David Cappuccio

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David J. Cappuccio
Research VP
6 years at Gartner
41 years IT industry

David J. Cappuccio is a managing vice president and chief of research for the Infrastructure teams with Gartner, responsible for research in data center futures, servers, power/cooling, green IT, enterprise management and IT operations. Read Full Bio

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Just a Thought; Will VMware become the next Novell?

by Dave Cappuccio  |  June 30, 2009  |  34 Comments

I know, I know, the title alone can be misleading, but what I’m thinking here is a result of yet another trip down memory lane.   I was talking with a client at the IT Operations and Management conference this week and he was a huge VMware fan (as are many).  During the conversation he was completely dismissing the potential impact of Microsoft (or anyone else) on future virtualization markets, so I convinced him to do a little what if analysis with me, just to see what would evolve.  I started by putting him in the way-back machine and telling him the short version of “what ever happened to Novell”. 

Back in the early 1990’s Novel owned the local area network market – they were as dominant as VMware is today with well over 90% of the market and had an incredibly loyal following (I can attest to this having attended multiple Brainshare events with 10,000+ attendees – and I have the t-shirts to prove it). 

But what Novell and their clients loved was Novell’s technology, and the thought that anybody, especially Microsoft running that paltry LAN Manager product, could supplant them was heresy.  Every year new products (or plans) were announced, and every year the fan club grew.  But in the background there was a small chink in the armor, led by a commodity product that was available everywhere.  Windows 95 was released to great fanfare from the media as a desktop OS but  bundled  under the covers was a TCP/IP stack and some reasonable peer to peer capabilities.  Nobody really cared, especially the Novell fans (you can start thinking about hyper-V here, bundled into Windows 7,  just as a heads up).

As more and more of those new machines came in with Windows 95, more and more companies began using this free IP stack and good enough networking as a departmental alternative to “enterprise Netware”, or in some cases as a departmental add-on.  Novell announced Netware 4.0 with NDS (Netware Directory Services) and while an elegant product in it’s own right, nobody really cared.  It became the Betamax of it’s generation – a great technology that was more complex (or complete) than most customers needed and the march towards good enough networking continued.  It wasn’t until years later that Active Directory from Microsoft even came close to doing what NDS could do, but by that time it no longer mattered, Netware was on the long slide to Nevermore.

Ok, fast forward to today and ask what the heck this has to do with VMware.   Well, let’s see;  VMware owns the market, well above 90%, and continues to come out with more and more innovative products.  VMware has a loyal following of customers who see no reason to change direction – after all, the product works, the vision is sound, and the future is clear.  But lurking in the background is this little thing called hyper-V;  not as robust, or as tested as VMware, with almost no install base, and certainly not ready for prime time in most peoples minds.  However, it will be an integral part of Windows 7, Windows Server 2008 and Windows Server 7 in 2010.  Why should you (or VMware) care?  Because like “free networking”, or “free SharePoint”, hyper-V will get used, slowly at first, but as more and more systems get installed the base will increase and within just a few short years companies will discover “(surprise, surprise!) that they have business applications running on both VMware and Hyper-V. 

Do you care?  We all run heterogeneous environments anyway, right?  But if over time I have two VM’s and need to manage them – which management tool do I use?  And here’s the rub – VMware is making great management tools – for managing VMware.  But Microsoft’s management suite is designed to manage multiple VM’s from multiple vendors, including VMware.  Now, if you find yourself in a situation where VM’s of all types are proliferating with each new system brought in (and they will), the key to reducing your complexity becomes the management tools – and over time standardization of the core products tends to track towards those tools.  If the choice is multiple tools to manage multiple vendors vs. a single tool, which decision will most likely prevail?  And if you eventually standardize on a single management tool, what’s the likelihood that the “preferred” platform was one designed specifically to run under that vendors tool suite? 

Just a thought….It’s VMware’s market to keep.  Let’s wish them luck.

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34 Comments »

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34 responses so far ↓

  • 1 Ms. Terry Lee   June 30, 2009 at 7:59 pm

    Very interesting article. I’ve been around long enough to know about Novell too. I love Vmware and prefer it to Hyper-V but primarily because its just version 1 and some of the kinks are not worked out. I tell many folks, Microsoft doesn’t enter the ring to lose. They plan on fighting with everything they have and Hyper-V/2008 will catch up quickly to what Vmware has been perfecting for years.

    It will be interesting to see how things play out in the next 2-3 years. It makes me remember when Informix was the SQL database of choice and Oracle was the up-and-coming database platform. Oracle gave away millions of copies of the desktop software and got people hooked. Pretty savvy marketing…just like adding hyper-V for $28!!!

    Fast forward and here we are again. Who will be the winner? Deep pockets MS vs. The current champion Vmware….hmmmm?

  • 2 Mike Laverick   July 1, 2009 at 4:46 am

    “History always repeats itself twice: first time as tragedy, second time as farce”. Karl Marx.

    This is fine but I would caution against historical inevitability. The premise of will VMware become another novel/netscape/lotus begins and ends with any assumption that they will be dumb enough to repeat their mistakes.

  • 3 Rahul Anand   July 1, 2009 at 6:31 am

    VMware is colonizing the virtualization market at this juncture. It’ll be interesting to see how they play in the consolidation stage. History has enough evidence to prove that companies building radically new markets may not necessarily scale it up and more importantly ‘be on top.’ In their book, Fast Second, Constantinos Markides and Paul Geroski provide examples to show how smart companies bypass radical innovations to enter and domonate new markets. Eg., Apple introduced the PDA, Newton in 1993 – creating a new market for handheld computers. However, within 10 years, when the market for the product grew rapidly, the spoils went to HP and Palm that followed Apple into the market.
    VMware will most certainly be aware of the game being played. It remains to be seen what strategy they adopt to stay on top.

  • 4 Steve Kaplan   July 1, 2009 at 9:10 am

    Nice article. I’ve been on both sides with Microsoft for decades. Microsoft is one of the greatest companies of all time. It is probably the first company to zoom to extraordinary market cap without any assets outside of intellectual property. I would never be foolish enough to rule Microsoft out of any fight. That being said, there are is an important difference with virtualization that VMware may be able to continue capitalizing upon. As is obvious from its price-based competitive messaging, Microsoft still views virtualization as an application. VMware views it as a platform. Organizations were able to introduce Windows NT servers into an environment while still maintaining their Novell servers. If an organization embraces 100% virtualization, this will not be as easy to do. The capabilities of vDS alone, and particularly with Nexus 1000V for Cisco shops, auger toward an all vSphere solution. This becomes even more important when cloud computing is a future initiative. Unlike Novell or Lotus, data center virtualization has an exceptional and measurable ROI that makes the relative value that VMware delivers much easier to justify.

  • 5 Tarry Singh   July 1, 2009 at 4:31 pm

    Virtualization is increasingly becoming an application in every vendors portfolio. Everyone has it. Novell. Red Hat. IBM. Oracle. Microsoft.

    Who is/re the outsiders? Well guess yourself. Who make loads of cash by selling their apps.

    VMware is/has done excellent work but 2010 will be a year to witness many exciting things. I don’t remember Novell in IT shops anymore. Eventually virtualization will be just a tool in your toolkit in the cloud.

    /ts

  • 6 Sam Johnston   July 1, 2009 at 6:32 pm

    Thanks for an insightful post – I definitely think you’re onto something here, and it’s not the first time I’ve said it either.

    The thing is that the hypervisor is already commoditised. Worse, it’s free and there are various open source alternatives like Sun’s VirtualBox (which just released another major version yesterday). Then you’ve got Xen, KVM, etc. competing directly as well as physical hardware management tools coming down from above and containers/VPS’s eroding share from below. VMs may be all the rage today but the OS is overhead so there’s cloud platforms to think about too…

    VMware’s main advantage is having a serious solution today which it can roll out to the large base of enterprise clients they have developed over the last decade. You can bet they’re busy making hay while the sun’s shining as it won’t be long before people realise they’re not the only show in town.

    As you say it’s their market to keep, but I’m sure our enterprise clients will be happy to have a thriving competitive marketplace.

    Sam

  • 7 Jim Moyle   July 2, 2009 at 5:24 am

    I agree with you that VMware has the potential to lose the market due to a growing installed base of a ‘free’ hypervisor. The first indications of this I’m seeing already in various clients. I’m seeing the growth of the free hypervisor in two distinct ways.

    Situation 1 – VMware, in prod environments Hyper-V in test and dev environments.

    Situation 2 – VMware for mission critical prod environments, Citrix XenServer in non-critical prod environments (without essentials), XenServer is also used in test/dev.

    Already we have heterogeneous hypervisor installations within organisations and I see this happening more and more as time goes on. If VMware continue to cripple the features on it’s free offering (ESXi) they will be losing out on market share. They even put pressure on Veeam to withdraw it’s ESXi compatible backup solution.

    VMware WILL lose market share, the question is, how much? What is a more interesting question I think, is that when Hyper-V and Citrix do gain market share whether they will start competing with each other instead of combining against VMware.

  • 8 Anton Gostev   July 2, 2009 at 6:52 am

    Jim, I don’t think Hyper-V and Citrix will ever be competing directly… Microsoft and Citrix have always been great partners – Citrix will probably lose to much if they declare war at Microsoft over virtualization. War they could never win because they stand no chance against Microsoft’s systems management portfolio. Besides Microsoft has traditionally very strong partner ecosystem, and will have many more vendors building solutions for Hyper-V.

  • 9 Anders Gregersen   July 2, 2009 at 6:57 am

    I also experienced the demise of Novell and we still after all this time have the same Directory experience with Active Directory. As you say, it is likely that Hyper-V will “creep” into mainstream, not because it’s a great product, but because it’s included, free or nearly free and has just enough features. Some vmware customers look down on Hyper-V because of it’s lack of “enterprise” features (even when looking at the R2 release). Learning that any one product is not the answer to our prayers for more than a few years is the key lesson here. It has taken Microsoft near two years to accomplish what vmWare did in 5-6 years. It might not sound like it, but I am a vmWare fan, just not for eternity.
    I hope that the “betamax” product survives and fear that the “vhs” do, but it really doesn’t matter, I will more or less be able to do the same with either product in the end. Let us enjoy that we actually have a choice, some people still remember the time where choice was only a dream.

  • 10 Mike Fratto   July 2, 2009 at 8:35 am

    David, interesting thought but I think VMWare is in a much different place than Novell. I think the comparisons are surface. VMWare is much more focused on their strengths and aren’t likely, I don’t think, to make such a radical shift that Novell did from Netware 3.x to 4. VMWare could still blow their lead, but any dominant company could. I could be wrong but I wrote more here.

    http://www.byteandswitch.com/storage/virtualization/why-vmware-wont-follow-in-novells-footsteps.php

  • 11 Cole   July 2, 2009 at 10:25 am

    This is a whole different scinario. If you will remember when this thing all started, we put bunches of applications on the same server. Neither Novell, nor later Microsoft, however built their os systems in such a manor that applications were prevented from crashing each other. Today we are still in that same situation. Vendors insist on a server just for their app. Really Why would microsoft solve this issue since they are selling OS systems like crazy.

    Along comes Vmware on linux.
    Now not only can we protect Apps from each other but also OS systems.

    Are you going to trust an OS which can’t even keep Apps from crashing each other to prevent OS systems from crashing each other?

    Not I

  • 12 Ann   July 2, 2009 at 12:49 pm

    Funny that Novell is mentioned in this article as a warning to VMWare…. Novell’s PlateSpin suite does manage VMware and other hypervisors with ease. I guess being Novell isn’t a bad thing (just being NetWare was).

  • 13 Ian Bruce   July 2, 2009 at 3:58 pm

    It’s too easy to confuse a product (NetWare) with a company (Novell). Your analogy may work at the product level, but fails at the company level.

    Novell is a much different company today: the second largest provider of Linux, from the desktop to the data center; a technology leader of identity and security management solutions; and a longtime leader in the collaboration market. We even have a unique set of solutions for virtualization and workload management products that complement – and compete – with VMware.

    Ian Bruce – Novell

  • 14 Storagezilla   July 2, 2009 at 3:59 pm

    Disclaimer: I work for EMC.

    No mention of the focus change and the hundreds of millions Novell spent building an application suite (WordPerfect, Quattro Pro, etc) in an attempt to compete against Microsoft at the exact time they should have been focusing on extending NetWare.

    Good enough and cheap enough will have an impact in the market. It’s up to VMware to keep advancing their platform but sometimes it isn’t NetWare Vs NT, it’s Quicken Vs MS Money.

    But here’s the rub. I think vSphere is VMware’s Windows 95. their big bang good enough cloud operating system with a strong developer community and a bunch of APIs for your data center.

    Microsoft will ship Hyper-V, but in this equation they look a lot like IBM pushing OS/2 WARP.

  • 15 Storagezilla   July 2, 2009 at 4:01 pm

    Before anyone mentions it I know they’re already shipping Hyper-V, the words “with everything” got snipped in editing, Apologies.

  • 16 VMware’s Proprietary Virtualization is Still Under Fire | google android os blog   July 2, 2009 at 5:34 pm

    [...] virtualization client since then, as well as many other open source tools. Today, Matt Asay and David Cappuccio consider whether there are several analogs between Novell and VMware, and what lies ahead for [...]

  • 17 Greg Shields   July 6, 2009 at 9:59 am

    Fantastic read on the state of the human side of technology. I’ve seen just this pattern rear its head so many times that I’ve started coining a law about it: “The Shields Law of Technology Fanboyism”.

    After seeing this article over the weekend, I figured it was time to come out publicly with this piece that I’ve been tooling around with for years.

    The law states simply: “The decibel level of a technology’s fanboys increases in volume to the point where that technology becomes irrelevant.”

    We saw this with Netscape > Mosaic. We saw it with Microsoft > Novell. We’re seeing it once more with Microsoft > VMware. The aficionados of a particular technology (that, admittedly is very, very good product) don’t see the upcoming winds of change, and instead fight harder and harder for a losing financial model.

    Here’s my post on the law: http://www.realtime-windowsserver.com/resources_for_admins/2009/07/gartner_indirectly_and_unknowi.htm

    Love to hear your thoughts.

  • 18 Non sheep   July 6, 2009 at 12:52 pm

    Novell still makes products that are head and shoulders above Microsoft. The disparity of marketshare just goes to show that marketing and sheep mentality will keep companies like Microsoft on top and the better companies in the backseat.

  • 19 Fernando   July 6, 2009 at 11:03 pm

    As many people pointed, the similarities are only on the surface.
    MS crushed Novell, because NT could easily replace Netware, even on demanding scenarios.

    Hyper-V is cheaper, but it cannot replace VMware on enterprise customers. Hyper-V is linked to the Windows platform, which was never made to be an Hypervisor (the need to have anti-virus is a good example).

    To not mention VMware has ex-MS executives, and will would be too stupid to do the same mistakes as many others did on the past.

  • 20 Jim   July 7, 2009 at 1:03 pm

    One could point to countless historical examples – Atari for home game consoles, Commodore for home computers come immediately to mind – of vastly dominant market players who are now but historical footnotes and only in the last 25 years or so.

    The article makes many good points and Hyper-V is very much on the radar at my F500 day job. VMware itself was a slow, steady accretion until eventually it took over and now it’s “virtual first, physical only if necessary.” Now there are 40+ ESX hosts globally and a heck of a lot of SAN capacity dedicated to ESX.

    3-5 years out I think VMware, as great as it is, will largely be marginalized in favor of Hyper-V. Hyper-V will accrete and grow in the enterprise just like VMware did. Microsoft’s price points are just way too compelling on the Enterprise Agreement to ignore and VMware is just really bloody expensive. VMware will be technically superior and dominant for years to come but Microsoft has time and again proven that technical prowess alone does not win the day. Almost everyone uses VMware to run Microsoft so why not simply use Microsoft to run Microsoft? It only makes sense once they can bring Hyper-V relatively close to the enterprise capabilities of ESX. 2.0 is closer but 3.x-4.x will have more maturity and enterprise-testing to be considered truly viable replacements for VMware.

    When that day comes, VMware will have to fight very very hard to keep their current market position as most shops simply won’t have any compelling reason to keep VMware, just as Novell lost out to the MS’ juggernaut.

    That said, there is probably a greater chance for marginalization of any virtual machine platform given the growth of the “cloud” and that ultimately no one may really care what the underlying platform is as long as it works well enough and can be delivered quickly, be it a public or private cloud platform or a combination of the two. Still, someone and some thing needs to run this “cloud” and vast quantities of hardware and virtualization software is needed to grow it so there will still be room for competition for many years to come.

  • 21 Cathal   July 7, 2009 at 4:23 pm

    Windows 95 began the demise of NetWare. The man that was at the helm of Windows 95 then is now at the helm of VMware. Draw your own conclusions :-)

  • 22 RTFM Education » Blog Archive » Will VMware become the next Novell?   July 8, 2009 at 6:31 am

    [...] http://blogs.gartner.com/david_cappuccio/2009/06/30/just-a-thought-will-vmware-become-the-next-novel… [...]

  • 23 Disruption?   July 8, 2009 at 10:36 am

    How about another question – why pay for the Microsoft OS? With software vendors building virtual appliances, what is the role of Windows? Why keep paying Microsoft an arm and a leg for functionality that you can easily get for free?

    Note on the consumer side, Google’s announcement of Chrome as an OS for netbooks…

  • 24 Will Google save VMware from Novell-like fate? - Virtualization Pro   July 9, 2009 at 9:29 am

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  • 25 Oliver Leach   July 9, 2009 at 11:12 pm

    I believe Microsoft will become competitive in the virtualisation market although one of the big head starts that VMware have is the fact they rushed their product to market with ESX3.0 three years ago. It was riddled with bugs and in my opinion was not really stable until 3.02. I’ve dealt with purple screens, virtual network switches dropping, management GUI issues, SAN incompatibilites and the likes. By rushing the product to market they managed to get a huge share of the market and an enormous amount of interest from the general public. The platform is now bullet proof, robust and easy to manage and many many environments are going with VMware as their preferred choice. I can see however that maybe in 5 years or more, Microsoft will become on par with all main stream virtualisation products and slowly, bit by bit their Hyper V product will start to grab some of the market share and could become the preferred virtualisation choice. Wherever you go you find Microsoft products in every computer network, whether it be server, desktop or applications. This is Microsofts biggest advantage and why they will tighten the grip of the virtualisation market. There is no other server operating system that can really challenge the Windows Server products – I do take linux OS’s into consideration here as really it’s not an OS to challenge the Windows Server Product taking in to account the LAN management components. And therefore when you have so much of Microsoft around in your environment as standard one day may think that Hyper V should be the standard aswell and therefore will become the preferred choice. It’s interesting you mention Netware here but you only have to look at Novell’s Groupwise email system and how many companies have now moved to Exchange.. It could be the same with Hyper V but not yet. Enjoy it whilst it lasts and I’m one of your biggest VMware fans.

  • 26 VMware, the next Novell!? « DeinosCloud   July 10, 2009 at 9:52 am

    [...] this article at Realtime-windowsserver.com! On the same subject there is another article: “Just a Thought; Will VMware become the next Novell?” that is worth [...]

  • 27 Roland Wartenberg   July 10, 2009 at 3:05 pm

    Hi,

    this is an interesting article, indeed. Being active now in the virtualization area for SAP since a couple of years i hear this ‘Vmware will be gone when Microsoft gets more active in the virtualization market’ every couple of months again and again. And i don’t think that we will see the ‘Netscape Microsoft’ or ‘Novell Microsoft’ story again.

    2-3 years ago when Hyper-V was not yet out there VMware ESX had a clear advantage, from a technology point of view, compared to MS Virtual Server, although it wasn’t 100% bug-free neither. When the stand-alone version of Hyper-V was released in October 2008 it looked like that Microsoft is able to catch up with VMware. But now, with vSphere, VMware seems to be ahead in the leading position again. And at the end of the day all hypervisors, talking about the simple basic functionality, are free of charge. So where is the competitive advantage? Why should customers switch from VMware to Microsoft or vice versa?

    I think the decision will be done on the scenario level, so what you can do with the hypervisor and other products around HA, disaster recovery, easy deployment of dev/test/training systems etc. etc. It’s not about the technology anymore.

    And of course it’s about the cloud, where virtualization technology can help to connect public and private clouds using e.g. virtual appliance models. VMware’s vCloud initiative and Microsoft’s Azure are both targeting this market.

    So, Will VMware become the next Novell? I don’t think so, but i also belive that VMware will not keep his +90% marketshare forever. Competition is good for the market, and it’s good for our customers.

    Best regards,

    Roland Wartenberg
    Green IT Evangelist
    SAP

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  • 29 Yusuf Ozturk   July 11, 2009 at 5:24 am

    I still waiting for Linux support from Hyper-V. Hyper-v is the best virtualization product for Windows Machines but I don’t say same for Linux. Today, We use VMWare because it’s good in Linux and has better managment compares the others like Xen. Also paying nothing for Windows in Hyper-v is another advantage. If Microsoft cares more about Linux and Hyper-v supports it, VMWare will lose so many users or VMWare becomes free product. But as you know, SCVMM needs VMWare suit to manage VMWare servers. I mean, there is no way to manage VMWare from SCVMM freely.

  • 30 T   July 20, 2009 at 1:42 pm

    Great article. However, you forgot to mention Netscape’s 95% market share and what microsoft’s free IE did to it.

  • 31 sendro   August 5, 2009 at 8:48 am

    It really is hard to know w; I was going to buy some shares – but now I don’t know. I say forget both products and go with kvm. :)

  • 32 VMware ESXi (Free) - FlyerTalk Forums   February 14, 2010 at 2:21 pm

    [...] much zero differentiating value value now. Which is exactly why you see articles such as "Will VMware become the next Novell?". VMware charges a premium for its hypervisor and has absolutely no management story for the [...]

  • 33 Ray Mann   March 2, 2010 at 3:33 pm

    Interesting article. But I don’t find the technology itself is the driver, but rather the add on killer app… VHS vs Beta, VHS one because the porn industry was using it. Windows vs Novell, Windows one all the development tools MS was giving away made for many 3rp party products. VM vs Hyper-V, where is the killer app? Currently a ton of 3rp party product for managing VM, not so many for Hyper-V (useful ones that is).

    I don’t really see the killer App here (except Amazon or Google in the long run with their cloud offerings). Microsoft has been lucky to have only one point of attack in the past. OS wars = Windows won, App wars = MS Office won, email server wars =exchange won. But today it seems many fronts at once, web browser wars are back, OS is getting a challenge for the money, Office is getting new challenges (Google, SUN/Oracle). Even servers with these app appliance and cloud systems… Many fronts at one time… Not sure if the winner will be Microsoft this time on all fronts. Kind of hard to fight 5 battles at once…

    Either way with the VM world, portability is key. You can bet that any investment in development of VMware environment will not be a complete loss. The VM servers will be ported to the winner platform whomever it may be.

  • 34 Wird VMware das gleiche Schicksal ereilen wie Novell? « Business Ready Blog   March 24, 2010 at 3:26 am

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