First we have the highly anticipated VMware offering….Off the charts. VMware is now sporting a market cap of a cool $20B (symbol: VMW). This is about $4B higher than our friends at Symantec (SYMC). And then immediately following the IPO, XenSource gets swallowed up by Citrix for a whopping $500M – likely a bit more than 150 times last twelve months trailing (LTM) revenue. Nice work if you can get it.
So, back to the theme of “IT in Transition”. The news about VM is interesting. But “interesting” does not warrant an exclamation mark or a period, it’s merely a comma. We have a long way to go.
By all accounts virtualization is still in its infancy. Market estimates are showing perhaps $2B of trailing revenue directed to vendors that supply various virtualization technologies. And VMware is about half of that. The more interesting fact is that most, if not all of this revenue is for pilot and proof of concept work. We haven’t seen the real demand play out yet.
How we manage IT in an increasingly virtual IT world is still being hotly debated. As with other emerging technologies that have great promise (web services come to mind), we often leave the “details” to later in the adoption cycle.
One of the big concerns has been “how do I make sure my system is constructed with code that I trust?” and “how does security work in this on-demand world?” Sound familiar?
I would offer that the same IT controls and best practices being established around monolithic computing (standard reference image management, etc.) are even more important in the virtual machine (VM) world. Effectively addressing these needs, and helping our customers to assure that the VM’s are constructed and deployed in a high-integrity state will enhance the speed of enterprise adoption for virtualization.
But what about the challenge of compliance in the virtual domain? This can be readily and transparently solved with the same methods, but we’ll leave that discussion for another day.
Anyway – Wow. We have a front row seat on some serious IT transition opportunities and challenges. Should be an interesting couple of years.