Growing vmware
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Growing vmware



Presenting growth strategies for vmware

Presenting growth strategies for vmware



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  • But the overall profitability of the the companies have been stagnant over the last 5 years VMware were the first movers, but industry leaders like MSFT, GOOG are fast followers & have caught up the industryPotential changes in value chain that can cause changes to Industry profitCompanies like Microsoft and Google through their OS can forward IntegrateVendors like IBM can backward integrate through their services Also barriers to entry can be reduced by companies preferring open source like Linux
  • Forward IntegrateIAAAS (Infrastructure as a service): VMware can provide cloud infrastructure to its customers like amazon S3 /Google / MicrosoftPAAS (Platform as a service) VFabricSAAS (Software as a service): Enterprise storage, Salesforce, buying boxUnrelated Horizontal diversificationDevelop Applications for big data Related Horizontal DiversificationMobile Extension of server management desktop applications into the mobile spaceMobile device virtualized: Conceptual of dual personalization on one phone like one for office and other for personalRunning multiple operating systems on the same phone leveraging the benefits of running certain applications in individual OS’s (like wanting to flash in Iphone by virtually running Android on ios)
  • Vertical Integration Forward into SAAS Business Models like Salesforce or AmazonCapital Intensive Business ModelsNo Economies of Scope Advantage for VMware as opposed to IBM and AmazonCustomers Become CompetitorsDestabilizes Core BusinessUnknown MarketDon’t know this customerDon’t know how to sell to themNew Capabilities
  • New Product Development For Big DataSeems Related: As a support strategy for existing customers it is Segmentation and related BUT but as a market its NOT Related. Market is much more about Biz Intelligence than virtualization.Big Data has as much in common with a hotdog stand as it does for VMWAREMarket is UnprovenVMware shouldn’t follow the lemmingsHigh RiskHeavy R&D investment for an unproven immature marketplaceFar from VMware’s Core BusinessBiz Intelligence is beyond their ReachMaybe Someday
  • Market segmentation StrategyAdjacent horizontal markets closely related to their core businessCore business continues and not suffer No stretch too far away from core businessLeverages Core Competencies
  • First move: Extension of server mgmt desktop into the mobile space
  • Then, innovate new product and service use cases, which resonates wholly with core competency
  • Some of the new valuable use cases that a quick brainstorming session arrived at.
  • MicrosoftHas a history of being a fast follower and hence can replicate the mobile virtualization technology fast and catch up with VMware.It can then compete by bundling the mobile virtualization with Windows OS for mobile ORIt can also pre-empt the distribution of the virtualization software by partnering with mobile service providers.IBMIBM can acquire a mobile software development company and build the virtualization technology. The barriers to entry are lowering for this technology as many open source alternatives are available now.Also, IBM does have the potential to enter the mobile virtualization market.Citrix & Parallel Inc.May be able to replicate the mobile virtualizationThey may not be able to replicate it faster and hence may not have an advantage over VMwareNew Entrants such as Google, AppleGoogle and apple are in the leaders of the mobile industry and have the potential to build the virtualization technologyAndroid is 50% of the market and google can bundle mobile virtualization technology into AndroidSimilary Apple can bundle the technology with their iOSCan target SMBs instead of enterprise and gain more market share – Big threat for VMware
  • VMware can sustain the first mover advantage in the new mobile virtualization industry by increasing the Willingness To pay using their added value services from past learnings such as Agility, Security, QoS, Reliability etc.VMware should leverage the brand name in the virtualization industryAlso VMware has lower opportunity cost since they already have the R&D, expertise and knowledge to build the technology.VMware has the repeability from its previous experience in Desktop, servers & data center virtualizationsVMware should use the learnings from its R&D, marketing of innovation from previous virtualization experiencesVMware can avoid hold up by partnering with OS providers such as Google for Android, Apple for iOS OR with Verizon & ATT service providers
  • To summarize the strategyVMware should focus on strategic growth in horizontal diversified market of mobile virtualization industryThey should focus on their core competencies of Enterprise R&D, Marketing of Innovation and DistributionTheir core business should continue and should not sufferThey should not stretch too far away from their core businessThey should sustain their first mover advantage by increasing WTP, avoiding hold up and continuing to lower opportunity costs.

Growing vmware Growing vmware Presentation Transcript

  • Ashwin Bijani Alison Gray JT Klette Curt Nickisch Eric Sondhi Natesh ThangarajanDecember 4th, 2012
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  •  Virtualization Industry: ROIC 80.00% 60.00% 40.00% 20.00% 0.00% 2007 2008 2009 2010 2011 VMware Microsoft Citrix IBM VMware First Mover Potential changes in value chain 5
  • Forward Integration Unrelated Horizontal diversification CPU Big Data VMware Virtual Grolsch Beer Simulation Virtual Machine IAAS (Cloud PAAS SAASInfrastructure) Related Horizontal Diversification Desktop Server Storage Virtualization Virtualization Virtualization 6
  •  Aggressive Fragmented Acquisition Strategy  Before Aug 2009: All 6 VMware Acquisitions Related to Virtualization  After 2009: Over 20 Acquisitions - all over the map 1. Core Business: Security, Datacenter Virtualization 2. Vertical: SaaS, S/W Dev 3. Horizontal: Operations, Big Data Micira iTHCCore Mozy Slide Rocket Dynamic Ops Zimbra Socialcast WanovaSaaS DigitalFuel TriCipher NeoAccel ShavlikSecurity ServiceMgr FastSacle Ionix Config Intergrien ShavlikOperations nLayers Spring Source RabbitMQ GemStone WaveMaker MozyS/W Dev Dec-08 Jul-09 Jan-10 Aug-10 Feb-11 Sep-11 Apr-12 Oct-12 7
  • IaaS VirtualizationHardware OS SaaS Software PaaS 8
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  •  Mobile comprises ginormous growing market Extend server/device management to mobile platforms Seamlessly integrate mobile into existing Virtualization Infrastructure 11
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  • Paging Dr. Ipad App Happy Mobile Creativity 13
  • Meets Three Tests  Booming mobile industry is attractive  VMware is better off ◦ Preempts competition ◦ Increases WTP ◦ Economies of scope  Leveraging R&D“Yes, yes, and yes!” mitigates costs of entry 14
  •  Leverage R&D expertise, build the technology because they are the industry leader ◦ Partner with hardware vendors to integrate hypervisor into mobile devices. Repeatable which is what they did with Intel to ARM. Leverage partnerships with mobile OS providers to integrate the VMware Technology. Desktops  Repeatable marketing innovation by partnering with mobile service providers hence reachingMobile Servers customers – Learning effect Data Centers 15
  •  Avoid exclusivity while forming partnerships with OS providers such as APPL, MSFT or Android (Linux). Avoid exclusivity while formingpartnerships with hardware vendorssuch as ARM. Mobile Market is not mature for Virtualization. Add value/features for high margins like in their server industry such as high availability, security, reliability. Customers may become competitors. 16
  • Citrix or Parallel Inc. Microsoft •Replicate mobile virtualization•Replicate mobile virtualization •Fast followers technology •Pre-empt distribution by bundling •Not a fast follower with OS or partnering with mobile service providers New Entrants - Google, Apple IBM •Acquire mobile software•Build virtualization technology company •Can bundle with mobile OS •build mobile virtualization •Target SMBs instead of technology Enterprise 17
  •  Increased WTP ◦ Added Value with more services such as Security, Agility, QoS, Reliability etc. ◦ Leverage Brand name in Virtualization Industry Lower Opportunity Cost ◦ Economies of scope from desktop, servers & Data center virtualization ◦ Repeatability ◦ Technical know-how ◦ Learning from R&D, Marketing & Distribution of innovation – Cannot Imitate Avoid Hold-up ◦ Partner with OS & mobile service providers 18
  •  Focused strategic growth ◦ Mobile virtualization industry Focus on Core competencies ◦ Enterprise class R&D ◦ Marketing of innovation ◦ Distribution Core business ◦ Continue with same growth ◦ Should not suffer ◦ Should not stretch far away from core business Sustain first mover advantage 19
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