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Talk (About VMware) Isn't Cheap

Why do Microsoft executives talk endlessly about VMware? Sure, VMware currently is the leader and a pioneer in x86 virtualization technologies. Like any upstart, VMware got a jump on the market. So why harp on the matter? Isn't Microsoft the perpetual Avis of the software market ("We try harder")? Doesn't it always come from behind to attain near-monopoly control of the market that it challenges?

Maybe the softies are unnerved by VMware CEO -- and ex-Microsoftie -- Paul Maritz. His bio reads like a Microsoft nightmare tale of an insider defecting to the competition. Wikipedia even tells us that Maritz was "often said to be the third-ranking executive, behind Bill Gates and Steve Ballmer" when he worked at Microsoft.

The business of selling software can be a brutal affair. Market reach can be a final blow to smaller fish in the sea, no matter how nimble they are. Think Windows, which was declared by U.S. courts to be a monopoly. Windows was leveraged to bundle IE and kill Netscape Navigator. On the virtualization front, Microsoft is saying that it can undercut VMware's pricing. Microsoft's Hyper-V hypervisor is offered at "one-sixth" VMware's price, we're told. Moreover, Microsoft distributes Hyper-V with Windows Server 2008. It sounds like bundling, but maybe it's not. Will VMware get its virtualization market chipped away as Windows Server 2008 gets rolled out more broadly, or will things be different this time?

Brad Anderson, corporate VP for Microsoft's Management and Services Division, couldn't stop talking about a deal VMware recently proposed with SpringSource that will cost VMware about "$362 million in cash and equity." The proposed acquisition will bring maybe 2 million developers into the VMware orbit as part of its cloud computing push.

Developers? Cloud computing? Where have we heard those terms before? Isn't this a page from Microsoft's playbook taken up by a former Microsoft insider? Who'll win this virtualization slugfest? Tell Doug at [email protected].

Posted by Kurt Mackie on August 14, 2009


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