Start with a plot of land, plow it up, drop some seeds, water, care, and in no time flat, you have a viable farm. Alright… any farmer out there knows there is much more to it than that. Early mornings, mechanical break downs, pests, critters, varmints, etc… But, when everything is said and done correctly, that plot of land turns into something special.
The more and more I think about it, VMware is a farmer. No doubt they have created something very special. The ecosystem surrounding their foundation product, the hypervisor, is rich, fertile, and ready for harvesting.
Land = Hypervisor
There is no question that VMware has provided the most market-dominant virtualization layer out there. Continued development has yielded a smaller, more efficient, and more feature rich solution that we all see benefits from. Collaboration between VMware and core hardware vendors (network, storage, processing, and memory) have resulted in a product that provides functionality we all take for granted and rely upon heavily.
Seeds = APIs
Starting with v3.5, VMware really started a push for integrations with 3rd party vendors. This effort shot through the roof with the vSphere platform (v4.0). The theory being that if VMware opens up various APIs to the community, the community will come up with some wicked cool add-ons that provide functionality above and beyond what VMware could provide. So, rather than keep a closed and controlled environment, VMware enhanced their market presence by allowing other people to play with their toys.
This effort has turned small companies into virtualization powerhouses and larger companies areas to expand their expertise and existing technologies. Think about it:
- Vizioncore (now a part of Quest Software)
- Hyper9 (now a part of Solarwinds)
And the list goes on and on. The API availability has fostered so much new business opportunities for the companies on the list above and the countless others that are not listed.
Water/Care = Vibrant Community
VMware has fostered an incredibly active community surrounding their company.
- Active local VMware User Groups
- Social Media — The one and only, Mr. John Troyer (@jtroyer for you Twitter folk out there) is the ring leader behind this. He has become the face of VMware for so many of us out there. Just listen to the VMware Communities Roundtable podcast, sit at the social media area at VMworld, or follow his Twitter account and you will see what I mean.
- vExperts — Those individuals that go above and beyond to promote the VMware technnologies and brand.
- VMworld conferences
Ultimately, there is a great customer/vendor community that loves VMware and what they do.
How is VMware taking advantage of their farm
The obvious answer is that they are taking all of this to the bank. Sure enough, they are.
Their stock is doing well. Q1 results show great growth, especially when compared to Q1 of 2010:
- Revenues: $844 Million [+33% from Q1 2010]
- Net Income: $126 Million [ $78 million in Q1 2010]
- License Revenues: $245 million [+$34% from Q1 2010]
- Professional Services: $425 million [+32% from Q1 2010]
- [Source: http://virtualization.com/2011/05/06/vmware-reports-q1-2011-earnings-revenue-up-33-to-844-million-yoy/]
- But, aside from the financials, VMware is able to harvest some amazing technologies and people from the farm. Remember the list of companies waaaayyyy up at the top of the blog post? VMware has identified some level of value and innovation in some of the companies and decided to purchase them and bring the technologies in-house. Of the entries in the list, the following were acquired by VMware and integrated into their product offering in one way or another:
- Thinstall — Now known as ThinApp
- Integrien — vCenter Operations Standard/Advanced/Enterprise
- Shavlik — VMware Go!
By bringing these companies in house, VMware is able to expand their offering AND force the other companies to innovate more. Acquisitions are a way to level-set the 3rd party community and provide a new avenue for growth.
Take a hypervisor, sprinkle some APIs, apply and maintain a vibrant community, and you get what VMware is today…
- virtualization.info — A look at VMware’s past acquisitions — Feb 1, 2010
- virtualization.com — VMware Reports Q1 2011 Earnings: Revenue Up 33% To $844 Million Yoy
- Google Finance — Google Finance — VMware Stock — 5yr Range