VMware - A SWOT Analysis

Strengths

One of the major strengths of VMware is its adaptability on a variety of platforms from the large, such as IBM’s x445, to the small, such as HP blade servers. They also sell an add-on called Virtual SMP that allows its customers operate virtual dual-processor servers. This allows their software to be purchased by a wider swath of customers, from large corporations to the small firms with a one person IT staff.

Another strength of VMware is the ability to perform “live migrations” for its users. The live migration is the ability to move running virtual machines between physical servers. This migration ability, which VMware calls VMotion, is far and away more advanced than its competitors, such as Microsoft.

One more strength is VMware’s lead in the industry. VMware’s virtualization software is ahead of its strongest competitor, Microsoft, by 18 months to three years. This lead allows it to set the industry standards, with competitors following its lead and looking like copiers instead of innovators.

VMware also allows a company to enter the virtualization world gradually. It allows its customers to implement it in increments and not all at once. That way the IT staff can become accustomed to it at its own pace.

Weaknesses

While its strengths are good, VMware does have its weaknesses. One of these weaknesses is cost. The amount of memory needed to run VMware is large. In order to run more than one virtual machine, the minimum amount of memory is 1GB, more is recommended. This can add to the costs a company must pay. Along with being a memory hog, the customers must also run a very powerful CPU when running machines concurrently. Another cost factor is VMware charges a per workstation license fee. For a large company, this can quickly add up.

While Microsoft is way behind VMware in virtualization software, the mere presence of Microsoft in the field is a weakness. VMware may have the better software but there are numerous companies that run in a pure Microsoft environment. According to an article entitled “Buying off the plans, CHH opts for Microsoft roadmap”, Carter Holt Harvey (CHH) is going with Microsoft’s virtualization software.

After a SWOT analysis (strengths, weaknesses, opportunities and threats) VMware and Microsoft came in very close, says Modkov. In the end, the company decided to go for Microsoft’s virtualization product, even though it was a relatively new technology, “miles behind VMware”, he says.

“We knew that we were basically the only early adopter,” he says.

But the company, a Microsoft shop, found the technology fit-for-purpose for its current IT environment. In addition, because the IT team was already familiar with Microsoft, it was easy for staff to learn and adopt the Microsoft virtualization platform, he says.

Taking Microsoft’s virtualization strategy and technology roadmap into consideration, Modkov felt that the long-term benefits far outweighed any current issues. “We looked at Microsoft’s roadmap, and we believed them,” he says.

This soft of loyalty to a company’s brand is hard to overcome, even for an industry leader like VMware.

Opportunities

With virtualization moving from leading edge to mainstream, more opportunities are becoming available for VMWare. VMWare’s purchase of Dune Technologies in September of 2007 positions it to enlarge their remote desktop management areas of products. “The application from Dunes is a natural fit for the most recent version of Virtual Desktop Manager”. With the growing numbers of intercontinental companies, the market for remote and virtual desktop management systems is sure to be a growing market.

The virtual application arena is another promising expansion area for VMWare. As virtual machine environments continue to grow, more business will realize the flexibility and low overhead of virtual applications. “Virtual appliances are pre-built, pre-configured, ready-to-run enterprise applications packaged with an operating system inside a virtual machine”. From the definition, it is easy to imagine the advantages virtual appliances will have for smaller businesses. Businesses of all size will be able to run enterprise applications without the high overhead of traditional hardware. Virtual appliances also give independent software vendors (ISVs) opportunities to reach a greater customer base. Since the virtual appliances include the operating system they run on, ISVs can save development time and resources by deploying virtual appliances that run on a single operating system thus avoiding compatibility issues. Additionally, customers can download and install the virtual appliance on their hardware of choice regardless of cost. This creates a larger market for enterprise applications that would otherwise be out of price range for smaller businesses.

Threats

One of the largest threats to the VMWare virtualization software is security breaches. "There hasn’t been a significant security breach in virtualization, not a public one," says IDC analyst Stephen Elliott. "At some point, you have to figure it's a matter of time". According to Laurianne McLaughlin’s article, hypervisor malware and hypervisor weaknesses may make it possible for a hacker to breach VMWare’s guest operating system and access the host operating system of the server.

In addition, virtualization technology has made it more difficult for the IT team to see the traffic running between VMs. The security tools have not kept up with virtualization technology meaning that network and security departments have lost visibility to network traffic.

Although a public security breach has not yet occurred, it is important that VMWare and other competitors continue to develop the security tools to protect the virtual environments. Security issues that place corporate data at risk will diminish the sale of virtualization software at fast rate.

From a business perspective, the largest threat to VMWare’s continued growth is the number of companies that are going to enter the virtualization arena in the near future with differentiating technology. “Among them are start-up Virtual Iron a Lowell, Mass.-based company whose software is designed not only to run multiple operating systems on one machine but also to let a single operating system span several machines”. VMWare is clearly the leader in the virtualization space but to grow its market share and continue to justify its price tag, VMWare must continue to offer the latest and greatest in virtualization technology.

Sources:

VMware calls for IT organisational overhaul –

http://www.vnunet.com/vnunet/news/2198798/vmware-chief-virtualization

Logicalis - Virtualization on the Inside - http://www.us.logicalis.com/custexp_logicalis_vmware.htm

Microsoft's feature cuts imply virtualization weakness - http://www.cbronline.com/article_feature.asp?guid=1AAD53D7-B1ED-4FC2-8AB7-A99830E8DE91

What can you do with VMware Workstation 5 - http://blogs.techrepublic.com.com/window-on-windows/?p=436

Buying off the plans, CHH opts for Microsoft’s roadmap - http://computerworld.co.nz/news.nsf/spec/8AD5AC5AA657965CCC25734700798D82

Hickins, Michael. "VMware Buy Expands Virtualization Opportunities."

http://www.eweek.com/article2/0,1759,2181898,00.asp

"Learn About Virtual Appliances." VMWare
http://www.vmware.com/appliances/learn/

"Future Threats to Virtualization Security: Fact vs. Fiction http://www.cio.com/article/155050/

"Virtualization companies vie for advantage

http://www.news.com/Virtualization-companies-vie-for-advantage/2100-7344_36035212.html