vocabulary." The vTax, which was a VMware license restriction that meant the total virtual memory used by the virtual machines on a host couldn't exceed a certain amount without triggering the need to purchase additional licenses, was pretty much universally hated.

It annoyed customers, and it confused potential new ones, who could look instead at the relatively simple license terms of other hypervisors from vendors like Citrix or Microsoft. In reality, very few customers ended up having to pay the vTax, but its very existence gave competitors a huge stick with which to beat VMware.

The second was the removal of VMware CEO Paul Maritz, to be replaced by Pat Gelsinger. Maritz had been the company's CEO for four years, and previously had been a (very) senior exec at Microsoft. Maritz was moved across to parent company EMC as its chief strategist, although no one really knows what a chief strategist does.

Not much, apparently, as it was announced in early December that Maritz would be moving to head up the Pivotal Initiative, a kind of blend of all the key existing technology, people and programs from both EMC and VMware, with a focus on Big Data and Cloud Application Platforms.

It's hard to know exactly what Maritz's move means going forward, but when the boss gets moved sideways it usually signals an important change, and not always for the best: think Ray Ozzie at Microsoft.

But it's the third, and final, "thing" that has the potential to be by far the most significant for VMware in the coming years. It's the acquisition of Nicira, a software-defined networking (SDN) startup, for $1.25 billion. The announcement was made back in July, and it's fair to say that not much has come of it yet.

But it's still quite early for SDN. This may be the quiet before the storm. Software-defined networking has the potential to be huge — as significant to data center networking as server virtualization has been to data centers themselves.

VMware got in early in this case and bought a promising start-up, and with the resources VMware can put behind it there's little doubt that the potential of software-defined networking will start to be realized in 2013.

When we look back at the end of 2013, it could well be that the Nicira acquisition will be seen as the smartest and most significant "thing" VMware ever did. And the thing that altered the virtualization landscape the most dramatically.

Paul Rubens is a technology journalist and contributor to ServerWatch, EnterpriseNetworkingPlanet and EnterpriseMobileToday. He has also covered technology for international newspapers and magazines including The Economist and The Financial Times since 1991.

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This article was originally published on Monday Jan 7th 2013
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