VMware May Be the Most Interesting IT Company of 2015
It’s hard to call VMware an emerging company since they’ve been around since the late 1990’s, and generated over $5 billion in revenues last year alone. Yet 2015 promises to be a year of great opportunity – and growth – as they seek to advance their vision for a software-defined world.
Showing Enterprises how to virtualize their physical servers was VMware’s first great revolution in IT. This simple but powerful concept brought invaluable benefits, such as agility, responsiveness and (massive) profitability to companies of all sizes. Now, VMware is perched at the epicenter of another revolutionary paradigm shift in IT, as companies begin to explore migrating other parts of their networks and datacenters (not just servers!) to a virtualized model. A VMware rep recently stated that every $1 of VMware drags an additional $13 of hardware and services sales. With the increasing popularity of recently launched products such as NSX for network virtualization and VSAN for storage, that ratio almost seems too low!
While the adoption of some of these new products is still relatively low compared to VMware’s core server virtualization business, there is really no place (or vendor) in a customer’s IT environment where (or with whom) VMware doesn’t play. Finally, the company seems to be investing in the future, as they have hired several key personnel away from competitors over the last year. Moves like these privately intensify their growing rivalry with industry behemoths like Cisco – with whom they once had closer ties before the unraveling of VCE earlier this year. Whether or not 2015 will be another breakout year for VMware, only time will tell – but have no doubt that this company will be a major player in next wave of data center technologies.
Data Center Showdown between Cisco and Arista
It’s no secret that Cisco and Arista are not friendly, but their rivalry really shifted into high gear in the waning weeks and months of 2014. John Chambers made comments during Cisco’s Q1 FY15 earnings call touting accelerating sales performance in the Nexus product line versus “merchant-based competitors making a lot of noise in this market.” This was followed only weeks later by two lawsuits filed by Cisco against Arista that accuses the company of patent infringement and stealing copyrighted material. While Arista denies the accusations, they have clearly awoken the networking giant and will need to be prepared for the long and potentially expensive legal battle ahead. That said, these distractions have not seemed to slow down the upstart company. Arista recently announced the release of EOS+, the next generation of their highly programmable and flexible operation system. There will no doubt be other new products and extensions of existing products launched later in the year to compete against Cisco’s more proprietary hardware solutions.
So what should we expect in 2015? Data center vendors will continue to become more polarized as the smaller, niche players like Arista and others will band together around open-standards, interoperability, and truly disruptive technologies – while the large incumbents like Cisco will continue to use their market dominance to drive sales. It’s hard to predict an ultimate winner, but 2015 will surly see this contest continue to escalate.
