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Jeff Bezos wants the bottom half of earners to pay zero income tax—he says nurses making just $75K should save $12K a year

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Cloud Computing

For VMware, keep friendly tech close (and enemy tech closer)

Andrew Nusca
By
Andrew Nusca
Andrew Nusca
Editorial Director, Brainstorm; author, Fortune Tech
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Andrew Nusca
By
Andrew Nusca
Andrew Nusca
Editorial Director, Brainstorm; author, Fortune Tech
Down Arrow Button Icon
August 25, 2014, 2:43 PM ET
Pat Gelsinger, VMware's chief executive, at VMworld Europe in Barcelona, Spain in October 2013.
Pat Gelsinger, VMware's chief executive, at VMworld Europe in Barcelona, Spain in October 2013.Courtesy: VMware

Bill Fathers stood before 23,000 developers, managers, and executives assembled in San Francisco’s Moscone Center and, after a long aside about cloud computing, couldn’t help but crack a joke.

“This is as exciting as British people get,” he said, his eyes bulging. The audience roared and applauded.

He’s not kidding. Cloud computing and virtualization software is hardly the kind of thing that will get your pulse racing—well, most of you anyway—but it underpins the operations of most major businesses. That’s why Fathers’ company VMware (VMW) raked in $5.21 billion in revenue last year, and why so many people are present and willing to listen to him talk about hybrid cloud computing environments, automating information technology, and software-defined networking at its annual VMworld conference. (Fathers leads the company’s Hybrid Cloud Services group.)

Not the stuff of cocktail party conversations, sure. But back-end computing is big business.

Despite its successes, VMware, which is majority-owned by EMC (EMC), has been threatened in recent years by alternative, low-cost technologies that some of its customers are using to manage and deploy business applications. On Monday, the company made a number of major announcements to shore up its offerings and convince the people in its audience—who are typically responsible for running corporate data centers—that it should remain the preferred choice.

Among its announcements: a new version 5.8 of its vCloud Suite infrastructure-as-a-service product that is said to be better integrated than previous versions; a new version 6.0 beta of its vSphere server virtualization software; a new version 2.0 of its vSAN software-defined shared storage offering; an update to its cloud management platform it now calls vRealize Suite; a family of products it calls Evo intended to speed deployments of software-defined data centers; and VMware Integrated OpenStack, or VIO for short, a software package designed for administrators who seek to deploy both technologies. (Within the Evo announcement, the company announced two products: a hardware-based virtualized networking product called Evo Rail, and a preview of Evo Rack, a data center-scale cloud infrastructure product.)

Further, the company announced a joint initiative with Docker, Google (GOOG), and corporate sibling Pivotal to incorporate containers, a software structure that helps isolate distributed applications in development to reduce complications, in VMware software.

“Infrastructure is not an end to itself; it’s an end to applications,” VMware CEO Pat Gelsinger said from the stage. “It’s all about running apps.”

Two of the announcements are particularly important for the company’s long-term prospects. The new VIO product attempts to bridge a gap between two sometimes-warring parties: system administrators that support the established VMware and its myriad offerings (cheap to implement, expensive to run), and those that prefer the free up-and-comer OpenStack (expensive to implement, cheap to run). The three-way container partnership shows the company embracing a technology that, while similar in concept to the virtual machines on which it built its name, is threatening because it promises faster deployment and lower costs than virtualization.

“Our approach at VMware is to bridge these two worlds,” Gelsinger said. “We believe we have the unique power to be the ‘and’ between these two worlds.”

In both examples, VMware is working to incorporate competing technology with its own to maintain momentum and continue driving earnings for parent EMC, even as investors call for it to spin off VMware.

Gelsinger doesn’t seem to be concerned. “The biggest risk to success is perpetuating the status quo,” he said during his keynote. “Change is inevitable. Disruption is inevitable.”

About the Author
Andrew Nusca
By Andrew NuscaEditorial Director, Brainstorm; author, Fortune Tech
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Andrew Nusca is the editorial director of Brainstorm, Fortune's innovation-obsessed community and event series. He also authors Fortune Tech, Fortune’s flagship tech newsletter.

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