The document discusses VMware's potential entry into the mobile virtualization industry. It notes VMware's strong financial performance in server virtualization and analyzes the mobile virtualization industry. It determines that entering mobile virtualization meets VMware's tests for attractive new opportunities by leveraging its expertise, preempting competition, and achieving economies of scope. However, it cautions that the mobile market is immature for virtualization and customers could become competitors. It recommends VMware leverage partnerships, avoid exclusivity, add high-margin features, and focus on its core competencies of enterprise R&D, marketing innovation, and distribution to sustain its first mover advantage.
11. Mobile comprises ginormous
growing market
Extend server/device
management to mobile
platforms
Seamlessly integrate mobile
into existing Virtualization
Infrastructure
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14. 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
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15. 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 reaching
Mobile Servers customers – Learning effect
Data Centers
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16. Avoid exclusivity while forming partnerships with OS
providers such as APPL, MSFT or Android (Linux).
Avoid exclusivity while forming
partnerships with hardware vendors
such 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.
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17. 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
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18. 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
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19. 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
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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.