VMware 2011: The good, the bad, and the cloudy

VMware was a busy company in 2011. Instead of resting on its laurels, the currently crowned virtualization technology leader continued to be a mover and a shaker — although not everything went its way.

If there’s any doubt VMware continued its virtualization dominance this year, a quick look at their financials puts the issue to rest. According to the third-quarter report in October, VMware’s total revenue for the quarter was $942 million, up 32 percent from a year earlier. That’s a significant accomplishment in a down economy and with companies like Citrix, Microsoft, and Red Hat gunning to take away virtualization market share.

[ Also on InfoWorld.com: Read about how the virtualization blogosphere launched a virtual “Occupy VMware” campaign. | Learn how VMware may be losing dominance in the server virtualization market. | Keep up on virtualization by signing up for InfoWorld’s Virtualization newsletter. ]

So how did VMware do it? What moves helped or hurt the company during 2011? And which decisions were a bit cloudy one way or the other?

Let’s start with the good.

The launch of vSphere 5

vSphere 5 was a major release for VMware, updating the flagship server virtualization platform with more than 200 new features and improvements over 4.x and keeping VMware ahead of the growing and improving competition from Citrix XenServer and Microsoft Hyper-V, as well as from newcomers Red Hat and Oracle.

VMware’s goal for quite some time has been to enable customers to become 100 percent virtualized, and vSphere 5 removed the obstacles that keep people from virtualizing mission-critical applications. One such advance is being able to create monster-sized VMs with 32-way processors, up to 1TB of memory, and increased I/O capabilities. VMware also took things to a new level with advancements in Storage DRS and storage intelligence, an improved VMFS file system, and a number of updates to staple features such as vMotion, Storage vMotion, and virtual networking.

For the most part, VMware has scored very well in the “bugs” category. Beyond all the new features, the fact that there were no show-stopping bugs that required a quick service pack says a lot about the workmanship that went into vSphere 5’s development and testing.

Diving deeper into the management stack

I’m sure the executive team at VMware is tired of hearing pundits talk about the hypervisor as commodity. But in all honesty, isn’t it? VMware has started giving away its once-upon-a-time gravy train hypervisor in the form of ESXi. In the early days of VMware (circa early 2000s), that’s what you bought, VMware ESX Server! It wasn’t until VMware VI3 and vSphere that they included any sort of real application or management stack around the hypervisor. In 2011 VMware understood that the management stack would be its virtual bread and butter, and at VMworld 2011 the company’s management strategy finally became clear to the rest of the world.

Rather than leave operations monitoring, capacity management, and configuration management to the Big 4 or to its own third-party ecosystem, VMware has begun competing with these companies to become the de facto standard management software solution for a VMware environment. For VMware, the strategy is about automation and delivery of application service levels. We need only to watch products like vCenter Operations as they advance to see where VMware plans on taking the market.

But one of VMware’s greatest adversaries may be the fact that end-users don’t necessarily want their virtualization supplier to also be their system’s management solution provider. It may be a trust thing, or it may be a separation of church and state. Either way, it’s another battle for VMware to overcome while also remaining nimble enough to compete against faster-moving startups and traditional management software companies who understand the space — both of whom can provide management for a heterogeneous environment without fear of losing hypervisor market share.

Cloud Foundry: Platform as a service

If you hadn’t heard of it, Cloud Foundry is an open platform as a service (PaaS) that provides a choice of clouds, developer frameworks, and application services designed to make it easier to build, test, deploy, and scale applications. This is a bit different than talking about VMware ESX, which is more of a building block for the virtual data center.

Cloud Foundry was probably one of VMware’s most strategic — and most misunderstood — moves this year. Much like the company’s Spring acquisition, for virtual data center administrators this move may seem like a distraction from VMware’s main purpose of virtualizing the data center.

But at the end of the day it’s about applications, and VMware has done a decent job over the last few years of promoting the fact that applications are what users and businesses use to get work done, and downplaying the importance of the operating system (read: Microsoft). What better way for VMware to help ensure tomorrow’s applications are designed and developed to take advantage of a virtualized data center or a cloud environment or to make sure they will operate smoothly in a VMware environment?

With all of the company’s proprietary software, it is interesting to see how much VMware has embraced the free software development model for its PaaS offering. This move should settle developers’ fears about getting locked in by VMware — a company known in the virtualization community but not so much in the world of development, where it needs to make a name for itself when going up against companies like Microsoft and Amazon.

On the desktop: Workstation and Fusion

Thank goodness the desktop platform isn’t dead! I started my virtualization career back in 1999 with VMware Workstation. When I say this platform has come a long way, that would be an understatement. In 2011, when many had given up on the idea of advancing a workstation-level virtualization platform, VMware continued to improve and enhance VMware Workstation for the PC and Fusion for the Mac.

With more than 50 new features in Workstation 8, VMware greatly improved on the product, adding support for HD audio, USB 3 and Bluetooth devices, as well as improved virtual SMP, 3D graphics, and support for 64GB VMs. VMware has also thinned the line between workstation and server-class products by allowing drag and drop of a VM from a user’s desktop to a VMware vSphere environment.

Fusion 4 also received more than 90 new features, including multicore support, improved 3D graphics, and enhancements to the way Windows applications can be operated making them more “Mac-like.” A big win was full integration and support for Mac OS X Lion and Lion Server. However, Fusion did get a black eye at the end of 2011 when VMware had to backtrack on a popular yet unintended capability: the ability to virtualize older non-server versions of Mac OS X operating systems like Leopard and Snow Leopard.

Moving on to the bad.

vSphere 5 licensing changes: The dreaded vRAM tax

Perhaps more than any other licensing change in the history of virtualization, this one has been trumpeted and beaten to death. Ultimately, this was probably more about timing than anything else, with VMware marrying a new licensing schema with the launch of a major new release of vSphere 5. That proved to be a huge marketing faux pas for VMware that took away from the fantastic list of new features and updates that were added into the new vSphere platform.

VMware probably believes that keeping pricing based upon CPU sockets alone puts the company at risk because of the constant technological changes greatly increasing the number of cores per socket in a physical host server. One way around losing revenue to the ever-growing number of cores per socket was to look beyond the processor and include memory in the licensing equation. VMware originally announced a 32GB and 48GB limit for vSphere 5 Enterprise and Enterprise Plus environments, which it later doubled to 64GB and 96GB to appease customers. Not every customer reacted negatively, but those who believed they were being unduly taxed because they were running memory-heavy applications or high-density environments were quite vocal.

Competitors smelled blood in the water and helped fan flames by calling for unfair “vRAM tax” policies and spreading fear, uncertainty, and doubt (FUD) to anyone who would listen. This marketing faux pas and FUD campaign may have caused more people to look at competing products. While it didn’t cause a massive switch, it did showcase the improvements made in competing server virtualization platforms and opened the door to the possibility of migrating platforms later.

VMware management software: Per-VM pricing

Since the end of 2010, VMware has been rolling out infrastructure, management, and application platform products using a per-VM licensing schema. These include vCloud Director and vFabric as well as vCenter products such as AppSpeed, CapacityIQ, Chargeback, Site Recovery Manager, and Operations.

VMware says this licensing change follows the IT-as-a-service model, and that software licensing needs to evolve to account for actual product consumption rather than arbitrary licensing the physical hardware. The company also claims that with virtual machines as the new unit of consumption, IT organizations need flexible deployment and licensing options that are more usage-based rather than server-based.

Unlike the vSphere 5 vRAM licensing change, this might be one of those “wait and see” things. Will per-VM licensing give users added flexibility or prove more complicated in the end? If you ask a virtual administrator how many processors they have under management, they can usually come fairly close in number since they typically have a good idea how many physical servers they have racked and stacked. But to know how many virtual machines they have on any given host or within their entire infrastructure — something that is regularly in flux — might prove more difficult. It may also prove equally difficult to plan future purchasing decisions. VMware is trying to make this process as simple as possible, but it will take some time to get used to and to work out the kinks. Folks rebelled against the vRAM tax but seem much quieter about what at times amounts to a “density tax.”

Now, what about the cloudy?

Desktop virtualization: Is VMware keeping pace?

Unlike the server virtualization market, VMware is not the 800-pound gorilla in desktop virtualization, and it may not be used to this level of competition or the fact it doesn’t have a strong, commanding technology lead compared to other providers.

VMware did finally get VMware View 5 with Persona Management (technology from the RTO acquisition) and improved PCoIP bandwidth utilization to market, but it took a very long time. And it still felt like it was missing a lot of the “wow factor” features announced at VMworld.

If VMware is going to dominate this market as it has done with server virtualization, the company needs to realize that server-hosted VDI is only one piece of the puzzle. Desktop virtualization is more strategic than that single-use case, and competitor products are already taking a much broader approach to the problem — with actual products currently on the market.

The virtual desktop market still has a long road ahead with plenty of desktop environments left to be virtualized, so don’t count out VMware just yet. But VMware needs to decide how invested it wants to be in this market.

VMware Mobile Virtualization Platform

The mobile platform exploded in 2011, killing off last year’s technology darling, the netbook PC. So where are we with VMware’s Mobile Virtualization Platform or MVP technology? When will employees in the enterprise receive the freedom and choice that we’ve been told about? Good questions.

I can still remember two years ago at VMworld when VMware announced this technology and showed a killer demo explaining how it and our mobile devices would make our lives easier. I could carry a single device for both personal and corporate usage. Despite the mobile platform’s growth in the enterprise, VMware’s MVP technology has yet to materialize. I’m still sold, but my Android device and I are circling in a holding pattern.

This article, “VMware 2011: The good, the bad and the cloudy,” was originally published at InfoWorld.com. Follow the latest developments in virtualization and cloud computing at InfoWorld.com.