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7/25/2010
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Bob Evans
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Global CIO: VMware CEO On Future Of Virtualization: Exclusive Interview

Paul Maritz explains how CIOs can create one giant computer to go beyond CapEx to OpEx reductions and fund new high-value applications.

(Part 1 of a 2-part series on VMware's compelling new strategy.

VMware CEO Paul Maritz's eyes sparkle every time he mentions the "one giant computer" he intends to create out of each customer's messy agglomeration of decades' worth of IT sprawl. But his sparkle is that of a confident innovator rather than that of a delusional dreamer.

Over the past several years, VMware has become one of the industry's most-influential as well as fast-growing companies by pioneering virtualization and creating a brand almost synonymous with one of the dominant IT themes of the decade.

But as VMware has blown past an annual run rate of $2 billion, it has also moved into a no-man's land where either standing still or moving into new categories is fraught with enormous risk.

By standing pat, VMware could become a whale in a pond with rapidly diminishing sources of food; or, by striking out into adjacent and higher-level markets, VMware could face pitched battles against companies 10 or 20 or even 50 times its size.

So VMware has decided to escalate its virtualization strategy far beyond the world of IT infrastructure and into the areas of application and user-device virtualization, while also dramatically fortifying its capabilities in end-to-end IT management.

But Maritz knows—perhaps better than anyone—that a dynamic whiteboard-based vision for how to weave together that one giant computer isn't quite the same as having achieved it in the marketplace. So in an interview at VMware headquarters last week, Maritz laid out the latest version of his company's three-level strategy for stringing together infrastructure, applications, and end-user devices in a way that lets VMware help customers save not only on CapEx but also on OpEx—and beyond.

"It's a significant evolution—as I said, we go from being a narrower CapEx play to really being an OpEx play to being a 'here's how you do IT' play. It is an ambitious journey and an ambitious agenda, and we can't do it all alone," Maritz said.

"Often I get asked the question, 'Aren't you worried about getting squashed by Microsoft here?' And of course I am worried about it, but I like to say that's good and bad news. The bad news is that pulling this kind of journey off is really hard—there's a lot of hand-waving here in terms of stuff that has to be invented and executed, and there aren't good instances of saying, 'Well, we'll just go copy whatever XYZ did here'—this is genuinely new stuff. The good news is, it's hard--and that means that if you execute well—a big if; underscore the if—then you can stay relevant."

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Ah yes, the ongoing quest for ongoing relevance—not such an easy formula to conjure up in today's jumbled business-technology world of cloud envy and SaaS and mobility and outsourcing and compliance and rapidly shortening business cycles and SOA and security challenges and fluid IT budgets and private clouds and public clouds and hybrid clouds and many other things that go bump in the CIO's night.

Maritz likes to speak of the solution as a journey, one that he says is for neither the faint of heart nor for those unwilling to make what now might appear to be some rather fantastical leaps of imagination or outlook or priorities—or perhaps all three:

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