VMware Turns Middleware Market on Its Ear with SpringSource Acquisition
| Aug 12, 2009 | Application Infrastructure
| Competitive Intelligence Report
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Analyst: Michael Meehan
Current Perspective: Very Positive
Vendor Importance: High
Market Impact: Very High
Event Summary
August 10, 2009 — VMware has announced a definitive agreement to acquire privately held SpringSource, for $420 million. VMware and SpringSource plan to deliver compelling new solutions that enable companies to build, run and manage applications within both internal and external cloud architectures more efficiently.
Analytical Summary
• Current Perspective: Very positive on VMware’s acquisition of SpringSource, because it is diving into the application infrastructure market by absorbing one of the top up-and-coming vendors in the space. SpringSource boasts its flagship Spring application development framework, leadership on the open source Apache Tomcat application server project and cutting edge usage of OSGi in application development. With VMware’s corporate backing SpringSource should be able to grow exponentially in the coming years.
• Vendor Importance: High to VMware because it now can expand the focus of its virtualization technology to the application arena. Middleware vendors, most notably Oracle and Microsoft, have been encroaching into the virtualization arena in recent years, positioning themselves to be the lords of a brave, new world in which much of a user’s application infrastructure is virtualized, and now VMware is poised to join, if not outright usurp them.
• Market Impact: Very high on the middleware, software and services market because VMware puts a robust corporate infrastructure behind SpringSource technology. SpringSource now has connections inside major corporate accounts, a large international sales force and the opportunity to build out a cloud-based Platform-as-a-Service business with the current undisputed leader of the virtualization market. In fact during the next few years, VMware could change the primary focus of the middle market from application integration to getting distributed applications to work with on-demand computing infrastructure.
CLIENTS ONLY
Current Perspective
Competitive Positives and Concerns
Recommended Vendor Actions
| Client access - Full report in Application Infrastructure | More information
Recommended Competitor Actions
• Oracle must boil down its three current Xen hypervisors (its in-house model and the two acquired from Virtual Iron and Sun) into a single offering so that it can compete directly against VMware. Oracle also should emphasize breadth of its middleware portfolio as it rolls out its planned virtual appliance machine in order to lessen the market advantage VMware holds on the virtualization end of the equation.
• Red Hat must accelerate its move into virtualization, which right now is mostly a statement of intent. Red Hat’s open source JBoss application infrastructure portfolio has a larger market presence than SpringSource, but VMware could quickly narrow that gap by using its virtualization market dominance as a springboard for its new application infrastructure division. At the very least, Red Hat needs to have a suitable virtualization solution on hand when application development shops begin to ask about that subject.
• Given that this acquisition puts immensely popular Java development tools in the hands of the market-leading hypervisor vendor, Microsoft must recognize that it stands to farther marginalize .NET programming techniques. Microsoft must develop a marketing campaign targeted at how its application development and infrastructure products can function seamlessly alongside Java development and infrastructure. Microsoft simply cannot compete against the sheer magnitude of the Java vendor community and it must focus on co-existence.
• IBM and HP should put VMware’s public statements about a continued commitment to openness to the test by seeking to have vSphere treat Tivoli and OpenView treated as equals to Hyperic. Neither IBM nor HP should allow themselves to be second-class management vendors inside VMware virtual infrastructure.
• Progress Software should look to forge a global alliance with VMware. The two companies have exceptionally complementary product sets, with Progress supplying much of the integration, application visibility and deployment, and complex event processing capabilities VMware-SpringSource lack.
Recommended Competitor Actions
• Users should consider SpringSource as a first-tier candidate for Java development projects. It already had a compelling portfolio and it now can offer the assurance of being backed by VMware as a corporate entity. The technology has found a stable home and users do not need to fear that their support contracts are the least bit tenuous.
• Customers of SpringSource’s proprietary Java development rivals, notably IBM and Oracle, should use this event as leverage to seek better deals from their existing vendors. The last thing IBM and Oracle want is to see customers en masse migrating applications to SpringSource tc Server runtimes now that it has the added benefit of being within the VMware fold, and they should be willing to negotiate lower prices to prevent it from happening.
• IT shops should develop new application management roadmaps. The way applications are built has changed dramatically during the past decade and virtualization technology will be an increasingly important component of how operations staff manages those applications during runtime, particularly in terms of automating scale and failover.
CLIENTS ONLY
Current Perspective
Competitive Positives and Concerns
Recommended Vendor Actions
| Client access - Full report in Application Infrastructure | More information
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