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VMware has long served as a key partner for enterprises. For roughly two decades, their VM-based technology and management tools served as a solid base to support enterprise applications. Over the past decade, the enterprise applications have shifted in new directions that require VMware to reconsider their strategy. These shifts are key for enterprises as they modernize their systems architectures.

For all the good that VMs (Virtual Machines) bring, there are challenges to VMs too. They are relatively bulky compared with newer architectures that include components like containers, kubernetes and serverless technologies. As applications are modernized and move to a more compartmentalized approach, the need for VMs will trend downward.

CHANGES IN VM-BASED LICENSE DEMAND

In addition, there is a general shift from running enterprise applications locally to SaaS-based alternatives. The combination of these factors reduces the enterprise demand for VM-based architectures.

Facing the potential of sagging demand in their core product, VMware needed to appeal to enterprises in new ways by leveraging their existing relationships and trust. In 2019 alone, VMware continued their acquisition push in two directions that are meaningful for enterprises; application stack and security. Their recent acquisitions of Bitnami, Pivotal, Carbon Black and Avi Networks demonstrate a drive in these two critical directions.

ACQUISITIONS POINT TO A NEW STRATEGY

The acquisitions, along with their recent partnerships with major cloud providers Amazon Web Services, Microsoft Azure and Google Cloud, point to a marked shift in strategy for VMware. By moving up the stack, VMware is able to provide solutions to enterprises in three categories: Cloud support, Application integration and Security.

The acquisitions, and related partnerships, point to a broader strategy for VMware that embraces newer architectures beyond their traditional VM-based solutions. That is not to say that VM-based solutions will be disappearing anytime soon. Enterprises will continue to leverage VMware’s VM-based solutions for some time. The rate of growth in this space should see a deceleration as enterprises start to focus growth with new architectures.

Not to be missed is VMware’s continued interest in security. Security has always been a core area for VMware. However, when considering the new directions into cloud and new application architectures, new security approaches are needed.

INTEGRATION WITH DELL

VMware’s relationship with Dell Technologies provide an interesting aspect to the future. Dell has one of the broadest portfolios of infrastructure technology today. As enterprises consider how they leverage new application architectures that weave an edge-to-cloud approach, both application architecture and infrastructure will come into play. Working with solutions that leverage the breadth of portfolio offers an interesting opportunity for enterprises.

In summary, the road to success is not a smooth one and littered with challenges. On the surface, it appears that VMware sees the need to evolve in ways that their customers are demanding. VMware has made some interesting shifts in their strategy that could provide fruitful for the company and their customers. Only time will tell if their big bets will pay off for the company and customers alike.

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