VMware turns 25 today: Is it a mature professional or headed back to Mom's house?
Beat Microsoft. Set agendas. Became essential. Hiked prices. Now we wait for Broadcom's reign
Special feature In a decade of watching VMware, I've encountered two unverified but irresistible legends about the company.
One is set in the very, very early days of the company, perhaps even before it opened for business. In this legend, IBM approaches VMware because Big Blue had sniffed the wind, realized x86 servers were going to be a huge market, and wanted to make sure it could bring virtualization to the platform. VMware showed x86 server virtualization was possible, but IBM didn't take matters further.
The second tale involves a meeting in the mid-2000s when then-CEO Diane Green was approached by Amazon.com to discuss what at the time seemed like a very odd request to acquire extraordinary quantities of the ESXi hypervisor on slightly funky terms.
In this story, VMware walked away… and Amazon decided to create its own cut of the open source Xen hypervisor to underpin what became Amazon Web Services.
I mention these stories because today, February 10, is VMware's 25th birthday.
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How different might the company be at 25 had IBM engaged, or Amazon made it lord of the cloud? How different might all of enterprise computing be if IBM had prioritized x86 virtualization instead of persisting with its own platforms, or if hybrid cloud and public cloud had been intertwined from the very beginning?
We'll never know.
What we can state with certainty is that VMware at 25 is a singular success: few enterprise software companies ever reach its size or manage to thrive for so long.
Fewer still survive a full-on attack by Microsoft, which came hard at VMware hard in the late 2000s using its favorite tactic of replicating rival products then bundling them at very low cost.
Microsoft tried that with Hyper-V to make it an irresistible alternative to vSphere. But VMware, and its customers, resisted.
vSphere has been the world's server virtualization platform of choice ever since.
The company started life serving developers with a desktop hypervisor so they could more easily test their work in multiple environments. Virtualization was already well known at that time in the mainframe and Unix worlds, but virtual machines on x86 were exotic.
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VMware stretched into server virtualization and made it impressively mature just in time to surf server sprawl and the great recession of 2008 that put IT budgets under the microscope.
EMC saw VMware's success in that era, and cunningly acquired it because it saw abstraction of IT resources as the future. The former storage giant was true to its word in allowing VMware to operate independently, even when that meant it pursued virtual storage that made EMC's arrays less relevant.
Virtual storage also made hyperconverged infrastructure possible, creating a welcome new architectural option. VMware next took sufficient strides into software-defined networking that the likes of Cisco and Juniper felt the need to make similar moves which changed their offerings significantly.
All server makers know doing business with VMware is essential, and Dell knew that must not be allowed to change once its acquisition of EMC gave it stewardship of the virtualization giant.
- Broadcom buying VMware could create an edge infrastructure and IoT empire
- VMware-on-AWS is live, and Virtzilla is now a proper SaaS player
- VMware declares energy-guzzling blockchains 'immoral'
- ESXi-on-Arm is real and VMware will use it to run networks, storage, and security on SmartNICs
All clouds have embraced VMware as a partner they need if they're to offer a hybrid service users want.
So VMware grew and grew and grew, with revenue on track to crack $12 billion this financial year.
Virtzilla, as The Register likes to call it in homage to its dominance of server virtualization, has not been immune to controversy or error. It misstepped badly with price increases that came to be known as "vTax." In 2015 it paid a colossal fine for misleading pricing. In 2022 it wore an $8 million fine after being accused of shifting revenue into more convenient quarters to make its numbers look prettier.
The company has spent the better part of a decade trying to sort out its container strategy, and I know I'm not alone in thinking that the resulting Tanzu portfolio isn't its most coherent or mature offering. Plenty of players think they have a chance to steal VMware's future by claiming the containerization crown and making virtual machines a legacy afterthought.
In recent years the company has also had some software quality problems, which will be tested as cybercriminals focus on its platforms like never before.
VMware users of my acquaintance grumble about price and bundling of weaker products alongside the essential vSphere and vCenter.
But few quit the company. And plenty participate in its user groups, which have generated a vivid and prolix blogosphere.
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Current and former VMware staffers I spoke to for this piece talked about working for the company as a career highlight, often leading to enduring friendships that outlasted their time at the company.
VMware CEO Raghu Raghuram this week posted birthday wishes, and ended his post with: "VMware can celebrate 25 years of success, and look forward to a promising future."
That future will be as the flagship of Broadcom's software division, which last year agreed to acquire VMware for $61 billion. Regulatory necessity means Broadcom has not been able to say much of substance while it concludes the transaction, other than a string of assurances that it treasures VMware and won't upset its customers, partners or wider community.
But when I talk to those stakeholders, they remain nervous.
As should we all. Software companies of VMware's scale and significance are rare, and represent important counterweights to the even larger – and often more ruthless – players that Virtzilla has been able to evade for so long. ®