The cloud rains on VMware's parade

The cloud rains on VMware's parade
Credit: iStockphoto/Thinkstock

The numbers aren't good for VMware and other companies that profited from old-school data centers. Could this be the beginning of the end?


We’ve seen the recent headlines regarding job cuts at VMware. As John Ribeiro reports, “The company has been facing challenges in its software business as its customers are increasingly using public cloud providers like Amazon Web Services and Microsoft Azure.”

It’s not only VMware. All technology companies that rely on revenue from traditional data center, as VMware does, are failing to see the growth they used to.

Most of us in the know have seen this day coming, but weren't sure when it would be here. It may be here now.  

Don’t cry for VMware and other enterprise software players -- their businesses will remain cash cows for years to come. Moreover, VMware has been involved with the cloud, and perhaps it will come up with a hit product or service. (Not likely -- big companies don’t seem to innovate well.)

Bottom line: Enterprises want to get out the data center business. Verizon Communications has started a process to sell its data center assets, hoping to fetch more than $2.5 billion. Other large enterprises may not be selling, but they aren't expanding their on-premises systems either. Instead, they are attempting to move as many workloads in the public cloud as they can.

Could this be the beginning of the end? It never goes how we think it will, and I suspect VMware has some good quarters left. That said, the the use of cloud computing will slowing and surely change the way we consume applications and build infrastructure.

From CIO: 8 Free Online Courses to Grow Your Tech Skills
View Comments
Join the discussion
Be the first to comment on this article. Our Commenting Policies