Interview “From the EMC board room,” says VMware CEO Pat Gelsinger, “you can see the carnage of the minicomputer industry.”
“Wang, Digital, Data General. You can see their buildings from EMC's headquarters.”
That view, Gelsinger told The Register, means “we know how this whole story played out.” And because he and the EMC board have lived through big changes in the IT industry, he's willing to say that cloud will leave even more casualties in its wake than the transition from minicomputer to the PC era.
“This is the grandaddy of them all,” he says of cloud, adding that the EMC Federation thinks it needs to be a grandaddy to survive.
“The issue at the highest level is that EMC as an entity has outperformed the industry on growth rates and such but has underperformed on stock price. The question for the board is what do you do to get better share price performance.
“Activist investors are pretty simple folk. Their objective is as quickly as possible drive change that increases shareholder value.”
The EMC Federation, Gelsinger feels, has “laid out a strategy for this period of tumult.”
“Being bigger and more strategic is the right strategy," he adds. "That is the perspective we have taken through the changes. And we think that in the longer term we will be rewarded for that.”
Gelsinger says VMware's contribution to the cunning plan is its “second act”. That act, it seems from the vantage point of The Reg's virtualisation desk, is to have a bet on just about every technology or trend being suggested as important in what's being called the “cloud/mobile era”.
The company therefore offers private, public and hybrid clouds, ways to run containers in old-school or newly minimalised virtual machines, virtual storage and, with VVOLs, a way to improve physical storage. VMware will let you roll-your-own infrastructure, hyperconverge it or run on converged stacks. It's a player in network virtualisation and network function virtualisation and tools to deploy desktops and apps to just about anything with more brains than a graphing calculator.
But the vendor's not executing brilliantly in all categories, a fact Gelsinger acknowledged in an interview with El Reg at VMworld 2015. Some VSAN ready nodes weren't up to the job at launch time, he admits. EVO:RAIL wasn't packaged in a way that partners could sell or customers wanted to buy.
Even the NSX network virtualisation play didn't take at first: Gelsinger said he tried to sell it as a subscription service but customers pushed back.
Some business unit managers, he says, have had “trips to the principal's office” as a result. Even those who are doing well are being pressed to do better again.
So good at server virtualisation, it hurts
And there are some very bright spots in VMware's range. AirWatch “exceeded internal forecasts” and Gelsinger said vSphere 6.0 was the company's “strongest release ever, with the best uptake.”
“The problem we face is that vSphere is such a stunningly good product. For a very large number of customers it works!”
vSphere's so fondly-regarded by many because it solved a pressing problem, namely the unruliness of mid-2000s Windows-centric data centres. Gelsinger thinks VMware's next challenge is to convince customers that it's now worth taking the next step into automation.
For plenty of vSphere users – the kind of folks reading The Reg - that's a scary proposition. Server virtualisation made sysadmins' lives easier. Automation threatens to make their lives complicated by making it apparent people aren't required to drive modern IT.
Gelsinger thinks this is inevitable and says VMware's channel is moving fast from being a provider of outsourced services to being purveyors of business improvement through automation and the apps that thrive in an automated environment. Partner head counts are down as a result, he says, but the value they add is up.
But partners and VMware alike are learning on the fly how to live on the differently-shaped revenue streams that cloud creates. Gelsinger said he's pleased that VMware now derives seven per cent of its revenue from the cloud and software-as-a-service and the fact that percentage has doubled in a year. On the other hand, it's only seven per cent.
Gelsinger's not happy about that number, nor is he worried because he thinks there's “secular progress that is yet to be finished.”
VMware's response is to shake up the way it works. Gelsinger said that a year ago VMware didn't have anyone working on its Project Photon microvisor containerisation project, but can now get such projects to market at speed and is willing to make bets on new ideas.
“Taking risks equals the lowest risk”, Gelsinger told the VMworld crowd in his day two keynote and re-iterated to The Reg.
Those who've bet their businesses and careers on VMware have to hope the company is taking the right risks, in contrast to those who provide the EMC board with such a nasty view of the past. ®