VMware (NYSE: VMW) this week launched dozens of new products and initiatives as part of its annual tech confab known as VMworld. Overall, the vision of the future is clear: The company intends to beef up security and networking, reinforce its dominance in cloud management, and become a major player in the world of multicloud management including the emergence of Kubernetes platforms for managing hybrid and multicloud compute capabilities.
The urgency is clear, as VMware is the midst of some massive changes. The momentum in its share price has stalled since the departure of longtime CEO Pat Gelsinger for Intel. As I correctly predicted, that sped up the spinoff from Dell Technologies (NYSE:DELL), but that has proven to be a disappointing catalyst for VMware’s stock price.
The company is looking for new sparks under the leadership of CEO Rangarajan “Raghu” Raghuram. Much of the buzz in the cloud world has shifted to the public cloud players such as Amazon and Microsoft as well as hot new cloud companies such as Cloudflare (NYSE:NET), Twilio (NYSE:TWLO), Datadog (Nasdaq:DDOG), and Hashicorp (private). It’s time for VMware to capture some new excitement by attacking new markets, which is what much of the message at VMworld was all about.
Queuing up Cross-Cloud Services
From the beginning of VMworld this week, VMware sent the multicloud message loud and clear.
“Multicloud is the model for the next 20 years,” said Raghuram in the opening general session keynote. “Multicloud is the center of gravity for everything we do.”
Some of the strongest trends in enterprise technology right now include a shift to public cloud, multicloud, and hybrid cloud deployments, all of which threaten VMware’s dominance in private-cloud deployments. There is also growing interest in the cloud applications platform Kubernetes, which enables developers to build apps that run in any cloud without an operating system or a Virtual Machine (VM). Because VMware grew up in the VM world, this is seen as a challenge for the company.
Over the past few years, VMware has been stocking up in emerging cloud technology growth areas, acquiring 20 companies in just the last years. Some of the key acquisitions have included Carbon Black, Cloud Health, Pivotal, SaltStack, Heptio, and Bitnami. Much of the focus has been in multicloud management, Kubernetes, and security.
Many of these acquisitions are bearing fruit as VMware reorients its portfolio to the multicloud world. VMware’s Cross-Cloud services include an array of products, including VMware Edge platform, SASE security, AI, and an expansion of its Tanzu applications management platform.
Some of the key announcements included:
VMware Cloud with Tanzu services – VMware announced that the Tanzu portfolio of managed Kubernetes services will be offered free with VMware Cloud. Customers can also integrate management of VM-based and multicloud apps that run on Kubernetes. It also includes a number of technology upgrades and R&D investment such as Project Arctic, which aims to merge vSphere and cloud connectivity in a hybrid cloud model.
Networking security, cloud security, and app security – VMware announced a number of security and cloud security initiatives in its networking and infrastructure products ranging from NSX to Carbon Black. VMware has been a leader in securing workplaces for Work From Anywhere (WFA), which it delivers with Workspace ONE. By recently adding Carbon Black to secure endpoints, VMware now has an integrated portfolio of Zero Trust Network Access (ZTNA), microsegmentation, Cloud Access Service Broker (CASB), API security, workload and identity-based security, and endpoint security to provide a way to lock down any environment across any network. The integration of these services is currently placed in the bucket known as Secure Access Service Edge (SASE).
(For more on VMware’s security announcements, please see our detailed breakdown by analyst Andrew Braunberg.)
Upgraded Edge Platform – VMware has integrated several products, including its highly successful VeloCloud software-defined wide-area networking (SD-WAN) product, into a new VMware Edge portfolio that includes an edge compute stack, SASE, and VMware Telco Cloud. The idea here is to provide a flexible networking and compute platform that can run anywhere, in any format from thin edge to fat edge, and provide a range of services to adapt to a wide range of new high bandwidth 5G services. This also includes integration with the Dell EMC VxRail hyperconverged infrastructure (HCI) product.
Kubernetes and Security Are Key
The largest growth in technology markets right now comes in the form of cybersecurity and cloud products. Security and Kubernetes offer VMware the best path to capturing new growth.
VMware is positioned well in cybersecurity, with an “end-to-end” security path from endpoints via Carbon Black, network security at the edge with SASE, and cloud security.
Because the Kubernetes market is still young, that is another big opportunity. VMware’s big investment in Kubernetes has positioned Tanzu as a potential leading product for building, managing, and running cloud-native applications.
One of the question markets is what happens to VMware Cloud. Do IT managers really need a cloud management platform to manage operations in other clouds? VMware’s challenge will be to pivot VMware Cloud to an applications and multicloud management product, rather than a “lift-and-shift” program for putting private clouds in public clouds. One of VMware’s more savvy moves at VMworld was to announce that Tanzu on VMware Cloud is now free, hoping to expose more people to Tanzu and provide more value-add services for VMware Cloud.
VMware has done a solid job building up the tools and technology to deliver an extensive portfolio for multicloud and hybrid operations. The mission will now be to convince customers it has the offerings to help them migrate to a world of multiple clouds, distributed applications, and WFA environments. In other words, investors will looking for evidence that the two big new efforts – security and Tanzu– get traction in the market and start producing good numbers.