Saturday, December 23, 2006

VMware - a classic startup story

One of the new-age companies that has really changed the way businesses operate is VMware. Like Google, VMware was started by researchers from Stanford and has been as influential a company as Google, although much less written about or hyped as its illustrious sibling. In this post and the next, I'm going to talk about why VMware is such an important company and why their technology is comparable to rocket science.

VMware - the Business case
The fact that 99 of the Fortune 100 companies are VMware customers says a lot about the value its products offer. By virtualizing servers and provisioning new VMs on demand, businesses are able to more effectively use their resources - both capital and hardware. Interestingly enough, VMs are not a new concept and have been supported in some form or the other in high-end servers for at least a couple of decades. By recognizing that VMs could offer significant advantages on lower-end systems and bringing the technology to OSes like Windows and Linux, VMware has built a very solid business.

How does server virtualization and on-demand provisioning help improve resource utilization? If you were a large company (5,000+ employees) and wanted to setup a new exchange server that could be used for the next 3 years, you've two choices -
  1. Choice 1 - Buy yourself hardware that can handle the peak load you expect to handle 3 years from now. The math gets tricky because peak load has to factor in the growth of the company in these 3 years. Underestimate the growth and you'll have to buy yourself more hardware later on. Overestimate the growth and you'll end up buying a very powerful server whose utilization is low.
  2. Choice 2 - Overestimate the growth and buy yourself the fanciest hardware you can afford, but use VMware to run multiple VMs on it. Use one VM to handle your current exchange load and the other VMs to run other applications. As your company grows, you can either increase the resources allocated to the Exchange VM to handle the extra load or provision new VMs to handle the newer users. This approach maximizes the utilization of your hardware and capital. You also have the added advantage of reverting to a "Gold image" of the server, should one get infected or hijacked by malicious viruses or hackers.
Another great use of VMs is for testing applications. It is a given that all the Fortune 100 companies have large IT organizations that develop and/or deploy many applications. Before VMware, application testing often required dedicated test servers that had similar hardware specs as the one on which it would be ultimately deployed. Buying multiple test servers and imaging them with the correct OS and configuration was a time consuming operation. With VMware, the preferred approach is to buy a big "monster" hardware which can be virtualized into multiple test servers. Though hardware cost savings are only minor, the speed at which new VMs can be provisioned and torn-down has greatly streamlined many a software QA operation. With this approach, you can have a smaller IT workforce as supporting VMs is easier than supporting real hardware.

Many Enterprise software products require considerable resources and expertise to install and configure. Due to this reason, it becomes difficult to ship an evaluation copy of the software that potential customers can use for pilots. VMware helps companies circumvent this problem by allowing them to quickly provision new VMs that are pre-configured with the software. We use such an approach for Solidcore's S3 Control product. You'll have to request us for a login - Once you login into our Demo center, our infrastructure starts a pre-configured VM that you can use to evaluate our software.

The above examples are representative of how VMs help companies streamline their operations. Finding ways to improve productivity has been the cornerstone of free-market economies and VMware has found a very unique way of doing this and have executed their idea to perfection. The only slightly disappointing fact is that VMware let themselves be acquired by EMC for what now seems to be paltry $635 million. However, getting such a high valuation in a short 5 years makes VMware a classic startup story - making an exsiting idea (of VMs) cheaper, faster and more easily accessible.

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