VMware Wastes Strength in Virtualization ROI War with Microsoft

I agree with Kevin pretty much through this entire article and it rolls right into what I posted a while back about "who will be the "Value Innovator" this industry needs". Greg Krauska posted a reply to that post that I think really drives the point home.

I agree with Kevin pretty much through this entire article and it rolls right into what I posted a while back about "who will be the "Value Innovator" this industry needs".  Greg Krauska posted a reply to that post that I think really drives the point home.  He states:

Michael, the situation you describe in this segment, and referenced by Terry Singh, are classic signs of an ultra-competitve red ocean market.  Existing players are competing feature for feature to win an identified group of prospects.  In an effort to compete, the suppliers are simply bundling more and more product and making it more complex for customers.

Like many companies in the software space, it is really hard to play any other way because competing hard and fast is what got you the success you have had - so far.  Marketing invests in predictable ways to get "their side of the story" into the mix.

The eventual value innovator in this space - whether VMWare, Citrix, Microsoft or a new entrant, has a huge opportunity to reshape the assumptions around form, function, customer experience and more.  Who are the non-customers that are not even being considered by any of the existing players?  Who among the buyers, users and influencers are being ignored?  What do customers love and hate about doing business with this industry that the industry takes for granted? 

The answer may not be more value for a lower price.  The question is what would a new business model look like that would create a leap in value for customers while creating more profit for the suppliers?

Greg Krauska

As it pertains to the ROI calculator, and to Microsoft's defense, their calculator was a beta release, but still gave some good feedback and more importantly allowed the person doing the analysis the opportunity to dig into areas of their own or their client's environment.  VMware of course, had to respond in typical VMware fashion by releasiing their take on what Microsoft had released.  They did make some good points, but was once again, a "my tool is better than your tool response"

Here is a portion of Kevin's post:


I realize that it's a tradition in the computer industry, but I find it a little disappointing to see virtualization giant VMware following the same competitive marketing obsession that made industry powerhouses of Banyan Systems, WordPerfect, Digital Equipment and Novell.

Each of those companies, at one time, were considered absolutely dominant in their own markets and gradually lost those positions partially by focusing on the elegant engineering of their original product set and failing to recognize the point at which customers began to take that function for granted.

Once that happens—usually after Microsoft and a whole bunch of other companies offer a good-enough version of the same product—you have to offer customers more than just elegantly engineered basic functions and focus on what more you can do for them.

As a reporter covering the network operating system market in the mid-90s I spent a lot of time talking to Novell engineers about how much faster NetWare was than NT Server at file and print—the product and functions that built the company.

Customers already took file and print for granted, though; they wanted a server that did more than just file and print. They wanted one that could run applications and connect them to the Internet and reduce the number of operating systems they had to deal with every day, even if it didn't do some things as quickly as NetWare.

But rather than demonstrate what else a customer could do with network management, groupware and other products that were bundled with the operating system, as Microsoft did, Novell focused on telling everyone how much better NetWare was than NT. Bad move.

VMware's showing signs of making the same mistake.


Read the rest of Kevin's post here

Join the conversation


Send me notifications when other members comment.

Please create a username to comment.

I agree with Kevin. For VMWare the virtualization war has begun, but in the real world it has already ended?Citrix is improving XenServer quickly, building in new features for a lower price.

thanks for the response.  I think a real important point here based upon a "blue ocean strategy" is that whomever (Citrix, VMware, Microsoft, etc) needs to make sure the customer is getting the value.  Lower price is great and you find me complaining about that, but there has to be value in it as well.




I have to agree.. if it is not a lost cause i think it is close to it. VMware was first and they have done great and will do great for a long time still, but i have to admit my money is on Microsoft, Citrix and whoever is the next giant emerging.. VMware seems determined to fight the feature to feature battle, and the focus of the customers seems to be shifting as Kevin and Greg pointed out.

Very few have been able to bring a technology to market, estabilish a trend and stay ahead for very long. And battling with some of the worlds best marketing machines along with an above average product which have been born without any challenges at birth, is an almost impossible battle. What allowed Citrix to do this, could it be their allegiance to the most obvious competitor? - I sell your product, you make your product have a bit fewer features?  ..... And even more funny are we back now with MS and Citrix being buddy-buddy on the XenServer/Hyper-V story? can they actually pull it off again? :)



I find the willy-waving competition that VMware play to be more than a little bit childish - the 'My tool is better than yours' gets tiresome, especially when the propaganda contains inaccuracies (see the XenDesktop release email to partners), for example.

However, unlike Novell's ignorance of the importance of features and customer offerings which helped to begin the downfall of their primary product just over ten years ago, VMware are really striving to introduce software and features which are genuinely beneficial to IT infrastructure; SRM, for example, is a superb idea.

Obviously Hyper-V is going to become very popular very quickly - not necessarily for the best reasons, but nevertheless.

No doubt even the main features that are currently missing (such as genuine live migration of guest machines) will be available very soon from third-party value-add vendors...

It's a fascinating time to be involved in this geeky business.



In your opinion, how should VMware respond to the loads of propeganda being pushed by the Microsoft Marketing department?  There exists various methods of retort, including a response of doing nothing at all.  Wouldn't that be highly irresponsible for a younger/smaller company?  I feel VMware's offerings speak for themselves and you could make an argument that VMware could let their products put their money where their mouth is but there's power in marketing and word of mouth that should not be ignored.


VMWare has to be careful. Many shops like my own are small enough that VMWare will never be embedded completely. It would only take MS/Citrix/Virtual Iron some time to offer the same quality and maturity of products at a reduced total cost (license + support + etc) for shops like mine to change hypervisor vendors and leave our Virtual Centes behind.

VMware needs to focus on enriching their own products and ignoring the "me too crowd" of MS/Citrix et. al. VMWare was the first one in and should reap the rewards, but the paradigm is already shifting. History shows us what happens when people spend too much time trying to compete with MS rather than just focus on their own product and customer needs.


VMware should start enriching their products and get the price down to a little affordable rate. Here is another article i found which gives some interesting insight about this virtualization war. v12ntoday.com/.../vmware-vs-the-world-the-virtualization-wars-part-1.html