VMWare – A Cautionary Tale for Docker?

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Of course VMWare has made a ton of money over the last ~12 years. They won every battle in ‘The Hypervisor Wars‘.  Now, at the turn of 2015 it looks to me like they’ve lost the wars themselves.

What? Am I crazy? VMWare has made stockholders a TON of money over the years. There’s certainly no denying that. They also have a stable, robust core product. So how did they lose? They lost because there’s not a war to fight anymore.

Virtualization has become a commodity. The workflows and business processes surrounding virtualization is where VMWare has spent the lion’s share of their R&D budgets on over the years. And now that is the least important part of virtualization. With kvm being the default hypervisor for OpenStack, those workflows have been abstracted higher up the Operations tool chain. Sure there will always be profit margins in commodities like virtualization. But the sizzle is gone. And in IT today, if your company doesn’t have sizzle, you’re a target for the wolves.

Of course docker and VMWare are very different companies. Docker, inc. has released its code as an open source project for ages. They also have an incredibly engaged (if not always listened to) community around it. They had a the genius idea, not of containers, but of making containers easily portable between systems. It’s a once-in-a-lifetime idea, and it is revolutionizing how we create and deliver software.

But as an idea, there isn’t a ton of money in it.  Sure Docker got a ton of VC to go out and build a business around this idea. But where are they building that business?

I’m not saying these aren’t good products. Most of them have value. But they are all business process improvements for their original idea (docker-style containers).

VMWare had a good (some would call great) run by wrapping business process improvements around their take on a hypervisor. Unfortunately they now find themselves trying to play catch-up as they shoehorn new ideas like IaaS and Containers into their suddenly antiquated business model.

I don’t have an answer here, because I’m no closer to internal Docker, Inc. strategy meetings than I am Mars. But I do wonder if they are working on their next great idea, or if they are focused on taking a great idea and making a decent business around it. It has proven to be pennywise for them. But will it be pound-foolish? VMWare may have some interesting insights on that.

 

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