VMware Facing Increasing Competition on Several Fronts Page 2

VMware Facing Increasing Competition on Several Fronts

And VMware goes on to say that it expects increasing competition that could result in loss of customers going forward, highlighting the threat posed by Microsoft, with Hyper-V and its CloudOS private cloud platform and Azure, and from others:

Citrix Systems continues to enhance its end-user desktop and mobility offerings and their networking and cloud platform offerings. IBM, Google and Amazon have existing cloud computing offerings and announced new cloud computing initiatives. Additionally, open source technologies for virtualization, containerization, and cloud platforms such as Xen, KVM, Docker, Rocket, and OpenStack provide significant pricing competition, and enable competing vendors to leverage open source technologies like OpenStack to compete directly with our SDDC initiative.

Now here's where VMware talks about its relatively small stature compared to some of its competition:

Many of the companies driving this trend have significantly greater financial, technical and other resources than we do and may be better positioned to acquire and offer complementary products and technologies. The companies and alliances resulting from these possible combinations may create more compelling product and service offerings and be able to offer greater pricing flexibility than we can or may engage in business practices that make it more difficult for us to compete effectively, including on the basis of price, sales and marketing programs (such as providing greater incentives to our channel partners to sell a competitor's product), technology or product functionality.

Now it's important to remember that 10-Ks offer worst-case scenario warnings, so things almost certainly aren't quite as gloomy as they might sound, and the competition isn't quite so on the ball as these prognostications suggest.

But it does give a nice counterview to that offered by the more upbeat VMware marketing message. When you balance it out, you realize that although VMware is the 800-pound gorilla in the server virtualization space (for now), it may not be so easy to use that market dominance to succeed in the newer markets that VMware is entering, such as the cloud, software-defined data centers, desktop virtualization and even mobile device management.

What's clear is that the company is certainly not sitting idly by waiting to be overtaken by competitors' technologies, but success in the future is not assured despite the company's successful past.

That means VMware is entering a crucial point in its relatively short corporate history that is likely to define its chances of a future as an independent company.

Paul Rubens is a technology journalist and contributor to ServerWatch, EnterpriseNetworkingPlanet and EnterpriseMobileToday. He has also covered technology for international newspapers and magazines including The Economist and The Financial Times since 1991.

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This article was originally published on May 14, 2015
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