VMware Sails Into Uncharted Waters With Datacenter OS

VMware (NYSE: VMW) is working to move past its internal shakeups with the revelation of a new operating system for virtual server and storage management. The Virtual Datacenter Operating System (VDC-OS), announced Monday at the start of the company's VMworld annual conference in Las Vegas, will offer an all-around solution to bring multiple resources onto a single cloud and make resource sharing significantly easier for customers.

VMware is coming off of a rough patch started by its CEO's departure in July. The company is now focusing its efforts on its new product roadmap for 2009 in an attempt to put the past behind it and solidify its path for the future.

Virtual Shift

The VDC-OS marks an expansion from the single server virtualization concept and thus a shift in VMware's overall focus. The product is designed to cut down on downtime, boost overall capacity, and increase sharing ability between applications.

"The first 10 years of VMware were about enabling customers to build out dynamic and efficient virtual infrastructure that delivered high levels of flexibility and resiliency," Paul Maritz, VMware president and chief executive officer, explained. "The next generation of innovative technologies in the Virtual Datacenter OS will enable companies to realize the promise of enterprise cloud computing," he said.

Unlike the recently unveiled Microsoft (Nasdaq: MSFT) System Center Virtual Machine Manager, VDC-OS will not attempt to manage non-virtualized hardware, instead allowing customers to use third-party tools for those purposes. The software is expected to become available sometime in 2009, though no specific date has been set.

Climbing onto the Cloud

Another significant announcement from VMworld is the formation of vCloud, an Internet-oriented computing cloud platform being offered through more than 100 new partners. Providers on-board range from AT&T (NYSE: T) to Verizon and British Telecom.

"Until now, businesses have faced too high a hurdle to realize the benefits of cloud computing, including wholesale disruptive infrastructure and application changes," Maritz stated.

vCloud will be made available in multiple levels of service, with the goal of targeting both basic users and those who need advanced functioning.

The Big Picture

Of course, amidst all the excitement, one can't ignore the questions over internal stability. Following CEO Diane Greene's ouster and the accompanying 27 percent drop shares suffered in July, a handful of other executives have jumped ship. Most recently, Greene's husband and VMware cofounder Mendel Rosenblum announced his resignation, causing another 7 percent slip in shares in early September. Still, VMware has a lot working in its favor -- if it can harness the positives.

"They've been in this game longer than the other players, so they have the advantage of more mature technology," Roger Kay, president of Endpoint Technologies Associates, told TechNewsWorld. "They've also had a chance to cherry-pick the customer base, so most of the early-adopter large enterprises already have VMware," he noted.

Looking Ahead

The direction VMware is heading with its early conference announcements may be right on-track -- but the virtualization race isn't over yet. VMware still has work to do to maintain its stronghold on the industry.

"What they really have to do is something on the order of building out their suite to try to capture some of the adjacent areas that competitors like Microsoft are filling in pretty fast," Kay suggested.

"They have to be able to manage the whole data center, not just the virtual machines -- and they have to be able to manage other people's virtual machines, not just their own. I think that's the area where VMware is kind of behind," he concluded.