Problems

VMware, Inc.Case StudyPresentation By:Bradley Atherton, Leslie Lainez, Mark Balingit, Roy Sanchez, Tony Vuong, Kyle Schuler

11BackgroundFirst to the market to provide a virtualization solution for x86 based format and dominated the marketFounded By:Edourad BugnionScott DevineDiane GreeneMendel RosenblumEdward Wang

2According to an article in The New York Times from 2009, only 15% of servers have been virtualized and should at the least double by 20142VirtualizationSeparates the physical hardware resources of a computer from its OS and software resources.Significantly improved flexibility by improving AvailabilityDisaster recoveryServiceabilityTesting & developmentStagingProvisioning Security

3A virtual machine provided each user with the illusion of having an entire computer, but one that is their private machine, isolated from other users, all on a single machine.

3Virtualization Architecture

Hosted virtual machineHypervisorVirtualization software is installed on top of existing (Host) OS like an applicationA guest OS is installed on top of the Virtualization softwareApplications are then installed on top of the guest OS

Virtualization software (Hypervisor) is installed on directly onto bare metal hardwareEach VM resides on top of the Hypervisor layer4Key FeaturesPartitioningPartitioning hardware resources (allowing server consolidation)Isolationincreases securityImproved productivity of software testingEncapsulationIncrease mobility/ transportIncreased software compatibilityDecreased likelihood of downtime

5What are the drawback to virtualization?6

Performance penalty. Reduce performance 20% to 40% in a hosted machine.

What is Vmwares solution?What is Hypervisor architecture?Virtual Machine ManagerWith hypervisor architecture it only reduces performance by 10%.

Performance penaltyHow much does it effect? Reduce performance 10% in hypervisor architecture. Cut performance 20% to 40% in a hosted architectureIncrease system complexity by how?Security risk software layer direct access to hardware.Enterprise Software licensing and pricing. A hypervisor, also called a virtual machine manager, is a program that allows multiple operating systems to share a single hardware host. Each operating system appears to have the host's processor, memory, and other resources all to itself. However, the hypervisor is actually controlling the host processor and resources, allocating what is needed to each operating system in turn and making sure that the guest operating systems (called virtual machines) cannot disrupt each other.

6What do critics say about virtualization?Increase complexityIncrease security riskWhy?7

Because software has direct access to hardware.Vmware argues that virtualization simplifies through isolating application interfaces.What do virtualization do to price and licensing?Enterprise Pricing & Licensing.Increase cost because some vendors charge more if you use more processors.CPU core (processor per unit) vs. single instance

8Vmware answer is to encourage vendors to adjust their pricing and licensing on virtual machine environment and use instance pricing.

How does VMware take advantage of the business environment? (2000 2003)9

After the dot-com crash companies seek to reduce IT budget by consolidating servers.VMware ESX Server helps consolidate servers demand went up help increase revenue.VMware price ESX server near the price of a physical server rather than an operating system.Server capacity continue to expand and improve.During the dot-com crash companies seek to reduce IT budget by consolidating servers.VMware ESX Server helps consolidate servers demand went up help increase revenue.Server capacity continue to expand and improve.VMware price ESX server near the price of a physical server rather than an operating system.

9What is the biggest problem facing VMware?Competition from other software vendors such as operating system makers.10

Vista Server, Windows 2008 virtualization technology embedded in the operating system. Linux Xen virtualization included10CompetitorsMajor CompetitorsMicrosoftCitrix

Other Competitors OracleParallelRed Hat

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PROPOSED SOLUTIONSDevelop in-house applications optimized for VM WareBuild a stronger business around service and supportFocus solely on being a proprietary platform provideGive portions of the platform away for free (Foot in the door)Provide superior service and Support12-Ask question about advantages and drawback to each proposed solution12Develop in-house applicationsAcquisitions of different companies that bring their own specialization to the VMware platform. SpringSourceTungsten GraphicsZimbraAkimbi Systems B-Hive networkShavlik Technologies

13SpringSource pringSource, a leader in enterprise and web application development and management, in 2009

Zimbra an open-source collaboration software tool13Service & SupportVMwares revenue comes from service such as maintenance, upgrades, and training.Education services, Certification, and ConsultingTechnical Account Manager Program (TAMs)14According to Gartner Inc. 30% of VMwares revenue comes from service such as maintenance, upgrades, and training

VMware manager is loosely integrated into the customers company and provides advising and technical help, to deploy solutions faster. One day/week to fulltime14Service and Support30% of revenue from service and support in 2008, percent is now around 50/50 licensing/service

Maintenance, upgrades, professional services and training

License revenue 2011 - $1.84 billionService revenue 2011 - $1.93 billion15PartnershipsDeveloped strong partnerships with leaders of networking processing industries Intel and Cisco.Partnered with over four thousand individual companies which a majority of sales are derived from.

16Cisco & Intel (both of which are major stalk holders and hold seat on the board of directors)16Partnerships

17Foot in the doorVMware provided VMware Server for free in early 2006 beating Microsoft's release by 2 months.This allowed companies to test out the product before purchasing a full featured version such as VMware ESX18Vmwares action is believed to cause Microsoft to Virtual server R2 for free18Why is VMwares virtual machine better? 19

2007 Market ShareBecause it has more features than any other vendors.Present it as why there strategies worked in the present19GlobalizationVMware is a global company with around 50% of revenues coming from different countries

2008 U.S revenue $988 million2008 International revenue $893 million2011 U.S. revenue $1.82 billion2011 International revenue $1.94 billion20Founders21Scott DevinePrinciple engineerCurrently still with VMware22Edouard BugnionLeft 2004Became co-founder of Nuova systems as CTO (later acquired by Cisco)Part of their server access and virtualization tech group 23

Same year EMC acquired Vmware

23Diane GreeneRemoved by force July 2008 (replaced by Microsoft veteran CEO Paul Martiz)Invested in Nicira became a board member of NimbulaPart of the Board of Directors of Google since January 2012

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Nicira, a startup company which focuses on the virtualization of networks rather than physical servers

Nimbula, a company that provides similar services to that of Amazons EC2.24Mendel RosenblumFather of VMwares vision Left two months after his wife Greene Currently a professor of Computer Science at Stanford.25

Edward WangLeft VMware 2009Principal engineer of VMwares technology staff that was in charge of design and implementation of various portions of their main product26Server Virtualization Ratio

27Market Segmentation

2828Survey says ?How many companies plan to change virtualization platform38%Cost as the biggest factor58.9%Features as the biggest factor47.4%licensing models46.8% increased maturity of competitors41.6% 29Desktop Virtualization30vSphere5ProsCons200 + new featuresEnsure edge over competitorsMore management capabilitiesCloud Foundry Easier for developers to build, test, deploy and scale any applications

Change in licensingCharged based on CPU coreLimit on vRAMManagement add-on software price based on amount of virtual machine rather than physical hardware

3132Any Questions?Bibliography"Acquisitions."VMware Company and Technology. Web. 16 Apr. 2012. ."Become a VMware Partner." : Virtualization Solutions and Programs. Web. 22 Apr. 2012. ."Big Vendors Look to Challenge VMware with Open Source." Computerworld. Web. 22 Apr. 2012. .Bullard, W., Raj, N., Vaidyanathan, S., Yoffie D. VMware, Inc. (A). Harvard Business School. 24 Sept. 2007.12 Feb. 2012. Marshall, David. "VMware 2011: The Good, the Bad, and the Cloudy."InfoWorld. 21 Dec. 2011. Web. 16 Apr. 2012. .Marshall, David. "Where Are VMware's 'virtualization Fab Five' Now?"InfoWorld. 06 July 2010. Web. 16 Apr. 2012. ."VMware Inc. (VMW)." Stock:. Web. 22 Apr. 2012. ."VMware vs. Microsoft vs. Citrix." Network World. Web. 22 Apr. 2012. ."V-Index."V-index: Quarterly Updates on Virtualization Industry. Web. 16 Apr. 2012. .

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