The VMW exec says there are four drivers for growth at the company: core virtualization platform, which he says is being refreshed every 24-36 months; management tools; desktop virtualization; and applications and applications platforms...
VMware: 90% of Servers Could Be Virtualized; Customers At 25%
By Eric Savitz
Barron's
February 23, 2010, 1:20 PM ET
In a jam-packed standing-room only session at the Goldman Sachs tech conference in San Francisco, VMware (VMW) senior VP Raghu Raghuram, who runs the company’s virtualization and cloud platforms business, said the company’s customers have so far virtualized about 25% of of their existing servers. Raghuram says the 25% level could go easily to 90%, with regular commercial workloads like file, print, business application and Sharepoint servers.
Raghuam was interviewed on stage at the conference by Goldman analysts Sarah Friar and Derek Bingham.
(I’d note that earlier today, Microsoft’s Bob Muglia said that 20% or all servers shipped are not virtualized; he also asserted that Microsoft is taking market share from VMware.)
The VMWare exec says many small- and medium-sized companies have not virtualized any of their servers. And in fact, Raghuram says, new customer growth at VMW is concentrated in the SMB market. In the enterprise, growth is driven by higher penetration rates for server virutualization, as well as purchases of additional VMW software applications, including business continuity, site recovery manager, and other apps.
Raghuram says 30% of customers have signed up to deploy Vsphere, the company’s software for data-center virtualization for private software clouds; 75% of those expect to deploy this year.
The VMW exec says there are four drivers for growth at the company: core virtualization platform, which he says is being refreshed every 24-36 months; management tools; desktop virtualization; and applications and applications platforms, including Zimbra, which the company is acquiring from Yahoo.
On the potential for desktop virutalization, he says that in late 2009 and continuing into 2010, they have been seeing a significant increase in pilot tests. The VMW sales force is spending more than half of their time working on desktop implementations, he reports. Every time he talks to a customer, desktop dominates the conversation. Raghuramsays says a healthy number of customers have crossed 5,000 seats, or even 20,000. But he adds that they all want to tie adoption to to modernization of the desktop - that includes hardware modernization, modernizing the OS - in other words adopting Windows 7 - and modernizing application roll out. That requires extensive planning. So he says that while they see a lot of interest, that is what gives them pause, expecting adoption to proceed at a more measured pace.
Friar contends there was a change of momentum in Q4 on desktop virtualization adoption; Raghuram said 2005-2006-2007 people were flat out of data center capacity. In terms of desktop, TCO benefits, security benefits, break-fix benefits are being proven out. But he repeated that the fundamental driver of adoption is when customers execute on desktop modernization strategy.
VMW is down 55 cents, or 1.1%, to $47.82.
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