All told, it adds up to rough waters ahead for VMware's bread-and-butter desktop virtualization business. And the situation won't get much better anytime soon. A leaked list of new features coming in VMware Workstation 7 shows more incremental improvements but none of the game-changing innovations that helped keep the commodity players at bay. Worse still, the culture of complacency that originated with Workstation is now seeping into other areas of the company's desktop business.
For example, ThinApp, once the darling of the application virtualization space, is now looking a bit long in the tooth. The core product hasn't been updated in nearly a year, and it still doesn't support Windows 7 (both the Setup Capture utility and encoded applications crash hard) or 64-bit applications. By contrast, Microsoft has finally released a 64-bit version of its App-V sequencer, thus beating VMware to market with a solution for virtualizing the upcoming 64-bit version of Office 2010.
To be fair, 64-bit support isn't high on most customer checklists just yet. However, it's the principle that matters. VMware has always positioned itself as the technology pace-setter. For it to now be upstaged by a competitor once considered to be vanquished long ago has to hurt a bit. Playing catch-up may seem like a foreign concept when you're the pioneer, but it's par for the course when you're a market leader in decline.
And that's what I see when I look at VMware: a firm that has lost its confidence, its stride, and its mojo.