VMware President and Founder Diane Greene discussed parent company EMC, Xen, Microsoft, file formats, solutions and new opportunities for VMware partners in an interview with CRN Senior Writer Paula Rooney at VMworld 2005 in Las Vegas. Before launching the virtualization software company in 1998, Greene held technical leadership positions at Silicon Graphics, Tandem and Sybase, and she served as CEO of VXtreme, which Microsoft acquired.
CRN: VMware broke the $100 million revenue mark in the third quarter. How is your relationship with parent company EMC, and what did you expect would happen after it acquired VMware?
GREENE: [Third-quarter revenue was] $101 million. We are a separate subsidiary. It’s been two years, and it has not changed. It’s a lot busier than we were before because we’re a lot bigger. I did not ever let myself have any expectations because it didn’t seem appropriate. We agreed to sell the company. I worked with [EMC CEO] Joe [Tucci], and we just thrived. And you wouldn’t know we’re a subsidiary.
CRN: Has EMC provided VMware with additional resources?
GREENE: Overseas, we were able to grow more quickly because of office space availability. But we’re independent of marketing.
CRN: Partners were concerned when the acquisition deal was announced.
GREENE: A year ago, partners were really worried about that. But that has quieted down.
CRN: How many VMware employees are there now? I have heard of Citrix Systems people migrating here. What’s the synergy? Do you see VMware and Citrix as competitors?
GREENE: Roughly 1,500 employees, and it’s a constant process of sharing responsibility and hiring great people. We just announced a partnership with IBM and Citrix, so we’re quire complementary to Citrix. We’ve partnered with people who put [Citrix] MetaFrame in ESX virtual machines to help with scalability on the server side. We’ve worked a lot with Citrix and are both in the area of system infrastructure software.
CRN: VMware made its fortune on server consolidation. What’s the focus on desktop?
GREENE: Enterprise Hosted Desktop is a big thing. People have security and manageability problems on the desktop. Our ACE product is getting phenomenal attention, and no connectivity. We made this announcement with IBM and Citrix, but there has been a hosted desktop for years using ESX server. We gave examples of Bell Canada and [others] hosting Windows XP for their remote call centers and remote developers, and [we are] putting three products together in a solution in an integrated way for customers with IBM. IBM is very serious about the hosted desktop market. ACE addresses security on desktop, manageability on the desktop and mobility on desktop. When run in a hosted desktop, you have to have connectivity. For the IBM solution, that’s just ESX server.
CRN: Are there new features in ESX 3 specifically to better enable the hosted desktop?
GREENE: Distributed Resource Scheduling and Distributed Availability Services.
CRN: But those are tied to VirtualCenter 2 …
GREENE: It’s a combination of both. We just released a unified interface for both.
CRN: Will ESX and VirtualCenter become integrated into one product over the long term?
GREENE: No, there’s a play for both products. We just want nice integration among the two, but we’ll have open interfaces and SDKs.
CRN: What are your thoughts about the competition posed by Xen open-source virtualization?
GREENE: Today, it’s an open-source project, not a product. It’s interesting. It moves the Linux market into virtualization, which is a help to us. We’ve had Linux support forever. The Linux world now sees value to virtualization as a result of Xen. It’s a great thing. So we’re also doing our own. We work with the open-source community, Red Hat and SUSE, and will find ways to work with these guys.
CRN: IBM and Hewlett-Packard are big VMware partners, but they also have publicly embraced Xen. Doesn’t that pose a conflict for IBM?
GREENE: I think IBM is the master of co-opetition.
CRN: And HP?
GREENE: I do think we have a strong relationship with IBM, HP and Dell–great partnerships–and we’re helping each other.
CRN: VMware announced a community source program in August and is opening up source code to partners [for viewing]. But do you plan to open-source any of your products over time?
GREENE: It’s not the same as GPL [General Public License] at all. Never say never to anything, but I hope we can work on standards so the customer investments can be protected.
CRN: What do you think about Microsoft’s plan to integrate a virtualization hypervisor into the Longhorn Server R2?
GREENE: I don’t know what Microsoft is doing. We hope to work with them on standards so that everything can work together for customers and partners. [Microsoft CEO] Steve Ballmer talks a lot about what customers want. So whatever they do [at Microsoft], I hope it’s good for the customer.
CRN: Why is there conflict between Microsoft and VMware over Microsoft’s proposed Virtual Hard Disk format?
GREENE: Microsoft is licensing it. It is free, but it requires a license. A standard should not require a license. We don’t care what the format is. We just want a standard that doesn’t require a license. We will support standards developed through DMTF and if [there’s a] virtualization working body that forms. The format is how you manipulate and move virtual machines around, so it’s relevant.
CRN: There’s industry buzz that VMware may be looking at acquisitions to stay ahead of the competition. But some say you are averse to M&As and like to build technology from the ground up.
GREENE: That’s really funny. There are so many myths about me. We just announced the acquisition of AOG, which I’m very happy about. I’m quite focused on making customers very happy.
CRN: What do you think of application virtualization, which Softricity has and Citrix plans to offer via a project code-named Tarpon?
GREENE: It’s complementary to us. Softricity is a partner of ours.
CRN: So AOG’s Capacity Planner will be delivered through VMware Professional Services and partners?
GREENE: It is a service offering from [our] professional service organization. We’re the service bureau for it. We compile it [the customer capacity plan] and give it to our VACs [VMware Authorized Consultants], who then take it their customers. This is something we want to build out a lot for partners to help them build virtualization services.
CRN: Will Capacity Planner be built into VMware’s platform?
GREENE: It’s a service. It will work well with VirtualCenter.
CRN: Microsoft said it is piloting a managed desktop service. Would VMware consider offering an enterprise hosted service?
GREENE: We’re not a hosting center. We don’t have applications [to host]. We are the infrastructure to do those things. We have several customers that do it for demos and training, hosting using ESX. But we’re the infrastructure. We’ve got plenty on our plate.
CRN: What is your channel philosophy?
GREENE: It’s an incredible thing. When we put our workstation product version 1.0 up on a site, all of a sudden people were asking if they could resell our product. We started establishing channels from day one. At that point in time, people coming to us knew more about what they needed than we knew. We started investing right away, and it’s gotten a lot more mature over the years. It’s how we compensate our [sales] people, neutrally. We’re meticulous about [avoiding] channel conflict, and we agonize over making thing works well for our partners.
CRN: It’s one thing to resell a product, but selling your virtual infrastructure is pretty complicated stuff. Is there an ample base of partners out there sophisticated enough to do this work?
GREENE: I disagree [that it is complicated]. Actually, it’s not that complex to sell, and there are tremendous opportunities for partners adding value with services. Yes, we have enough partners in the markets we serve today.
CRN: So what are the biggest value-added services opportunities for VMware partners?
GREENE: We see it around solutions, high availability, disaster recovery and lot of service offerings around that. We have solutions that exist today, so you don’t need ESX 3 to provide that. There are plenty ways we support those today with the existing 2.0 [software].
CRN: How are high availability and disaster recovery different?
GREENE: Server containment is typically a project where you consolidate physical footprint to virtual, where someone has to do P-to-V migration and implementation of infrastructure on the server side and storage. There is a lot of drag in storage services. Our partners back up images for customers and do testing at remote data centers for disaster recovery.
CRN: How does virtual infrastructure lend itself to disaster recovery?
GREENE: Today, if customer wants to back up physical servers, they’d need hardware. Because of the portability of the virtual machine, you no longer need more hardware. You have images for disaster recovery and do not have to worry about the underlying architecture and platform. You don’t want a one-to-one ratio.
CRN: What’s your philosophy on storage virtualization?
GREENE: We do some with ESX server, but that’s within an Intel x86 homogenous environment. We think it’s important that we interoperate with storage virtualization out there. It’s a different focus.
CRN: So many people are using the word ‘virtualization.’ Are you concerned that is impacting your marketing message?
GREENE: When we started out, we had big problem because when we used the term ‘virtual machine,’ everyone thought we meant Java. Yes, virtualization is an overused term.
CRN: How will you evolve the platform in the next generation, ESX 3 and VirtualCenter 2, and in the future?
GREENE: We’ll move the platform forward with new hardware support, multicore, 64-bit, four-way SMP and iSCSI.
CRN: During your VMworld keynote, you said VMware is a solutions company. Can you elaborate?
GREENE: We build out this virtualization platform, but there are all kinds of functionality locked in there that’s difficult for end users to exploit. So we’ll build out solutions that do that for customers. They want out-of-the-box solutions, where they push a button and have a disaster recovery platform. We are building that in and making those a full solution that customers can grab and deploy.
CRN: Will these services be offered exclusively?
GREENE: No, we would never do that. We would not do things that aren’t good for partners.
CRN: Where do you see the biggest opportunities that VMware partners are not taking advantage of?
GREENE: We see our value-added resellers taking advantage in all kinds of ways to enhance value of virtual infrastructure. I think the new hosted desktop will offer new opportunities. ACE and certainly ESX 3 will open up a whole new set of value-added opportunities because of Distributed Resource Scheduling, Distributed Availability Services and storage interoperability.
CRN: What small- and midsize-business opportunities are there for VMware?
GREENE: The ease of use around ESX 3. We see huge potential in SMB with our channel. ESX is a departmental solution, edge-of-network and data center. GSX is a hosted solution that is a stepping stone.
CRN: Is there a possibility of two versions of ESX, one priced for SMBs and one for enterprises?
GREENE: No. Actually a large portion of our base is the small-business market and the midmarket.
CRN: With competition from Xen on the horizon, is there any thought about reducing the price of ESX server?
GREENE: No.
