Can You Believe We’re More than Halfway through 2016?


Can you believe that we are over halfway through 2016? With summer in full swing and VMworld 2016 right around the corner, I thought it would be worthwhile to take a look at how VMware is doing and to offer some midyear insights.

VMware seems to be performing as forecast, hitting its targets so far in 2016. It looks on track to report a six percent increase in revenue for year-to-year growth in 2016. This is less than the ten percent increase in revenue year-to-year reported for the second quarter of 2015.

VMware has been building traction with its decisions to start bundling VMware vSphere with VMware vSphere Operations Manager (vSOM programs) and to extend the bundling promotion that offers a fifty percent discount to customers who upgrade their licenses. This upgrade offer has had its deadline extended into the second half of the year, giving VMware channel partners a much better feeling about their prospects moving forward. Current rumors have been addressing VMware’s continued efforts to refocus on the structure of the software platform and to increase incentives to the channel partners for offering more solutions based on packages and bundles.

vSphere bundling is not the only shining star in the sky for VMware at the moment. The company has seen favorable momentum in some non-vSphere products, namely with the acceptance of vSAN and the conversion of NSX. VMware NSX has done so well that VMware is working to increase demand for it further, and to increase the NSK footprint in the data center by dividing NSK functionality into different tiers. I tend to believe we’ll see VMware NSX as a tiers offering, bundled into vSphere and vSphere Operations Manager. Time will tell, but I think VMware NSX will end up being added to the vSphere bundle sooner rather than later.

VMware’s container offerings and its Photon OS for running containerized solutions haven’t performed quite as well as the company had hoped. It appears that VMware might be having some trouble competing with Microsoft and Amazon in the container space. Both are showing the largest traction with containers and with companies considering migrating legacy on-premises pre-existing workflows to the public clouds or redeveloped applications into containers. Greenfield deployments are another area of concern for VMware, as an increasing number of greenfield deployments are being developed by businesses and deployed into the pubic cloud via containers.

Earlier, VMware and IBM announced a strategic partnership that will allow customers to extend their workloads from their VMware software-defined data center (SDDC) to the cloud via VMware’s vCloud Air. This strategic partnership may be one of IBM’s most successful cloud initiatives; IBM is hoping this trend will continue for it.

In my personal opinion, VMware might be missing an opportunity to capitalize on becoming the leader in moving workloads from the private cloud into the public cloud and back again. VMware NSX would be the key to VMware’s becoming successful in that role. I just have to believe that VMware might be missing out on a good opportunity to increase the traction of the vCloud software suite with a focus on automation.

In conclusion, VMware needs to find a way to improve its container functionality and slow down the growth of Microsoft and Amazon container deployments. Failing to do so will leave VMware even further behind in that space. VMware should continue expanding its bundling options; I believe it won’t be long before we see VMware NSX as another bundled option with vSphere. I would love to see VMware expand the vCloud Air marketplace to work with Amazon and Microsoft. All in all, VMware appears to be on track this year, but it will need to continue to innovate in order to continue its growth trend.

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Steve Beaver
Stephen Beaver is the co-author of VMware ESX Essentials in the Virtual Data Center and Scripting VMware Power Tools: Automating Virtual Infrastructure Administration as well as being contributing author of Mastering VMware vSphere 4 and How to Cheat at Configuring VMware ESX Server. Stephen is an IT Veteran with over 15 years experience in the industry. Stephen is a moderator on the VMware Communities Forum and was elected vExpert for 2009 and 2010. Stephen can also be seen regularly presenting on different topics at national and international virtualization conferences.

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