Dell's VMware-as-cell sell isn't going swell VMware yesterday posted a pretty set of numbers. And today its share price fell by twenty per cent, from Tuesday's US$68.97 to a Wednesday close of $55.38 after grazing $52.91. The reason for the dip is widely held to be remarks during its earnings call about the secular move to cloud representing a wave that even VMware will …
I'm surprised their shares have held on as long as they have. Cloud will kill VMware dead, and I don't think it will take all that long. They have a mediocre cloud at best which is lacking crucial enterprise features such as disaster recovery as well as the features we'd expect in a cloud platform like PaaS. Add to this the enormous headstart and mindshare AWS has, the vendor lock in Microsoft has and it's hard to imagine many people deciding to stick with VMware. This is especially true now they have pretty much killed Linux integration in vSphere by using PowerShell and Flash as the two primary management methods. Who does that leave wanting to move to the VMware cloud? Best case, they will probably survive after losing 90% of their revenue. Even the desktop side isn't safe with Citrix in the driving seat and the industry finally realising that native web apps running from the cloud is a better way to go. VDIs days are numbered once all the apps are rewritten, and let's face it if your software vendor isn't starting to make those sorts of noises they are probably not going to be around long either once some startup offers a subscription alternative.
One is the crazy cash Microsoft has, they have almost 0 customers in the cloud game but they are dumping piles of money into data centers and hardware with the hopes of "Build it and they will come" to pay for our cloud services.
The other threat is Standard Linux Containers so that we can move a container from cloud vendor or on site with almost 0 down time, little config differences, no vendor lock in and no data loss. This would also kill the Microsoft dream of all apps running on a windows server license on premise or in the cloud.
We are seeing on the consumer side with the iPad and Android tablets taking huge bites out of the typical PC market. So Dell has to deal with that too. Application developers have a BILLION active Android users to sell software to and if they do a container in the cloud they can make it work via the web for iPad and Windows users, thus NO silly MS Visual Studio vendor lock in to the windows monoculture.
The SAN and storage product overlap means there will be a LOT of products tossed in the trash or just spun off. That said I could see Cisco buying EMC, and that would make business sense, not sure if that is financially a sound idea in that converged SAN and compute via VMware are making the traditional SAN look pricy and overly complex with less flexibility.
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