The cloud rains on VMware’s parade

analysis
Feb 5, 20162 mins

The numbers aren't good for VMware and other companies that profited from old-school data centers. Could this be the beginning of the end?

floating umbrellas against a blue cloudy sky
Credit: iStockphoto/Thinkstock

We’ve seen the recent headlines regarding job cuts at VMware. As John Ribeiro reports, “The company has been facing challenges in its software business as its customers are increasingly using public cloud providers like Amazon Web Services and Microsoft Azure.”

It’s not only VMware. All technology companies that rely on revenue from traditional data center, as VMware does, are failing to see the growth they used to.

Most of us in the know have seen this day coming, but weren’t sure when it would be here. It may be here now.  

Don’t cry for VMware and other enterprise software players — their businesses will remain cash cows for years to come. Moreover, VMware has been involved with the cloud, and perhaps it will come up with a hit product or service. (Not likely — big companies don’t seem to innovate well.)

Bottom line: Enterprises want to get out the data center business. Verizon Communications has started a process to sell its data center assets, hoping to fetch more than $2.5 billion. Other large enterprises may not be selling, but they aren’t expanding their on-premises systems either. Instead, they are attempting to move as many workloads in the public cloud as they can.

Could this be the beginning of the end? It never goes how we think it will, and I suspect VMware has some good quarters left. That said, the the use of cloud computing will slowing and surely change the way we consume applications and build infrastructure.

David Linthicum

David S. Linthicum is an internationally recognized industry expert and thought leader. Dave has authored 13 books on computing, the latest of which is An Insider’s Guide to Cloud Computing. Dave’s industry experience includes tenures as CTO and CEO of several successful software companies, and upper-level management positions in Fortune 100 companies. He keynotes leading technology conferences on cloud computing, SOA, enterprise application integration, and enterprise architecture. Dave writes the Cloud Insider blog for InfoWorld. His views are his own.

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