Earlier this week I had an interesting call with VMware’s CTO of SaaS and Application Services, Javier Soltero, to find out the thinking behind its acquisition of microblogging vendor, Socialcast, in May this year. As a collaboration analyst, I have not had any real contact with VMware up until now—at least, apart from through my discussions with Zimbra, the email and collaboration vendor that the company acquired from Yahoo! in early 2010. In fact, upon closer inspection, there is an emerging theme in VMware’s activities here—it bought a third company in April, SlideRocket, which has a new and interesting approach to presentation creation, sharing and management. So why is VMware taking such an interest in collaborative applications which are so far removed from its traditional business?
Well, as successful as the company has been in its flagship virtualisation business (for the year ending 31st December 2010, its revenues were $2.86 billion—up an impressive 41% on the previous year), the company sensibly feels the need to plan ahead and identify new market opportunities which will enable it to continue its rate of growth and be seen as a trailblazer in the cloud. It is betting on two areas to enable this—targeting developer middleware (which is where another of its recent acquisitions— Springsource, which it paid $362m for in 2009—comes in), and “end-user applications” by which it means both desktop virtualisation tools such as VMware ThinApp, and collaboration tools such as Zimbra and Socialcast. While VMware is not the first to see the attraction of the collaboration software market—a long line of large vendors have announced plays in this area in the last couple of years, including Cisco, Novell, Salesforce.com, Oracle and TIBCO—its approach is perhaps less immediately obvious; rather than coming to market with a big, social collaboration positioning, VMware is slowly and carefully working out its strategy, through a combination of acquisition and in-house development. As an example of this, Soltero outlined two projects that are currently underway at VMware and are designed to knit together and strengthen its emerging end-user applications play:
- Socialcast Strides—announced in September and currently in beta release, this is a lightweight work management application built on the Socialcast platform.
- Project Octopus—an as yet unreleased cloud-based file sharing service which leverages the Zimbra platform (but is not dependent on the organisation using Zimbra for mail).
Even at this relatively early stage in its move into this new market area, VMware is clear that it wants its end-user applications to be able to stand alone in the market— avoiding them requiring customers to have the underlying VMware stack in order to work—but at the same time, it also needs to have an integrated suite story which allows all the different components to work together seamlessly and logically if an organisation wants to implement the entire portfolio.
Right now, I’m open-minded to the possibility of VMware succeeding in its ambitions for this market—after all, while there are some that have struggled in the switch from an IT-focused sell to the business-focused sell needed for collaboration (such as Oracle and Cisco, for example), others have been surprisingly successful (such as TIBCO with Tibbr). However, it is clear that VMware still has a lot of work to do—(1) to flesh out its strategy here and fill in the gaps, either through further acquisitions or development, (2) to work out how it is going to brand Socialcast and its other new applications to take advantage of a brand which only currently has relevance to IT people rather than end-users (i.e. VMware), and (3) to retrain or hire a new sales force that is able to take this proposition to the business leaders who own the budget and purchasing decisions for social collaboration.
So not a small task, then.
Do you think this is a good move for VMware? I’d be interested in your thoughts.