On January 27th, VMware made some superficial and significant changes to its management team. We review those changes and which ones are important:
- Carl Eschenbach, who was previously VMware’s Executive Vice President of Worldwide Field Operations, was named Co-President, Customer Operations.
- Richard McAniff, who was previously VMware’s Executive Vice President, Products and Chief Development Officer, was named Co-President, Products and Chief Development Officer.
- Tod Nielsen, who was previously VMware’s Chief Operating Officer, was named Co-President, Applications Platform.
- Mark Peek, who was previously VMware’s Chief Financial Officer, was named Co-President, Business Operations and Chief Financial Officer.
- Paul Maritz, who was previously the Company’s President and Chief Executive Officer, will continue to serve as the Company’s Chief Executive Officer.
So what does this really mean?
- Carl Eschenbach was previously in charge of Field Operations and is now in charge of Customer Operations. Since all customers are in the field this simply means that the person who has done a great job driving VMware’s sales and customer penetration has a new title.
- Richard McAniff was previously in charge of all products. No matter what business unit a product belonged in, and no matter what product a developer worked on, that developer reported up to Richard McAniff. So the person who was in charge of all product development (and who has done a great job at the same) now has a new title.
- Mark Peek, formerly the CFO now runs Business Operations. This sounds like he has assumed the COO role that Tod Neilson used to have. We will have to learn more about what is different or not about being in charge of “Business Operations” vs. being “Chief Operating Officer”.
- Paul Maritz has relinquished the President title but retains the CEO title. The bottom line is that the President title is meaningless if you have the CEO title. So Paul Maritz remains fully in charge.
- Now for the interesting part. Tod Nielsen runs the Applications Platform business at VMware which certainly includes vFabric, and may include other bits as well.
To understand the impact of this we have to look at two aspects of this situation. The first is that we need to understand what VMware is in comparison to Microsoft. Microsoft has been the dominant systems software vendor on the planet every since Windows NT was introduced, and has also been a very dominant applications platform vendor. VMware is arguably the most important systems software vendor on the planet today, but has a minor footprint as an applications platform.
What is the difference between systems software and an applications platform? All applications platforms (Windows .NET, Tomcat, JBoss Applications Server, IBM Weblogic, Oracle (BEA) Websphere, Ruby) and coutless others qualify as systems software. But not all systems software (Windows, Red Hat Linux, VMware vSphere) qualifies as an applications platform. Applications platforms are a category of systems software that provide API’s and services to applications. VMware is a very strong systems software player, but despite the fact that it has a Tomcat compatible applications server (vFabric) VMware is a has a very small presence in the applications platform business – especially when one compares VMware’s position to the number of applications running on .NET, Tomcat, JBoss, WebLogic, WebSphere, and Ruby.
For VMware this is the war that ultimately matters. The reasons are twofold. First of all, the longevity and value of any systems software platform is ultimately tied to the applications that rely upon it. VMware has lots of applications running on it, but today 99.9% of those applications run in guest operating systems where there is no real tie between the application and a piece of VMware software. In other words, today, one could move almost 100% of the applications that run on VMware off of VMware with no impact upon the application whatsoever.
The second reason for the war lies in the contrast with Microsoft whose application platform is .NET. If you write your application to .NET it is going to run on the .NET CLR, which means it is going to run on Windows. The Microsoft Windows Azure Cloud is based upon providing a .NET/SQL Server PaaS cloud to every Microsoft developer that has ever built and deployed an application to the Microsoft applications stack (which is not Windows, but which is .NET, SQL Server, SharePoint, and Exchange). Microsoft is going to pull out all of the stops in terms of making it easy and seamless for developers to move applications back and forth between internal .NET/SQL Server environments and Windows Azure. This will be the single greatest strength of the Microsoft Windows Azure Cloud and the single greatest threat to VMware.
To counter .NET and Windows Azure, VMware needs a robust applications platform and strategy. There is probably no person on the planet better suited to run this effort for VMware than Tod Nielsen. Tod ran the programs at Microsoft designed to get third party developers to use Microsoft tools and build applications to the Windows API’s. Windows did not win because it was a better OS, it won because Tod’s team at Microsoft got more ISV’s and corporate developers to build applications to Windows than to the then prevailing competition (pre-Linux versions of Unix). Todd then was in a similar role at BEA, the vendor of the market leading Java applications server – Weblogic. BEA was ultimately acquired by Oracle, but not until after J2EE with BEA in the lead had become a dominant applications platform for business critical applications.
What to Expect from the VMware Applications Platform Group
One thing we already know for sure. Absent a major change in direction, VMware’s application platform strategy is related to, but not dependent upon its data center virtualization strategy and product (vSphere). Clearly there will be benefits to developers and to operations in running a vFabric application on vSphere. But VMware has already made it possible to run vFabric applications on Google AppEngine, and in the SalesForce.com cloud – VMForce. It is likely that over time the vFabric offerings will become as important or more important than vSphere itself to VMware and to enterprise customers – as vFabric is VMware’s answer to Microsoft Azure and to the vendors who are promising infinitely scalable cloud based systems. Look for VMware to pitch vFabric as the way for every vSphere and vCloud cloud vendor to offer a PaaS cloud, and look for VMware to aggressively take on the Java based application platform vendors in the enterprise (IBM, Oracle, and Red Hat as well as Apache Tomcat). Don’t be surprised if VMware finds a way to run vFabric on Amazon EC2, and thereby co-opt some Amazon Beanstalk (Amazon’s forthcoming PaaS cloud offering).
Todd Nielsen has already succeeded twice at what he is now being asked to do at VMware – once at Microsoft and once at BEA. This time what hangs in the wind is VMware’s ultimate destiny. Will VMware be the device driver to the dynamic data center (vSphere), or will VMware be that and the next generation application platform for IT as a Service and Public Cloud based applications? The answer is in the hands of Tod Nielsen and the newly formed Applications Platform group.
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