Tuesday, August 11, 2009

Will VMware/SpringSource be the Future Foundation for App Development?

We've heard many companies over the last decade hype their vision of a post-OS future whereby the operating system is rendered irrelevant. Back in the mid-late 1990's, Sun Microsystems, Netscape, Novell, and others declared Java the game-changing technology that would be the beginning of the end for Microsoft. We saw how that strategy turned out for Netscape and Novell (and Sun for different reasons), as Microsoft eventually cut off their air supply by bundling its "good enough" browser, directory server, and other widgets into the Microsoft stack for free.

Today, the "new" Netscape and Novell is VMware. Clearly, VMware CEO, Paul Maritz, a former Microsoft executive himself, understands the stakes and the formidable competitor he's up against for dominance in the data center. That's why he and other smart minds at VMware figure it's well worth paying $420 million to purchase SpringSource who had roughly $20 million in annual revenue. It's an expensive bet, but VMware recognizes its strategic vulnerabilities. And it's keenly aware that if it simply continues to innovate at the hypervisor layer, it's only a matter of time before it's driven into irrelevancy by the folks in Redmond -- Similar to what Microsoft did to Netscape and Novell nearly a decade ago.

With SpringSource, VMware gains upper layers of the software stack and the ability to decouple the application from the operating system in much the same way it decouples the operating system from the physical hardware infrastructure today. If Maritz has his way, enterprise developers won't write their applications to an OS anymore. Instead, they will architect applications using the SpringSource open source framework and Java Apache Tomcat application server.

It's a compelling vision, but one fraught with substantial risks. On one side, VMware has Microsoft with Windows Server 2008 R2 and Hyper-V releasing this Fall at 1/6 the cost of VMware vSphere 4. On the other, VMware faces new rivals in 800 pound gorillas, IBM and Oracle, who both happen to own well established Java development platforms in addition to owning the back-end databases and in the case of Oracle, the enterprise applications that run on them. And most of the mission critical middleware and data-centric applications have yet to be virtualized in production by the vast majority of enterprise customers.

Probably the biggest immediate loser in VMware's SpringSource acquisition is Red Hat. It's revenue streams remain largely tied to Linux OS subscriptions and support and they haven't seemed to be able to turn the JBoss acquisition into a sustainable advantage.

If history is any indicator, VMware's odds are not very good against the likes of Microsoft, IBM, and Oracle. Maritz will need more than the firepower of SpringSource to make VMware the future foundation on which enterprise applications are deployed.

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