The Virtualization Matrix has been updated with vSphere 5.5, Windows Server / System Center 2012 R2 and related products (Cloud, Desktop Virtualization, Network Virtualization etc.)
The fight for the virtualization-vendor “top spot” is certainly not fading away, if anything it has intensified and quickly expanded into strategic peripheral parts of the ecosystem.
Recent product releases from both, market leader VMware and challenger Microsoft make it clear that (while rapidly updating fundamental hypervisor and hypervisor management capabilities), focus has shifted into areas of software defined networking /storage and (above all) cloud management – aiming to gain control of the quickly emerging cloud ecosystem and address the needs of the “new age” Service Providers.
The trend is clear – IT resources will increasingly be provided from public cloud resources.
VMware and Microsoft will focus on convincing Service Providers to choose their hybrid cloud management layer – in order to make it the “default gateway” into this future resource pool, the vendor’s own public cloud services …
Both are asking Service Providers to become “brokers” of services, to succeed they have to provide Service Providers with a vision of a sustainable and profitable business model in this future ecosystem …
Both companies recognize that virtualized infrastructure and services will increasingly be provided / consumed from off-premise resources. While this is a gradual process, the trend is clear, ultimately reducing future revenue scope for these vendors with classic on-premise “enterprise virtualization” footprint. This is forcing both to provide not only leading virtual infrastructure & private cloud management but aggressively accelerate their ability to enable public and hybrid cloud capabilities.
Microsoft and VMware make impressive progress but also face similar challenges.
With vSphere 5.5 VMware made a number of enhancements to its “platform” capabilities (see separate blog summary) to defend its Enterprise virtualization leadership.
But let’s look at VMware’s more strategic battle grounds.
Driving the vision of the “Software Defined Datacenter“ Vmware launched its second endeavor to provide “virtual SAN” capabilities with the promising VSAN (kernel-level integrated into vSphere rather than a virtual storage appliance as with vSA). VMware is also successfully developing “network virtualization” mind-share around its VMware NSX platform (combining NICIRA and vCloud Networking and Security).
Still, the recent announcements at VMworld Barcelona actually mirror VMware’s core focus – securing the hybrid cloud management control point.
The “Cloud Management Launch” focused on enhancements to vCloud Automation Center (now integrating with VMware’s vCloud Hybrid Service and Red Hat Open Stack) and the integration with the new VMware IT Business Management Suite (providing insight into cost and utilization of shared resources).
vCOPS Suite 5.8 ties into this by providing enhanced hybrid insight, with performance monitoring for Microsoft applications and deeper visibility into applications running on Microsoft Hyper-V and Amazon Web Services.
VMware will have to clarify its product strategy around vCloud Director (vCD) and vCloud Automation Center (vCAC)
But it’s not yet all perfectly lined up, VMware will for instance have to provide more clarity around its vCloud Director (vCD) and vCloud Automation Center (vCAC) strategy.
With vCAC arguably being a “victim” of its own success, Service Providers are expressing concerns around the future of vCloud Director. VMware’s blog clarifying the general direction of: vCD = Service Provider and vCAC = Enterprise Customers, was a needed positioning but (from personal feedback) did not give many SPs the needed “warm feeling” for a secure vCD road map and clear integration plans with vCAC.
Microsoft had caught up with most “must have” virtualization features with its Windows Server / System Center 2012 release.
The R2 release essentially provides none of the usual scalability updates and focuses instead on storage and network virtualization enhancements.
The new tiering feature of Storage Spaces and the Hyper-V Network Virtualization enhancements (Site-to-Site VPN, improved interoperability with 3rd party virtualization and hybrid forwarding) are welcome additions.
While they are provided “free” (part of WS2012 R2) – not as fee-based products (like NSX, VSAN), they provide varying levels of functionality compared to VMware (e.g. Storage Spaces does not provide “shared storage” through accumulation of in-expensive local storage like VSAN).
Like VMware, Microsofts real focus however is to start translating its “Cloud OS vision” (a single, common platform for “classic datacenters”, service provider datacenters and MS’ public cloud, Azure) into tangible product functionality. Different terminology – same focus – securing the control point of the (hybrid) cloud management layer.
Prime example here is the release Windows Azure Pack, essentially a collection of Windows Azure technologies on top of the System Center and Windows Server datacenter instances - allowing Service Providers and Enterprise customers to provide a “Windows Azure-like” experience when making these datacenter resources available to their “consumers” in the form of self-service, multi-tenant clouds.
Challenge is the true unification of the various virtualization and cloud management components
Similar to VMware, the challenge for Microsoft will be the true unification of its management components that – although now under simplified single System Center Suite – consist in reality of a collection of products and interfaces with varying degrees of integration and overlap.
There is one important added dimension that both companies will have to handle with sensitivity. Given the competitive pressure in the space of providing public cloud resources (if VMware and MS don’t then “others” happily will), both are forced to aggressively expand their own public cloud offerings, indirectly competing with their own “route to market”. VMware’s recent announcements on expanding its Hybrid Cloud Service into Europe as well as Microsoft’s rapid expansion of Azure-based offerings (now offering IaaS & Big Data among many other services) will squeeze the scope for competitive, self-hosted Service Provider offerings. (for a comparison of Azure and vCHS, incl. “Enterprise” vs “cloud enabled workloads” see Marcel van den Berg’s blog)  I missed this great article from Massimo Re Ferre on “cloud spectrum” trends covering these workloads – a “must read”. [edit end]
VMware’s recent acquisition of Desktone and Microsoft’s rumored “Mohoro” project are both examples of how quickly a profitable offering space (“Desktop as a Service” in this case) could become commoditized if the big players offer large scale public services (although e.g. Brian Madden puts a different spin on the potential use of Desktone).
Service Providers won’t be able to reach the same economies of scale for “main-stream” IaaS offerings, focus needs to be on providing differentiated offerings with additional value
This is not to say that there is no scope for Service Providers – quite the opposite – but simply put, SPs won’t be able to reach the same economies of scale for “main-stream” e.g. IaaS offerings. SPs will need to focus on providing differentiated offerings with additional value (e.g. additional SaaS layers, regional / compliance / performance niches etc.) – arguably associated with higher effort and forcing them to continuously innovate to stay one step ahead of “commoditized plays”.
Additionally they will increasingly be asked to act as “broker” to e.g. to the vendor’s public cloud offerings.
Picking the vendor that minimizes the risk with this transition, eases the integration of “on-premise” and “off-premise” and helps them to enable differentiated offerings with appropriate margins are all important considerations, after all there is the reality of tying yourself further to a particular vendor after adopting their “cloud management” layer and APIs.
VMware’s Ramin Sayar was spot-on and straight forward when stating: “… IT needs to evolve from being just a builder to a broker of services. Don’t be a bottleneck … Instead, provide self-service access to critical services by strategically sourcing them either internally or from the public cloud.”
Clearly both of the two vendors will try to make sure that it is THEIR cloud management layer that will be adopted to provide the default conduit from on-premise resources based on THEIR virtual infrastructure into THEIR (public) cloud services.
You can draw your own conclusion from the above and while I’m certain that both VMware and Microsoft value (and need) their partner community they will have to provide Service Providers with a vision for a sustainable and profitable business model in this (challenging) future ecosystem.
Without it, Service Providers might be drawn to (e.g. open source, multi-vendor) cloud management alternatives like OpenStack or CloudStack, that (rightly or wrongly) promise less vendor dependency, something that both Microsoft and VMware will clearly want to avoid.