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If you’ve spent any time reading my blog you know I’m a big fan of VMware’s virtualization platform and the entire management suite vSphere/vCloud and vETC.  I believe it is by far the best technical solution for x86 virtualization. Dynamic Resource Scheduling (DRS) is a compelling feature and a huge value on its own.  The ability for vCenter to automatically adjust workloads across server clusters is unparalleled.  But, I’m wondering if being the best is good enough for VMware moving forward.  Is 2013 the year of the commodity hypervisor?  The tech industry is scattered with the remains of many once upon a time market leaders that were by far the technical leaders in their individual areas.  Few companies such as Cisco remain at the top of their respective markets for an extended period of time even fewer software companies are able to achieve that longevity.

The big question is how much longer can VMware continue to sell vSphere at a premium over both Hyper-V and XenServer?   For shops that are just starting to embrace virtualization (if there’s such a market) how does VMware go in and sell them on the virtues of vSphere over Hyper-V and System Management 2012?  Has Microsoft matured Hyper-V to the point where it is good enough for most environments and those who chose to adopt it never really know what they are missing feature wise with VMware.  When you look at a feature matrix comparing Hyper-V to ESXi for example, it’s hard to differentiate the two offerings without a deeper understanding of virtualization technologies.  For example Hyper-V now supports Cisco’s Nexus 1000 virtual switch.  But what exactly does that mean to the mass market other than a check box?  Is there additional integration allowing vendors to build additional solutions that plug into the virtualized network stack similar to vShield?

We’ve seen this movie from Microsoft in the enterprise and it normally doesn’t end well for the competition.  I’m an old school Netware guy and no one did directory services, File and Print better than Novell.  But that wasn’t enough for Novell to keep its substantial lead in the enterprise as the market expanded.  Microsoft with Active Directory achieved a leading position prior to even achieving feature parity with Netware and NDS.  I’ve seen a repeat of history as I mentor younger engineers.  I often find myself defending the premium associated with VMware to engineers running Hyper-V because it was free with Windows.

Once a competing free solution is deployed in the enterprise it’s difficult to get organizations to change. I had to practically pull teeth to get a previous customer that wanted to further embrace virtualization to move away from Hyper-V when their management structure and technical requirement obviously called for something more robust than what Hyper-V 2.0 could provide at a younger point in its development.  Try having a discussion with the finance guys on how DRS allows for an overall lower total cost of ownership.  I can hear the eyes rolling in the finance geeks heads now. I believe this exemplifies the challenge faced by VMware.  Thankfully, I’m not a product guy and have to figure this marketing strategy out.  I leave that stuff up to the experts but when I read stories like the ones over at GigaOm how EMC is having VMware double down on its core virtualization business it makes me wonder about the long term future of the company.

What are your thoughts?  Do you think VMware is headed down the slow path that saw Novell sold to NetIQ or am I just miss reading the tea leafs?

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