Newsmaker: Greene trumpets a virtual future

PALO ALTO, Calif.--For years, VMware President Diane Greene led a company in an obscure part of the industry called virtualization. But all of the sudden, virtualization is a hot subject, and she no longer has the market to herself.

But as Microsoft's virtualization strategy and its open-source competitor called Xen both mature, VMware, an EMC subsidiary, is responding. At its second user conference, held this week, the company announced new versions of its core products--ESX Server 3 and VirtualCenter 2--that show the company focus moving from making a single server more efficient to making a large group of them more efficient.

Another change at VMware is an effort to make its interfaces into standards that its rivals can use--potentially simplifying affairs in the software realm but also solidifying VMware's lead.

They charged because they could. No one else was even close.

VMware's software lets an x86 computer be divided into separate "virtual machines," each with its own copy of an operating system. The company started with workstations, enabling programmers to simulate the interaction of several machines or debug new software in a protected environment. But now, most of the company's revenue comes from servers, which can run multiple tasks more efficiently.

Changes are in the offing. "VMware is a premium-priced start-up. They charged because they could. No one else was even close," Jay Bretzmann, director of IBM's high-performance Intel server division, said in a recent interview. He believes that the pricing model is starting to weaken with the arrival of competition but adds, "VMware is the de facto standard, the thing we're shipping today, and our customers are very happy about it."

And the company continues to grow. EMC reported on Wednesday that for the third quarter of 2005, VMware generated $101 million in revenue, a 67 percent increase over the $61 million it generated a year ago.

CNET News.com's Stephen Shankland discussed the changes with Greene at the company's headquarters here.

To start out, why don't you describe what your company does?
VMware produces virtualization software. What that means is we take a physical x86-based system and we provide the multiple isolated, movable partitions that you can run operating systems with their applications in. In terms of what the customer gets, they get a way to drive utilization from, say, 15 percent, on up to 85 percent. They get very cost-effective ways to do disaster recovery, high availability, provisioning--all sorts of system-level services.

Pick a typical customer. What's their life before and after VMware? What changes?
A typical customer has got widely proliferated x86 machines, and depending on the power of the server, they can get a 10-to-1, 4-to-1 reduction in the number of servers they need. Or they can stop that proliferation and contain it better. And beforehand, to

Wherever we can, we let the instructions go directly to the hardware.

bring a new service online you have to go order the machine, install it in the server room, get it network-connected, make sure the power is there--it can be a multi-month process. Post-VMware, all they do is keep pre-built images of different software services like SQL Server, and when someone needs that service, they just find some excess capacity somewhere and deploy it.

So what's the penalty? Why doesn't everybody do this?
Actually, what we were finding is that for people who use it, it's become the default way that they run their x86 workloads.

But not everybody is doing this. Is it fair to say the bulk of the customers at this point are the big guys: pharmaceuticals, oil and gas...
On the desktop, we have millions of customers at this point; on the server, probably 20,000-plus enterprise server customers.

I was talking to one person a little while back who has hundreds of x86 servers. I asked about VMware, and he said it's too expensive. It's cheaper to buy a new Intel server than a VMware server license and he wasn't worried about buying servers that might be underutilized.
That's a customer that only wants to use a product to do server consolidation. They don't want to use any of the other advantages around provisioning, disaster recovery, fault tolerance, load balancing, serviceability. This is exactly the customer we faced from the first launch of the server product almost four years ago. We priced our product actually to be slightly cheaper than buying more servers. That was how we came to our pricing, because that was the only value people initially saw. But when you add up the power savings, the space savings, the hardware costs, and some of the software licenses, you do come out (paying) less. Then when you add in all the other functionality I just listed, the ROI (return on investment) is immediate and large.

So using virtualization to run multiple independent operating systems on the same computer is not new. It's something that Unix servers have been able to do for awhile and that mainframes have been able to do for decades. Why is it that it took so long to arrive on computers using x86 chip on Intel?
Yes, IBM came out with this in the late 1960s, early '70s on the mainframe. People are doing it today for some of the same reasons. When (Intel) came out with the x86 architecture, they put no support for virtualization in it because everybody thought that was something for the mainframes. VMware looked and said CPUs have gotten so fast, memory and disks have gotten so cheap, and there's full distributed networking and file systems, so the time is right

More Newsmakers

[Len Bullard]

Cost Control

She makes exactly the right point: open standards are one leg of the drive to enable customers to control costs. Open source is another leg, so XEN has a role to play and it's developers will do well to work with VMWare on the standards. Many claims are made for wall to wall proprietary software systems, but at the end of the deal, the inability of the customer to control spiraling upgrade costs offset the arguable merits of proprietary wall-to-wall systems.

vmware rocks! and it could even get better

vmware is the best... but there are some areas that still need improvement

multimedia - I have to run skype in it... the virtual sound card argues with the real sound card... and all that stuff inbetween and eventually crashes..

boot from partitions... I am setting up a EVMS system.. I want to mount the logical partitions... even NTFS.. hopefully I can use iSCSI as well.. I want to do snapshots from outside the file system with a differnt physical machine on the network where the storage is located