On July 2nd 2012, Dell announced that it has entered into a definitive agreement to buy Quest Software. Quest will become part of the Dell Software Group, which is being run by John Swainson, formerly the CEO of CA. In “Dell a Virtualization Management Leader?” posted almost a year ago, we explored how Dell might combine the product assets that it has licensed from DynamicOps (sold by Dell as VIS Creator – see the product review here). The basic idea was the monitoring of the virtualized environment would be combined with the ability of VIS Creator to dynamically provision services so that dynamically provisioned services could be offered with performance and availability assurances. The idea that Dell could bring the entire portfolio of Quest assets to bear fundamentally transforms both the notion of automated service assurance of dynamically provisioned services, and the entire systems management business.
The Current Virtualization Management Landscape
As you can see from the diagram below, the ecosystem for virtualization management is today rich with many participating vendors, and diverse with many different categories. Noticeably absent from the ecosystem in a meaningful manner are the major vendors who dominated the legacy systems management business – IBM, CA, BMC and HP. Dell is present in this current ecosystem through its OEM relationship with DynamicOps which is the source of Dell VIS Creator.
Today’s Virtualization Management Ecosystem (click to enlarge)
Dell as a Virtualization Management Vendor
As you can see from the ecosystem diagram below, this acquisition more or less instantly positions Dell as a leader in the virtualization management space with strong entries in the Performance and Capacity Management segment (vKernel and vFloglight), the Applications Performance Management segment (Foglight), the Cloud Management segment (the existing DynamicOps/Dell VIS Creator relationship), Data Protection through the previously acquired AppAssure assets, and Security through the Quest One and previously acquired SonicWall assets.
Dell Transforms Virtualization Management (click to enlarge)
Implications for Virtualization and Cloud Computing
If Dell successfully integrates its acquired and OEM’ed components into a coherent suite of virtualization and cloud focused offerings (and this is a big if, as this kind of integration at both a technical and business model level is very hard to do), the Dell will have propelled itself into a leadership position in the new virtualization management market, and simultaneously created some serious problems for IBM, CA, HP and BMC. This will likely provoke the following changes in the virtualization management business:
- VMware, Veeam and now Dell are the revenue leaders in the virtualization management market. Solutions from the new Dell and Veeam work across virtualization platforms. VMware’s management solutions are currently specific to vSphere except in the case of vC Ops Enterprise Plus which is currently priced in a manner which makes it an unattractive alternative. Having a vendor like Dell with substantial customer and market reach assets promoting the Dell product set above, which is inherently a cross platform set of solutions, will probably force VMware’s hand into at a minimum supporting Hyper-V in vCenter Operations.
- The Performance and Capacity Management space will likely continue to rapidly commoditize driven by the continuing efforts of the vKernel (now part of Dell) and Veeam teams to lead with free products and to offer customers affordable and easy to implement paid for solutions that provide nearly instant time to value. If Dell gets fully behind this go to market model, it will mark the first time that a vendor of Dell’s size and market reach has gone to market in this manner in the management software market, and it will likely accelerate the demise of the direct “let’s go play golf” enterprise sales models at IBM, HP, CA and BMC.
- Opportunities abound on the APM front. The new APM market is currently being lead on the developer focused front by AppDynamics, the dynaTrace group at Compuware, and New Relic and the new operations focused segment is being created by new vendors like AppFirst, BlueStripe, Correlsense, and ExtraHop Networks. Quest has substantial APM assets that could be deployed in either of these two new APM markets if the appropriate investments in product enhancements and packaging are made.
- A second APM opportunity exists in the integration of the APM solutions with the Cloud Management solutions. The ultimate goal is for the person who orders a service to be able to specify the response time profile of that service and then pay for the level of response time that is chosen. This will only happen when the right APM solutions are integrated with the right cloud management solutions. Dell VIS Creator is absolutely the right Cloud Management solution to start with as it is based upon an enterprise credible cloud management product (DynamicOps). Quest also has all of the right APM assets, they just need to be re-factored to address this use case.
- IBM, HP, BMC, and CA will be forced to react. The legacy systems management vendors will now face the prospect of an even faster erosion of their installed bases (right now most of them do not even know that their management solutions are getting uninstalled as servers get virtualized). They do not realize how out of date and unsuited their APM solutions are for rapidly changing applications running in dynamic and distributed environments. And they are going to have to face the fact that buying a few startups and gluing them to their existing (sinking) battleships will help neither the sinking battleship or the now doomed startup. They are going to have to do something that they have never successfully done before – which is start over with a clean sheet of paper and build a new product and a new business model suited for this new market.
Dell buying Quest transforms the Virtualization Management market. Dell’s presence in the market, customer base, and market reach combined with its product set will put Dell in a strong position to compete not only with VMware, but also to create serious pain for IBM, HP, CA, and BMC. Furthermore, the opportunities to integrate the various Dell solutions look to be able accelerate private and public cloud adoption which will in turn benefit Dell’s core server and storage businesses.