In recent years, VMware has faced major headwinds: its clients migrated from on-premises to public cloud, changed to cloud-native application development paradigm, shifted to subscription licensing, frequent cycles of M&A activities, and unfavorable macro-economic environments. Despite these, VMware registered modest revenue growth. Even though it grew, it knows it is vulnerable. These events and macro trends continue to influence its products and roadmap.
Alvin, Andrew, David, Tracy, and I attended the annual VMware Explore conference to learn the latest. But our main takeaway isn’t about the conference itself but rather the upcoming big day.
As the Wedding Day Finally Approaches…
VMware continues to thrive on a large and loyal datacenter install-base. Many of their customers made their careers on virtualization and with that comes loyalty to both their own skills/certifications and the company that got them there. Besides, many of its large enterprise clients have no feasible alternatives as they are increasingly certain about the impending acquisition. Either they experience or fear degraded service quality, unfulfilled roadmaps, and the anticipated significant price increases. The company has gone through several iterations of major repackaging to protect its most valuable assets. In the next 12 months with an almost certain Broadcom acquisition close, VMware customers should:
- (re)Learn VMware reorganized products portfolio. Constant name changing and product reorg of marquee VMware products creates confusion and reinforces concerns that under the covers VMware is growing more disorganized and is having tough time communicating its value. VMware now has a greater focus on app development and acceleration with Tanzu taking the leading role as the overarching brand for its cloud software offerings.
- Expect Tanzu to remain. Even with a weak market presence and less than desired adoption Tanzu is staying. VMware will fold Aria’s offerings (vRealize reincarnated) under the Tanzu brand. This creates a giant platform offering that’s apparently a powerful combination and aims at helping VMware sell to both the dev and the ops persona. But there are difficulties positioning Tanzu to companies that don’t necessarily look at unifying and bridging these two disciplines.
- Understand that VMware’s view of success is subscription. VMware is pushing its customers to subscription-based offerings. While there are inherent benefits of operating a subscription business, its customers don’t necessarily see it in the same light. Whether you like it or not, VMware will likely not give you the choice for perpetual license.
- Expect using VMware Cloud on <insert your hyperscaler> to speed ransomware recovery. VMware makes it technically easy to restore VMs in a VMware setup on several of the major hyperscalers and test them for any malware infection. Once you are sure you have found an uninfected copy, you can move those back to on-premises for activation and recovery. With improvements to transfer rates on workload restores, you can now restore multiple VMs simultaneously. Regardless, understand that ransomware recovery is not just about technology. It requires a holistic coordination between the IT operations, security and business stakeholders.
- Understand VMware directions for GenAI. VMware is executing on many fronts to capture the AI hype. It is partnering with NVIDIA. Jensen Huang, NVIDIA CEO, shared the stage with VMware CEO Raghu Raghuram. While there was considerable excitement around this announcement, note that VMware abstracts the underlying hardware and the third parties ISVs like Hugging Face deliver the AI software. By running large language models (LLMs) inside their own VMware perimeter, customers can avoid many of the privacy and security issues that surround the public deployments of these AI models. Secondly, VMware is embedding GenAI capabilities to its infrastructure automation solution whereby tech pros will be able to engage with underlying technology systems in natural language.
VMware had a few more product specific announcements at VMware Explore like for vSAN, NSX+, hybrid workforce, and software defined edge. We each attended and would be happy to dive into detail. If you have questions about these announcements, VMware future, its products, offerings, roadmap etc., feel free to reach out. We’ll be happy to help by sharing our point of view.
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