VMware eased into its annual conference in San Francisco on Aug. 31 with a few small announcements about cost savings and industry partnerships. The spotlight now turns to Chief Executive Paul Maritz, who will give a Sept. 1 keynote address and press conference that will be VMWorld’s center of attention.
Maritz, who took over as CEO a little more than a year ago, has a big job before him: To sell VMware’s story about what’s next on its product road map at a time when Microsoft is making inroads into the market for virtualization software. The task is especially important given some confusion about what products VMware has in the hopper
Companies use virtualization software to make their servers more efficient and save on hardware costs, and VMware has grown to $1.9 billion in annual sales by grabbing leadership in that market. Now, it’s fighting Microsoft and others to control other aspects of companies’ data center operations, including the tools they use to manage applications, servers, and other hardware.
Last fall, VMware was talking up what it described as future “virtual data center operating system" software to help companies manage servers, disk drives, networking devices, and applications. Now, it’s playing down that sales pitch.
The so-called ‘VDC-OS’ “was more of a concept than software,” chief operating officer Tod Nielsen said in a recent interview. The company was using the term to describe future capabilities of its flagship vSphere software, he says. Bogomil Balansky, VMware’s vice-president of product marketing, says “we’ve bandied around a lot of different terms for what to call this piece of software.” A better way to think about VMware’s roadmap is that future versions of vSphere will let companies schedule computing jobs on virtualized hardware, and will let software applications perform faster and more reliably, he adds.
Getting the branding right will be key as customers look for more help cutting IT costs during what’s still a tight environment for technology budgets. VMware, a hyper-growth story only a few years ago, is expanding more slowly than it was during companies’ pre-recession buying binge on virtualization software; sales were flat in the second quarter. “It’s hard to know what [percentage] this company will grow in recovery,” says Jeffries & Co. research analyst Katherine Egbert, who recently downgraded VMware’s stock to “underperform.”