The talk of CloudWorld this week was VMware's acquisition of SpringSource. The top-of-mind chatter focused on the price: US$400 million plus, a very large sum for a company doing perhaps US$25 million in revenues. Certainly there was a good bit of envy in this type of conversation. And, of course, the fact that SpringSource is an open source company further makes the number even more eye-watering.
However, looking beyond the envy and valuation puzzlement, what is the implication and meaning of the acquisition?
I must say that, to me, it looks brilliant--and it takes a lot for me to make that assessment. Having suffered a few disastrous acquisitions at companies I worked for, and observed at remove many, many more, I've come to view these events pretty skeptically. They're always announced with fanfares and group hugs among the management teams, and 18 months later, after the acquiree's top team has left and the struggle to integrate the products into the acquirer's portfolio seems doomed, everyone shakes their head and wonders "what did company X see in company Y?"
This acquisition seems different to me, and it holds the potential to really give VMware a premier position in marrying enterprises and cloud computing. Here are the reasons:
It provides a complete cloud offering: vSphere can offer a single product that offers both IaaS and PaaS, configurable at the application level; in other words, within a single cloud, some applications could operate in an IaaS environment, while others operate in a PaaS environment. Unlike other cloud offerings, which are single option -- either all applications that run in that cloud have to be based on IaaS or PaaS, the VMware offering can provide the opportunity for applications to assume an IaaS environment or a PaaS environment; moreover, this should be granular and configurable per application. So those applications that require total environment flexibility can use vSphere to provide empty VMs into which a complete stack--OS, middleware, application--can be poured. Those applications that can leverage a Java framework can achieve the higher productivity (and perhaps higher quality) of using a VM which already contains an OS and programming framework. The fact that a single offering can support both IaaS and PaaS, granular at the application level, is a real benefit.
It offers support for *the* enterprise language: Java is the default enterprise language for complex, highly-scalable applications. Offering a Java framework in a cloud environment is going to be very, very attractive to enterprises that want to implement cloud computing and want high developer productivity. I'm a bit dubious about some of the comment on this acquisition that explains the acquisition as following the Microsoft "get developer support and IT will follow" playbook. Commenters who support this analysis point out the fact that VMware's CEO comes from Microsoft, so, supposedly, he's just executing the same game plan he knows.
I think this misses the point. While that strategy may explain Microsoft's success, Java is in no need to gain acceptance at this point. And implementing cloud computing is not going to be driven on an app-by-app basis--it's a higher-level decision and one rooted in operations. The question is more likely going to be: "we've got a ton of Java apps and would like good support for them in our cloud implementation--which is the cloud best suited to support the Java apps we've already got (many of which are built on Spring) and that we'll do in the future? And, by the way, it would be great if that cloud choice also supported non-Java apps as well." From this perspective, the combined vSphere/SpringSource offering will be appealing.
It delivers a great offering for vSphere service providers: A lot of the hosters and outsourcers that are getting into the cloud game will love this offering. They're trying to move into cloud computing, driven by the realization that hosting machines or offering virtual machines is a less-than-desirable strategy in a world that wants the agility and scalability of cloud computing. By the same token, many of these providers, companies like Verizon Business, AT&T, etc., have been wracking their brains about how to compete with the low-cost Amazon offering. Offering a more complete and flexible cloud platform that supports both IaaS and PaaS will give them some competitive ammunition against commodification. Of course, they'll still struggle with the question of how they'll differentiate among themselves when they all offer vSphere, but that's tomorrow's struggle!
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.