In our view the acquisition highlights the vulnerability VMware has in its exposure to Microsoft. We estimate north of 80 percent (may be as high as 90 percent, with the rest being Linux) of VMware virtual machines are running Windows server and an application developed in Microsoft's .NET environment. This is a key strategic vulnerability as Microsoft has a history of absorbing functionality such as VMW that is essentially a layer in the Microsoft stack. Ultimately SpringSource technology may enable VMW to add enterprise Java workloads to diversify away from Windows.
Microsoft is clearly going after VMware with Hyper-V inside of Windows Server 2008 R2:
We've got a great solution. It's a sixth the cost on average of what we see in the marketplace. Evangelizing the tax that VMware is getting from the product is something we look forward to competing with in this environment. Again, it's about getting specific. It is about getting aggressive, and that's where we're headed.
In an effort to guard against Microsoft marginalizing VMware's core virtualization business, the SpringSource acquisition puts VMware at odds with Java runtime vendors who collectively represent the approximately 50 percent of the enterprise market not associated with .Net. I don't see how SpringSource helps VMware versus Microsoft in the estimated 80 percent of VMware environments where the application has been developed on .Net, as Pritchard suggests. If the application is .Net based, and the hypervisor is running on top of a Windows host, then this is Microsoft's customer to lose or win back from VMware. VMware is clearly looking past its current deployments, where Windows and .Net dominate, to a new Java-based cloud and PaaS environment. But we already covered that aspect and the competitive hurdles in the cloud/PaaS portion of this post.
It's not just Microsoft that is marginalizing the value of a hypervisor. As mentioned above, IBM WebSphere CloudBurst Appliance and WebSphere Virtual Enterprise treat the hypervisor as an infrastructure component of equivalent value to the host operating systems. Said differently, the hypervisor, like the operating system, has little impact on the application performance, reliability, availability, or TCO. Those application characteristics are enabled through the runtime application server and the dynamic provisioning and management framework around the application server. This is how IBM's cloud solution is designed. I'll wager that Oracle's and Red Hat's offerings will push value up the stack, beyond the hypervisor layer itself.