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What Should One Make of VMware's Shopping Spree?

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Can VMware buy the keys to the cloud?

VMware (s vmw), the company that took the hypervisor mainstream and still controls the virtualization of some 80 percent of servers worldwide, is indulging in some retail therapy as it seeks to change its image to one of concierge of the cloud through its higher-end software and services. Indeed, nowhere is its evolution and ambition more clear than in its recent acquisitions. Let’s take a look.

  • SpringSource, Sept. 2009, $420 million: VMware’s acquisition of Spring Source got the company a Java framework that’s used inside the enterprise and put VMware on the path to creating its own platform as a service for enterprise customers.
  • Zimbra, Jan. 2010, price undisclosed: When VMware purchased Zimbra’s hosted email from Yahoo (s yhoo) it was an acknowledgment that providing a platform might not be enough because platforms rarely sell themselves to VMware’s enterprise customer base, apps do. For customers needing a more visible value-add in order to hop onto the VMware platform, Zimbra was the icing on the PaaS.
  • Parts of EMC’s Ionix IT management business, Feb. 2010, $200 million: This deal gives VMware some tools to measure and automate the provisioning and management of virtualized machines. Since a platform can have hundreds of thousands of VMs, automation is essential.
  • Rabbit MQ, April 2010, price undisclosed: Acquiring the open-source messaging protocol enables VMware to provide a messaging platform that should be flexible enough to live on company servers, a platform or a private or public cloud computing environment.
  • GemStone, May 2010, undisclosed: Gemstone provides a distributed data caching technology to help analyze and crunch data across a number of servers or in the cloud — something VMware can use to make sure its PaaS can handle data without bogging down.
  • EngineYard: This deal may not be done yet. Indeed, EngineYard says it’s not happening. But EngineYard has taken its Ruby on Rails platform to the enterprise, so buying it would enable VMware to broaden beyond Java, which has a venerable history and huge developer base, to Ruby, which is a younger language that is growing in popularity.

The theme running through these deals, aside from helping VMware build a compelling platform as service to rival Microsoft’s (s msft) Azure or various products from IBM (s ibm), is that they’re all aimed at creating an open source-based interoperable cloud experience built atop VMware’s proprietary software. Will this hybrid proprietary/open strategy play out for VMware as it competes with Amazon’s (s amzn) Web Services indirectly and other platforms more directly?

Related GigaOM Pro Research:

What VMware’s SpringSource Acquisition Means for Microsoft

6 Responses to “What Should One Make of VMware's Shopping Spree?”

  1. Lina Inverse

    I wonder … do they have some cunning plan, or are the suits who purged techie co-founder, president and CEO Diane Greene 2 years just flailing around?

    What’s their “vision”? What is it that turns this into something coherent? What’s the elevator pitch?

    I don’t see it.

  2. amigosito

    In my humble opinion, it is a brilliantly differentiated strategy that seems very similar to what the WordPress folks are doing. Hosted blogs are nice, but what if you want to host your blog on your own servers? With WordPress, you have the freedom to do that. And with Buddypress, we’re entering an era where you can now basically set up your own Facebook on your own servers, while retaining full integration with the public-cloud crowd on

    The appeal of private and hybrid clouds for enterprises is remarkably similar. Lots of companies want to get into the cloud but are concerned about SLAs, security, and physical control over corporate information assets. Having the ability to build a private cloud that can (eventually) connect to an offering from Terremark, Rackspace or even AWS will appeal to many. And for SMBs/startups, there is definitely value in a rent-to-own model where you bring hosted IT operations in-house as your organization grows.

    It’s also worth noting that the loyalty of the Java developer community is essentially up for grabs now that Oracle has purchased Sun, and VMware has a chance to pull a Steve Jobs and convince developers that VMware is the best position to help them make money in the cloud. It would be a nice turnaround since the company has alienated its original audience of hardcore enthusiasts (developers, who love Workstation) in deference to the IT operations people (and the vSphere cash cow).