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VMware's Accidental Containerization Hero

By Paul Rubens (Send Email)
Posted June 11, 2018

There must have been some dark mutterings to be heard in the corridors of power at VMware over the last year or so, thanks to the seemingly inexorable rise in popularity of containers. These little critters provide a tasty light alternative to the full-blown server virtualization that VMware offers to its customers, so the conversations at the company must have gone along the lines of, how much trouble are we in?

The answer is "not as much we might have been in," and that's thanks to an unintended consequence of VMware's decision to purchase a company called Nicira way back in 2012 when few people had ever thought of containers, and Docker had yet to be released. Virtually Speaking

Nicira, you may recall, was causing a stir with its clever network virtualization software, which created an abstraction layer between servers and the existing physical network. This transformed the physical network infrastructure into a pool of network capacity that could be used to create isolated virtual networks to connect workloads in a data center automatically, in a matter of seconds.

After acquiring Nicira and adding some secret sauce of its own, VMware rebranded the whole shebang as NSX, and started talking about the virtualized data center." This included virtualized servers connected on virtualized networks to virtualized storage, and so on. You get the picture.

Anyway, back to containers. VMWare has been running scared of them for some time now, and has fought the threat they pose by promoting the use of containers running in their own virtual machines, and by ensuring that customers' existing VMware virtualization management software could also be used to manage containers, so the two could co-exist quite nicely.

Creating Microservices in Distributed Data Center Architectures with NSX

But recently it has also been encouraging its customers to use NSX network virtualization software with containers, so that they can be linked to create microservices in distributed data center architectures.

That's not exactly what VMware had in mind when it purchased Nicira for a little more than $1 billion, but it seems that momentum for that type of usage among customers is building using the Pivotal Container Service (PKS). (That's a Kubernetes-based container service designed and offered by VMware's sister company Pivotal.)

NSX now has an annual run rate of $1.6 billion, according to the company, and much of that has little to do with the original virtualized data center concept. So it seems like VMware has figured out how to make money out of containers through NSX, and it is all pretty much by accident.

Sometimes fortunes are made accidentally, and VMware wouldn't be the first company to pull this off, but to be fair the company announced some good results for the fourth quarter of 2017. Overall revenue was up 14% from the previous year, and license revenue was up 20%. Particular highlights were the company's end user computing (EUC) business, which was up 30% in the quarter, and VSAN, the software-defined storage and hyperconvergence product, which was up a staggering 130%.

So overall the company's growth areas are VSAN, EUC, and, thanks in no small part to the popularity of containers, the accidental hero NSX.

And as for bog-standard server virtualization? It's not really something that VMware seems to want to talk about much anymore.


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.

Follow ServerWatch on Twitter and on Facebook

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