Monday, August 17, 2009

VMWare’s acquisition of SpringSource

Last week, VMWare announced that it had entered into an agreement to acquire SpringSource, an open-source enterprise Java vendor. This was a significant development, because SpringSource brings new assets and capabilities beyond virtualization to VMWare (i.e. CloudFoundry).

In VMWare’s press release, the motivation for the acquisition is described as follows: “Together, VMware and SpringSource plan to further innovate and develop integrated Platform as a Service (PaaS) solutions that can be hosted at customer datacenters or at cloud service providers.

I think the acquisition was also influenced by Red Hat’s virtualization strategy, Linux-based virtualization (KVM), its open-source approach to virtualization management (libvirt, oVirt, Thincrust…) and how it’s rallying the open source community around Cloud Computing… Also, Red Hat offers a complete middleware stack (JBoss, MRG), Systems Management solutions (Red Hat Network Satellite, JBoss Operations Network). Acquisition of SpringSource enables VMWare to compete with Red Hat and offer customers an alternative.

Who is SpringSource?

SpringSource created and leads the open source Spring framework. They offer a set of tools + consulting & support to facilitate the enterprise adoption of Spring and related open-source technologies. They are very active in other open-source projects and industry groups (Tomcat, Groovy, Grails, OSGi…)

Here are a few highlights:

Why would VMWare buy SpringSource?

SpringSource brings proven & popular technologies to VMWare that don’t overlap with their existing portfolio. It fills its technology gaps above the infrastructure & OS layers. It enables VMWare to reach new customers.

VMWare is a leader in the infrastructure virtualization space. They engage infrastructure architects and sell to data center managers. They sell from bottom up or at the C-level (i.e. cost reduction, simplification).

VMWare doesn’t speak middleware & application frameworks. Similarly, most middleware architects don’t get virtualization. First, SpringSource should be able to raise awareness about virtualization with their existing customer base (middleware architects & developers). This should open up new opportunities for VMWare fairly quickly… Next, VMWare should be able to bring SpringSource in front of their customers. That will also create new opportunities for both companies.

With CloudFoundry, VMWare is able to offer a choice to customers (private or public). By entering the market early, and early engagements with customers on both VSphere & CloudFoundry, VMWare gets a head start understanding the market requirements which enables them to plan and design more competitive Cloud solutions. That is a big advantage.

What about Red Hat?

Red Hat’s approach is different from VMWare. Their strategy is to provide an open-source virtualization solution based on Linux, and provide a unified management framework to address not just virtual infrastructure, but virtual desktops as well.

One of the advantages for Red Hat is that Linux is the most widely deployed OS in the enterprise. This is powered by their big alliance and partnership programs with mega vendors like IBM & HP. This is in balance with VMWare’s partnership program & distribution model (i.e. embedded hypervisor). However, Red Hat’s challenge remains to generalize its efforts and solutions for all Linux distributions.

Final thoughts

I think this is a market defining acquisition. It gives other Cloud Computing vendors some direction to follow. As we move forward, I think the following trends will get stronger:

  • More lightweight middleware solutions in the Cloud from open source & mega vendors (i.e. IBM, Oracle)
  • More systems management tools in the Cloud from both open source & commercial
  • More middleware & systems management appliances

A recurring question for me is what AWS’s strategy is (or should be) with regards to growth? Should they remain an infrastructure provider and incrementally build out more services (organic growth)? Should they continue to rely on partners for value-add services and distribution channel? Is it time for AWS to consider acquisition for growth? What would you do, if you were running AWS?

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