VMware may be king of the virtualization mountain now. But it should beware of bridge-building competitors.
Chris Wolf, an analyst with the Burton Group, warned that Novell Inc. was similarly at the top of the world in the late 1980s with its NetWare network operating system, which filled a key gap in Microsoft products. Addressing the problem, Microsoft responded with Windows NT, a weaker alternative to NetWare but “good enough” and stronger over time, and featuring a Gateway Services tool with just enough interoperability to make it easy to port data between the two systems.
But that “gateway” eventually became a floodgate, siphoning off Novell NetWare customers, who now had an easy way to migrate to Microsoft NT and a motive for doing so: Microsoft had a much larger package of software solutions while Novell’s NetWare was just a single point solution. Farewell, Novell NetWare.
Fast forward to 2008. VMware is the undisputed leader in virtualization, the hottest thing in the software market. And as part of its interoperability measures, Microsoft’s new System Center Virtual Machine Manager will have extenders to VMware. Microsoft will also launch its far more modest Hyper-V virtualization software at the giveaway price of $28 per server this summer. But, clearly, Microsoft will be working at furious speed to make it more competitive.
VMware, like Novell NetWare, is a point solution, and Microsoft, even more than in the 1980s, is a giant ecosystem with an overwhelming share of the global software market.
“This is a great strategy for Microsoft,” Wolf said. “It’s providing just enough interoperability [with VMware] to give some management with the goal of facilitating migration. And when users get comfortable with those tools, they will slowly migrate over to Microsoft.
“It’s exactly the same runbook as Microsoft ran against Novell,” Wolf said. “It’s pretty eerie.”