Is the Time for VMware in the SMB Over?
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@thecreativeone91 said:
About 8,000 employees in total (and this subsidiary, parent company has a lot more) so Id still call it a SMB.
SMB typically is considered to cap around 500 employees. SME at around 2,000. 8,000 is normally considered a "large" business but not quite enterprise which, I believe, is normally starting around 10,000.
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As a subsidiary of that size, it sounds like a "large" subsidiary of an enterprise.
I've worked for 350 person divisions of a Fortune 10. But at the end of the day, we were still an enterprise.
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The real question here is will VMware realize this, and give away more for free, or will they stick to their guns and try to convince people there product is better?
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@Aaron-Studer said:
The real question here is will VMware realize this, and give away more for free, or will they stick to their guns and try to convince people there product is better?
I doubt they have to change much of anything at this point, in the future they will try to rebuild their licensing to reflect this new competition. There are so many VMWare users out there that wouldn't switch to anything else. I've talked to several of them who said I was stupid for deploying Hyper-V when ESXi is so inexpensive.
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@Aaron-Studer said:
The real question here is will VMware realize this, and give away more for free, or will they stick to their guns and try to convince people there product is better?
It's a good question but VMware is caught in a difficult position - VMware sells a product that is otherwise free in the rest of the industry. This means that they cannot give it away or their entire revenue base is literally gone overnight and they have no way to make money. Microsoft, Xen and KVM all have good reasons to be free and have no need to make money from virtualization. VMware is the opposite.
This is the same problem that caught Windows in the face of Linux. Linux, being free and open source, was able to take over the server market in just ten years and while Windows still plays a very large role, the dominance of a paid option evaporated very, very quickly and holding onto the piece of the pie that they have is based primarily on having a ton of very unique options built into the product and relying on the perception that their competition is complex. VMware lacks both of those things.
VMware's only real hope, that I can see, is to figure out how to make their product so much better that they are worth the money. Otherwise, they are pretty much stuck. They can't be free and they can't really be easier to use than their competition.
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@coliver said:
I doubt they have to change much of anything at this point, in the future they will try to rebuild their licensing to reflect this new competition. There are so many VMWare users out there that wouldn't switch to anything else. I've talked to several of them who said I was stupid for deploying Hyper-V when ESXi is so inexpensive.
Much like the Windows versus Linux crowd. Linux can provide nearly any service that Windows can, but the Windows deployment density is heavily (but not entirely) based on having a huge user base that refuses to learn something new or is afraid of change or needs to play politics rather than being financially advantageous to the company.
Windows, like vSphere, is an excellent product. But the cost for it and the other caveats (licensing overhead, audit risks, extra manual labour, deeper knowledge needed, legal concerns) make it very, very hard to justify.
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@scottalanmiller said:
@Aaron-Studer said:
The real question here is will VMware realize this, and give away more for free, or will they stick to their guns and try to convince people there product is better?
It's a good question but VMware is caught in a difficult position - VMware sells a product that is otherwise free in the rest of the industry. This means that they cannot give it away or their entire revenue base is literally gone overnight and they have no way to make money. Microsoft, Xen and KVM all have good reasons to be free and have no need to make money from virtualization. VMware is the opposite.
This is the same problem that caught Windows in the face of Linux. Linux, being free and open source, was able to take over the server market in just ten years and while Windows still plays a very large role, the dominance of a paid option evaporated very, very quickly and holding onto the piece of the pie that they have is based primarily on having a ton of very unique options built into the product and relying on the perception that their competition is complex. VMware lacks both of those things.
VMware's only real hope, that I can see, is to figure out how to make their product so much better that they are worth the money. Otherwise, they are pretty much stuck. They can't be free and they can't really be easier to use than their competition.
VMware could easily go the free with paid support option... there are no companies that are doing support for free at this point in time... although they would lose out on less then half their revenue stream.
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@Aaron-Studer said:
The real question here is will VMware realize this, and give away more for free, or will they stick to their guns and try to convince people there product is better?
Add more features or even lower pricing is likely. Free doubtful. They are suppose to be adding things like more virtual networking, in built firewalls and virtual routers etc.
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Windows, unlike VMware, has the advantage of a massive third party ecosystem that is unique and Microsoft is able to derive value from many different sources like their desktops, MS Office, Office 365, Azure, etc. Microsoft is well aware that the Windows Server value proposition is getting to be very lean and is rapidly diversifying and focusing on higher level platforms to mitigate this risk. This is the nature of the closed source, commodity platform beast and they know it well. Windows Server served them well for a long time but it cannot last forever and will not.
In time, Windows Server cost will drop until it is not a revenue stream and, hopefully they will wisely go free and license free at that time so that it remains an incredibly bit of technology and will regain much of its lost market share. It might even go open source at that point, but that is a difficult thing to do with code that was never intended to be opened.
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@scottalanmiller said:
@coliver said:
I doubt they have to change much of anything at this point, in the future they will try to rebuild their licensing to reflect this new competition. There are so many VMWare users out there that wouldn't switch to anything else. I've talked to several of them who said I was stupid for deploying Hyper-V when ESXi is so inexpensive.
Much like the Windows versus Linux crowd. Linux can provide nearly any service that Windows can, but the Windows deployment density is heavily (but not entirely) based on having a huge user base that refuses to learn something new or is afraid of change or needs to play politics rather than being financially advantageous to the company.
Windows, like vSphere, is an excellent product. But the cost for it and the other caveats (licensing overhead, audit risks, extra manual labour, deeper knowledge needed, legal concerns) make it very, very hard to justify.
No argument there, the Windows proposition seems to be getting more and more hard to justify with "cloud" models readily available.
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@coliver said:
VMware could easily go the free with paid support option... there are no companies that are doing support for free at this point in time... although they would lose out on less then half their revenue stream.
That's true, but seems unlikely. The revenue drop is probably more than they could withstand. Citrix is already doing this model, as is Microsoft. VMware lacks the additional revenue to make this work, I think.
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@mlnews said:
@coliver said:
VMware could easily go the free with paid support option... there are no companies that are doing support for free at this point in time... although they would lose out on less then half their revenue stream.
That's true, but seems unlikely. The revenue drop is probably more than they could withstand. Citrix is already doing this model, as is Microsoft. VMware lacks the additional revenue to make this work, I think.
You think a crucial part of their revenue comes from new installs? I would assume that is minuscule compared to their on-going support/licensing. They are also spreading into attached markets with their VDI manager/infrastructure, Horizon.
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@coliver said:
You think a crucial part of their revenue comes from new installs? I would assume that is minuscule compared to their on-going support/licensing. They are also spreading into attached markets with their VDI manager/infrastructure, Horizon.
Ongoing licensing is part of that same revenue. Both new installs and ongoing licensing would evaporate together.
For Essentials, support is not even included as it is. The "paid support" model is already there and they still are charging for the initial install as well as ongoing licensing.
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@coliver said:
@mlnews said:
@coliver said:
VMware could easily go the free with paid support option... there are no companies that are doing support for free at this point in time... although they would lose out on less then half their revenue stream.
That's true, but seems unlikely. The revenue drop is probably more than they could withstand. Citrix is already doing this model, as is Microsoft. VMware lacks the additional revenue to make this work, I think.
You think a crucial part of their revenue comes from new installs? I would assume that is minuscule compared to their on-going support/licensing. They are also spreading into attached markets with their VDI manager/infrastructure, Horizon.
There VDI stuff isn't used much. XenDesktop is a way better VDI solution than VMware's. Also when has anyone needed to use support? Seems pretty rare. It's about like calling Microsoft support. Never need it. I've heard stories online of some people neededing it but don't know anyone who has.
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@coliver said:
They are also spreading into attached markets with their VDI manager/infrastructure, Horizon.
How valuable is that likely to remain if businesses are forced to "do VDI with another vendor", "do VDI with VMware and everything else with someone else" or "have a uniform environment?"
I think that VDI and Horizon will do little for them, long term, because the value to that rapidly erodes in the light of everything else. And SMBs do very little VDI and by the time that they do, VMware will already not exist in their market.
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@thecreativeone91 said:
There VDI stuff isn't used much. XenDesktop is a way better VDI solution than VMware's. Also when has anyone needed to use support? Seems pretty rare. It's about like calling Microsoft support. Never need it. I've heard stories online of some people neededing it but don't know anyone who has.
That pretty much sums it up for me. There is better VDI available from the free players which allows you to have a lower cost, lower risk, uniform virtualization environment on top of the alternative VDI.
And support I totally agree. If you have an MSP partner, it is they who would use support and not the customer and they have heavy interest in being competent rather than spending money on support whenever possible. Internal IT running one of these products should not need support and the community support is very good if needed. These are super simple products. The only places I see spending money on support are huge enterprises with deep pockets and only do so because of a combination of playing politics (having someone else to blame is better than doing the right thing for the business) or hiding the incompetence of the department (spending a fortune on "support" to hide the fact that the vendor is doing the work instead of the IT guys.)
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@thecreativeone91 said:
@coliver said:
@mlnews said:
@coliver said:
VMware could easily go the free with paid support option... there are no companies that are doing support for free at this point in time... although they would lose out on less then half their revenue stream.
That's true, but seems unlikely. The revenue drop is probably more than they could withstand. Citrix is already doing this model, as is Microsoft. VMware lacks the additional revenue to make this work, I think.
You think a crucial part of their revenue comes from new installs? I would assume that is minuscule compared to their on-going support/licensing. They are also spreading into attached markets with their VDI manager/infrastructure, Horizon.
There VDI stuff isn't used much. XenDesktop is a way better VDI solution than VMware's. Also when has anyone needed to use support? Seems pretty rare. It's about like calling Microsoft support. Never need it. I've heard stories online of some people neededing it but don't know anyone who has.
I haven't had the opportunity to play with VDI much... although I applied for a job that works with Horizon. I can understand where XenDesktop comes into play though it is a very mature software from what I have seen.
Good point on the support, I guess I am looking at a hypervisor as a fragile piece of software when all my experience points to the exact opposite.
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@coliver said:
Good point on the support, I guess I am looking at a hypervisor as a fragile piece of software when all my experience points to the exact opposite.
In theory a hypervisor is tiny, does very little and insanely stable. If it is anything else, it should be avoided. All four big boys are great this aspect. This is partially why the Linux Foundation and Microsoft make the hypervisors free.... they do very little and need very little care and feeding. It's a place where if you don't make it free, someone else will (and has.) That there are two, enterprise, open source and free alternatives (Xen and KVM) already shows this. And in the Type 2 space, VirtualBox is free leaving effectively no room for alternatives there either.
Operating Systems eventually migrate to open source and free over time. Hypervisors do the same but much, much faster.
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Is the time for on-premise servers in the SMB nearly over? In which case, choice of hypervisor becomes a moot point, right?
So for me, in the short to medium term, I've invested a lot of time and effort into VMware, so I won't be switching to anything else, and in the medium to long term I'll be running VMs in the cloud, so don't really care about hypervisor technology any more.
I know cost isn't a factor as $600 is trivial. I've invested far more than that in my time and effort.
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@Carnival-Boy said:
Is the time for on-premise servers in the SMB nearly over? In which case, choice of hypervisor becomes a moot point, right?
As much as I love moving away from on-premises servers, I don't believe that the era is nearly over. Here is how I feel, without putting a ton of thought into this question:
- While most workloads in the SMB should not be on-premises, about 10% should be and will remain this way for a long time, slowly lowering but never completely going away. Workloads that will long remain will be heavily cache and security based (proxy servers, DNS, AD, scanning, filtering, machine controllers, etc.)
- While most workloads should not be on-premises, many will remain because SMB folk have slow upgrade cycles and tend to wear tin foil hats (both IT and managers outside of IT) and do not apply logic and business acumen to these decisions in many cases. So on-premises workloads will exist where they should not for a very long time.
- Even when moving off-premises to colo, the needs for virtualization choices remain exactly as they do on-premises and colo represents a large percentage of the off-premises server workloads in the SMB and will continue to do so, while slowly increasing as on-premises lowers but slowly decreasing as the move to VPS and cloud IaaS happens.
- Even in the cloud the choice matters to some degree. Using Xen, while an "under the hood component" allows the best clouds like Amazon to outperform their competition and keeping the pricing low while providing unique features like Xen PV. Using the wrong virtualization platform, while not a problem in and of itself, was a key early indicator that something was wrong with CloudatCost, for example. We knew because they were using VMware that their costs were higher than they should be and their features fewer - which in turn indicated a lack of necessary support skills internally. It is only an indicator, but one that played out very realistically.
