Leading Edge Forum researcher and former Canonical cloud strategist Simon Wardley expressed on his blog today his now two-year-old theory that VMware could end up selling off its flagship virtualization business to focus on its platform business. It’s a far-fetched idea, for sure — VMware is known first and foremost for its market-leading hypervisor and associated management products — but Wardley’s idea isn’t without merit. I just wonder if the timing will play out correctly to even make such a sale a possibility.
A very abbreviated description of his theory is that the hypervisor business will be disrupted both by open source products and cloud-based virtual resources, leaving the real point of differentiation being higher-level platform services. If VMware can build its platform business big enough before the bubble of its hypervisor business shows signs of popping, it can free itself of a future sinking ship while still commanding a sky-high price.
It makes some sense, but here’s the problem as I see it. VMware itself acknowledges that platforms are the future — thus its heavy activity building out its SpringSource business — but the last time I asked someone from VMware what the timeline for such a transition is, I heard it would be about 10 years. Given the current (apparent) pace of cloud adoption — even for more “conservative” approaches like private clouds and IaaS — it’s hard to argue with the 10-year estimate. And with estimates that server virtualization isn’t really close to peaking in terms of adoption, there’s still a lot of money for VMware to make. After all, once customers take the initial step of consolidation, there still are all those vSphere tools to sell.
So, if VMware really would consider divesting itself of its virtualization business, it would take perfect timing to pull it off without leaving too much virtualization money or leaving itself with only a platform business and a not-quite-ready customer base. I think it’s more likely that a large server maker will buy VMware outright and roll the hypervisor into its server business, keeping all the virtualization management and platform products somewhat separate in a software division. It’s probably most possible that neither will happen, though, but speculation sure is a grand pasttime.
Image courtesy of Jonathan Billinger.
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