Will VMware become the next Novell?
Well, its surfaced again. The old chestnut of will VMware become the next <insert-former-vendor-who-dominated-the-market-but-then-rapidly-declined> has surfaced again. This time its Gartner who are up to their old predictive tricks. This time is David Cappuccio on the Gartner Corporate Blog:
Similiar Reuters is reporting that the stock market is now bearish about VMW shares, and the company could see its share value fall:
http://www.reuters.com/article/ousiv/idUSTRE5656KD20090706
The answer to this question is yes, if you believe what Karl Marx said that “History repeats itself – the first time as tragedy, the second time as farce”. Personally, I’m not a believer in historical inevitabilty or determinism. That just because something happened in the past is is destined to happen in the future. It’s what convinces me that I’m not Marxist.
So what does VMware have to do to aviod becoming the next Novell/NetScape/Lotus? A couple of very simple things, which boil down to the general good things that all businesses should do and they are:
- Don’t annoy or antagonise your existing customers. People are generally quite loyal to companies once they have got them in-house. They generally recognise the benefits of sticking with what they have got if they cannot see a compelling reason to move to another vendor
- Offer easy and cost affective upgrades. Getting customers on the latest release is paramount to keeping the impression in place of the software is getting better, and old gripes are being taken care off. Recognise that markets & demands do change, and react to them. Aviod repeating old mantras that will increasingly fall on deaf ears the more they are repeated
- Produce stable products that work. Customers react negatively to even the slightest degregation in quality especially if a previous release set the bar at a high-level.
- Innovate. Add to and extend existing functionality and introduce brand new bleeding edge features that no-one else have. Customers put a great deal of store against “Unique Selling Poiints” often at the mistake of valuing them above core functionality.
- Make it easy for new customers to climb on board. Attracting new customers as well retaining the ones you’ve got is cental plank of any business. But in order to attract new business you must offer models which allow customers to get into the product easily, and also upgrade to high level editions with ease.
- In a recession. You have do these things twice as well as you used to…
Now in the main I believe that VMware achieves these rules. BUT (and there is always a but…) I increasingly hear gripes from customers about the upgrade from Vi3 to vSphere4 being too pricey. However, it does seem that things are up for negioatation. Without mentioning any names – I have friend who has been sending me emails describing his upgrade costs. Much of this centres around what I would regard is complicated calculations for working out the value of existing Vi3 SnS, and then working out how much that is worth in vSphere4 SnS. The first calculations resulted in what my friend thought were punitive upgrade charges. So expensive in fact as to make him reconsider his upgrade plans. The second calculations for the upgrade he recieved (that’s the “Let me speak to my manager…” part of the story) came back with a signicantly reduced number….
I subscribe to the “there’s no such thing as free lunch” and “You get what you pay for” perspective. But even I recognise that in the current market place as Reuter’s article indicated – that in a recession price becomes a sensitive issue…
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July 8th, 2009 at 12:37 pm
I can’t believe the steps they’re taking with ESXi. That, to me, is indicative of a company backpeddeling because they didn’t take the long view. I can picture the meeting now.
“You decided to give WHAT away?”
I’m at the cusp of designing the next iteration of our infrastructure, and I’ve got to make a choice about which hypervisor I’m going to go with. I wanted to use ESXi because I was already familiar with the their interface (at least a bit), but with the direction they’re going, Xenworks puts out a mighty fine offer. Essentially, VMware has no carrot on the stick at this point.
July 10th, 2009 at 7:07 pm
Well with ESXi and the stuff that went around the whole free download go me very curious so I called a friend [who also is an entrepreneur and could have been directly affected by the ESXi stuff as his business was to make money out of the ESXi freeness, so to speak] and asked him why did VMware do that and what did they not look at when they did that.
I was amazed and actually not surprised with the administrative sluggishness on VMware’s part that they never kept a track on folks that got/downloaded ESXi. So the accounts were not kept, naturally you wouldn’t keep as they weren’t “paying” customers. Now with solutions rising across the virtualization spectrum providing all sorts of support made it hard for them to understand why and how ESXi suddenly became a lead for paying customers.
Sad part is that many customers will quietly move away to Hyper-V or other solutions like XenServer , few will stay back till the upgrade moment comes and will probably not even contact VMware (VMware may have to ask the partner to supply the names of the customers who they just snubbed/rubbed the wrond way).
So before folks get a bit too excited here, I am saying (which I have said publicly) is:
- VMware must keeping innovating, get friendly to customers and all the stuff the Mike said above
- VMware can get its in-house administrative tasks that involve stuff like talking to customers, VARs etc
- Really get some really good help at the backend and ensure that you know what goes in and what goes out [get soft folks on board while keeping engineers not at all involved with that kind of BS]
Times are hard and they are not about to get any better but with some simple and prudent practices VMware can extend its winning streak by a few years. VMware has always been very dear to me, simply because it gave me and to many of us in the IT industry the hope and joy of “coolness”, it would be a shame to see them go down.
Tarry