VMware continues to state that they are focused on three strategic legs with EUC as number three. So what can they do to achieve this? They have a meaningful presence against Citrix in the VDI market as number two, but that’s not a high growth business that I would expect them to double down on, as can be seen from their most recent earnings transcript. Sure they’ll make incremental investments like a dedicated sales force for EUC and Desktone to grow, but I doubt DaaS and VDI are going to deliver results that move the needle at the required pace anytime soon.
So this leaves the other side of the EUC business, the mobile/cloud side, which clearly is a growth opportunity. What does VMware have there? Well, Horizon App Manager, which is still young, and their mobile hypervisor offering, which is going to go nowhere since it’s limited to so few devices. These nascent offerings are further weakened due to the churn VMware has had in the mobile product team with the guy they hired from Microsoft to run the Horizon suite, Moe Khosravy, leaving after only 8 months. More recently Srinivas Krishnamurti from the mobile team left for a startup who gave an overview to this site last year on VMware’s EMM efforts, which have really gone nowhere since. Most recently their EUC CTO put out his thoughts for mobile/cloud, which are just vague generalities that are nowhere close to anything VMware offers, and certainly far from anything that is reality for customers.
Since these departures, they hired yet another GM, Sanjay Poonen, from SAP to run their business. Apart from the goodness that he actually tweets, we’ve seen nothing from him yet. I wonder how much his SAP DNA will help or hurt him. He is but one guy, and without a team who can actually execute what can he actually achieve? As far as I can tell, there is nobody internally with the ability to explain or drive the EUC strategy, which is why VMware has hired both Sumit Dhawan and Bob Schultz away from Citrix.
Sumit is known by many as the first person to organize the Citrix CTP community. He’s a marketing guy who became the VP of Mobile until Zenprise was acquired, and then became part of the XenMobile team. I’ve also heard a rumor that Shankar Iyer, Citrix’s VP of Receiver has also left after the XenMobile integration after announcing him as a key hire from Cisco two years ago. I have not heard that Shankar is going to VMware, though.
Bob was the GM for XenDesktop and XenApp after coming from HP as a GM type. He took over from the previous GM who got fired and is now CEO at NComputing. I’ve heard Schulz was not given the job to replace the outgoing SVP/GM Gordon Payne who for months has been rumored to be leaving Citrix. Instead, Citrix hired a new guy from Polycom, Sudhakar Ramakrishna. So it appears that Citrix has had their fair share of executive roulette of late as well.
Now that we know Sumit and Bob are going to VMware, I still have questions about the technical vision and leadership to make products and solutions happen in the real world. No disrespect to them, but they aren’t technical guys. It seems like VMware hired the Citrix B team to lead whatever they may have planned. It simply amazes me why vendors continue to throw executives who are not technical product people, coming from a competitor with a track record of building average customer solutions, and expect them to solve real world customer problems. Now I could be wrong, and Poonen could have a grand plan to balance the team with technical talent, but experience tells me that most MBA GM types have no freaking clue when it comes to EUC related tech and what matters.
So, I think VMware will have no choice but to buy into the game, and integrate products that these former Citrix execs will push along to squeeze out growth as opposed to what customers really want. It’s the classic playbook, as opposed to being a true product company with technical leadership, which I think is lacking big time in the EUC industry.
So how long will it be before VMware announces a mobile acquisition? They really have no choice, in my opinion.
When I think about this, the obvious choice is to buy a leader in the MDM space, as that seems to be a basic requirement that all expect no matter how much it sucks. It would be obvious to buy either Airwatch or Mobile Iron in this space to inject VMware into many accounts and create many good partner opportunities. That would hurt Citrix, who is begging partners to sell XenMobile (which is not a great product, anyway).
Of the two, I think Mobile Iron is the most likely fit due to location. I’ve been trying to really understand the difference between Airwatch and Mobile Iron the last few months and nobody has given me a good technical answer. What I have discovered is that in general it comes down to this: Airwatch, based in Atlanta, is big, so I have reasonable confidence in their support, great at quickly supporting many devices, very bullish CEO who has enough money to not give a crap about selling early. Mobile Iron, on the other hand, is more of a classic VC backed company. They have a reasonable product, although it’s worrying that Noah Wasmer, their VP of products, has left them for Apple. Their support is average, but always willing to help. There’s not much difference between them in terms of product, so I think VMware would most likely choose location as the deciding factor, and that would be Mobile Iron since they are based in Mountain View, CA.
Good may be another unexpected but shrewd move, although I still hate their client (relatively speaking... it's not as good as the native clients). This would instantly put VMware in the position as the trusted email provider to the enterprise, with a platform to get into apps etc. securely.
I also think VMware could pick up one of the many small MDM vendors just to tick a box on the feature comparisons to keep up with the likes of IBM and Symantec. Then, they could buy other mobile capabilities quickly which, in theory, may be easier to integrate. Although if they did that, they wouldn’t get the customer impact they are looking for.
Another approach may be for Poonen to partner with his old buddies at SAP and strategically use SAP as VMware’s MDM solution, but acquire value that adds on top of it when needed. Perhaps if the EUC thing doesn’t work out, it’ll be a way for VMware to spin out things. If you listen to @virtualtal, he’ll tell you that he thinks VMware will be out of the EUC business in 18 months. I personally don’t think they will do that, given the amount of public commitment they have made. However they can’t sit there and grow EUC at single digit pace either.
VDI and DaaS are not going to drive growth at the rate they expect. VMware has a ton of cash on hand, and if they are really are going to back up their commitment to EUC as a strategic leg, given their lack of technical leadership, they have no choice but to buy quickly and move aggressively into mobile.