The Effects of the Economy

By Eric Lundquist  |  Posted 2008-06-02 Print this article Print


With the economy in an uncertain state, do VMware customers want to move faster toward standardization on VMware Infrastructure because they see a cost savings, or do they want to slow down?

It's an interesting trend.

We do see people accelerating their deployment of virtualization because it lets them do more with less. If they can free up IT dollars in their IT budget, that's a good thing. Not only does VMware Infrastructure let them do server consolidation very effectively and very reliably, but they don't need as many people to manage the system because of the management products and the automation products. [They also] get high availability and load balancing, and they really optimize around the power.

Another interesting trend that we are seeing is in emerging countries.

Last quarter, we had 15 emerging countries that had triple-digit growth. When I go to India and China and meet with the customers, these people are in a hurry. They are building and modernizing their countries, and they are skipping all the steps that the modern-day countries went through. ... In the U.S., sometimes people jump right to a virtualized infrastructure, but, for the most part, they go through all these stages I have talked about. ... In these emerging countries, they skip them all and they want to standardize on VMware Infrastructure and they say, "Next!"

Are you moving into countries such as China and India because that's where the market is going, or does VMware want to diversify its own business in times of a recession?

We are finding these countries to be very high-growth adopters of VMware's value proposition, and so we are seeing rapid deployment in these countries. We long ago said we were going to be a global company.

VMware and Lenovo ink a virtualization deal. Read more here. 

When we launched VMware Workstation in 1999, we sold it over the Web. From Day One, 50 percent [of sales were] overseas. So we have always ... thought about it as one big world market, and that's because the Internet lets us do that. So it's very natural and just how we grew up. We run engineering all over the world for talent reasons-talent and cost reasons-and we have moved out into all the different global markets as well.

We like [doing business in places like China and India] in that it protects against the economy, but we would be doing it anyway because it's a growth opportunity. It's also very exciting to work with these countries because they are on fire.

Is there any advantage to these companies adopting virtualization first before going through those steps?

The sooner you virtualize, the sooner you save money. It's an immediate ROI. ... In these countries, where they don't have a large, established infrastructure and way of doing things, they don't have to go through any sort of process transition. They just develop the processes around their VMware Infrastructure from almost Day One.

Another trend that we see, to put this in perspective, is that small companies will buy our software and then immediately standardize on it. They move very quickly. ... [It's a much slower process for] large enterprises because they have such large IT groups with such established ways of doing things. There's a lot more education and training that has to go on.

Since 1996, Eric Lundquist has been Editor in Chief of eWEEK, which includes domestic, international and online editions. As eWEEK's EIC, Lundquist oversees a staff of nearly 40 editors, reporters and Labs analysts covering product, services and companies in the high-technology community. He is a frequent speaker at industry gatherings and user events and sits on numerous advisory boards. Eric writes the popular weekly column, 'Up Front,' and he is a confidant of eWEEK's Spencer F. Katt gossip columnist.

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