Every child who sat through Transformer’s: The Movie in 1986 remembers the famous scene where Autobot Ultra Magnus cursed and found himself trapped between a rock and certain destruction at the hands of the Decepticons. Until last month, VMware looked in a similar position, stuck between improved Microsoft (News - Alert) and Red Hat virtualization offerings that left the company nowhere to turn.
Unlike Ultra Magnus, however, VMware has found an escape for the time being. While the company still is in danger, according to David Rokita, VP of technology operations for Infrastructure-as-a-Service provider, Hexagrid (News - Alert) Computing, Inc., VMware’s $1.26 billion purchase of Nicira effectively levels the playing field long enough for it to craft a more long-term defense.
“On its surface, $1.26 billion dollars ridiculously overvalues Nicira on a strict dollar per-asset basis,” Rokita wrote on the Hexagrid blog recently. “Under the covers, the strategic importance can’t be [overstated].”
VMware experienced significant growth last quarter and had a huge overall market share, but the company has an eroding strategic position.
On its left is Microsoft. VMware’s new Hyper-V hypervisor is the “easiest, best and most cost-effective platform for virtualizing Windows,” according to Rokita. Windows has made major strides with automation and management of its own network infrastructure, however, and now challenges VMware by making its own virtual machines network-context aware.
“The VM itself is aware of its environment and will implement its networking requirements based on the environment it find itself in,” explained Rokita. “Windows addressed the ultimate in VM portability. Apart from legacy license hugging, there simply is no reason to continue to pay for licensing from both Microsoft and VMware into the future.”
Score one for Microsoft.
On the right is Red Hat (News - Alert). Its Red Hat Enterprise Virtualization (RHEV) platform made major strides with the recent release of version 3.0, which finally addresses the scalability issues that have plagued open-source cloud implementations for years. Key to its improvements is Open vSwitch technology, and “its inclusion in KVM, LibVirt, OpenNebula, Cirtrix Xen etc. continues to move Linux towards a totally flexible network abstraction,” noted Rokita.
The new version of RHEV, according to Rokita, “threatens to reacquire any lost VMs running Linux and move forward one of just a few platforms ideal for running Linux hypervisors and virtual machines.”
This leaves VMware between a rock and a hard place, ready to lose virtualization market share in the Windows market and unable to gain ground with Linux virtualization.
That’s where the brilliance of the Nicira acquisition, costly as it may be, becomes apparent.
“Essentially, with this single purchase, VMware was able to get to near-parity with the new Hyper-V offering,” explained Rokita. In addition, Nicira is a significant contributor to the Open vSwitch project that propels RHEV. This gives VMware a strategic play against RHEV for the time being.
“Of course, VMware maintains the posture that nothing will change in the open source community,” he wrote, “but everyone knows that the mere threat creates uncertainty. Oracle (News - Alert) wrote the book on using ambiguous language and painfully slow updates to de-stabilize open-source projects (MySQL, ZFS, OpenSolaris).”
His prediction is that Open vSwitch project will splinter and uncertainty will affect its productivity in the near future, giving VMware a huge advantage for a couple of years while the community resolves the problem.
The purchase still doesn’t address the Microsoft threat, and Red Hat will be back. But, observed Rokita, “VMware now has time to reconsider its strategic position and fortify it position for coming war.”
Which, while tenuous, is a better than Ultra Magnus fared.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.
Edited by Allison Boccamazzo