VMforce: Who’s the Biggest Winner?

Much already has been written about this week’s VMforce announcement, so I’ll spare the details of how it all works and what has been promised. Besides, my biggest question isn’t whether the platform will work, but, rather, who’s the biggest winner in this partnership — Salesforce.com or VMware. I’m also interested in who’s the biggest loser, as Microsoft, Oracle, IBM and the entire SaaS-based CRM community all seem to have taken hits.

A Big Winner: Salesforce.com

As I wrote last week, the combination of SaaS and PaaS could prove to be powerful, and Salesforce.com was poised to capitalize on this if it only expanded its Force.com user base. Enter VMforce. Now, Salesforce.com can bring in a new — and much, much larger — developer community to build applications atop Force.com.

Pre-VMforce, Force.com’s main drawback is that it’s uniquely closed, even for a PaaS offering, so its big draw is the Salesforce.com connection. Now, for prospective Force.com customers that didn’t want to write applications in the proprietary Apex language (lest they risk complete and total lock-in), Salesforce.com just got a lot more attractive (there’s still the data issue, however). There’s also the remaining community of Java developers who might just want to mess around with a Java-based PaaS. Once they’re in, the hope is that the hooks into Salesforce.com’s various collaboration, support and SaaS tools will make them want to stay, and maybe even expand into Salesforce.com’s other services.

The Biggest Winner: VMware

I suspect VMforce represents a mere seed from which will sprout a vast PaaS empire. We’ve already seen the way VMware attacked the IaaS market by delivering cloud-enabling software to hosting providers and creating the vCloud ecosystem, and there’s no reason not to undertake the same strategy with PaaS. Partnering with service providers that want to enhance their appeal with cloud capabilities is the perfect model for VMware, because it lets the company become a cloud-computing player without investing one dollar in CAPEX, while at the same time giving the illusion, at least, of openness. If VMware expands its PaaS partnerships beyond Salesforce.com, users will be able to port both VMs and code from on-premise environments into the cloud, and then across a variety of cloud providers’ services. The one piece that makes all this flexibility possible: VMware.

VMware is facing an all-out assault on the virtualization front, and rather than battling simultaneously with Microsoft, Citrix, Oracle and Red Hat, it’s changing the nature of the conflict. Its competitors’ virtualization products might have cost and interoperability advantages that make erosion of VMware’s market-share lead inevitable, but they don’t have vCloud, and they certainly don’t have VMforce. We still have a long way to go before the majority of corporate workloads are running on VMs, so there still are plenty of customers to woo and loads of money to be made. If it were a matter of comparing apples to apples, customers would face a difficult choice, but VMware is trying to show them they can have an entire fruit basket.

The Biggest Loser: Oracle

VMforce is broad strike in that it hits competitors in the virtualization, Java platform and SaaS markets. The problem for Oracle, specifically, is that it plays in all three markets and, notably, it doesn’t have a cloud presence. If cloud computing is the future, why would users choose Oracle for any of these solutions when its competitors give them easy on-ramps to the cloud? Compared with Oracle, Salesforce.com now looks even more appealing as a SaaS option, and VMware looks more appealing as both a virtualization and Java platform option. IBM hasn’t gone anywhere either, and it’s pushing its cloud offerings hard. Even Microsoft enables Java development on Windows Azure, as does Google on App Engine. Oracle said it won’t be pursuing Sun’s cloud ambitions, but it might be time to rethink those plans, at least in terms of a PaaS offering.

Question of the week

Which vendor does VMforce affect the most: Oracle, Microsoft, or someone else?
Relevant analyst in SaaS
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