While VMware looked like it was in a hole only a couple of years ago, the software giant is now resurgent thanks to a multi-cloud, alliance-building strategy that's resonating in the market, CEO Pat Gelsinger told attendees of the 2017 Best of Breed Conference.
Instead of being displaced by the public cloud, the virtualization leader, under the umbrella of Dell EMC for the last year, has seen six quarters that beat Wall Street expectations, and a surge in its stock price, Gelsinger noted in an onstage discussion with The Channel Company CEO Robert Faletra.
The technological partnerships and shifting product strategies are firing on all cylinders now that VMware is past the "traumatic thing" that was the acquisition of parent EMC by Dell Technologies, he said.
"We're executing, and Dell is executing with and for us," Gelsinger said. Together, the companies are surpassing business goals, including with the channel partners who represented more than 20 percent of business so far this year.
Partnerships with Amazon Web Services, IBM and other cloud giants, and products like NSX network virtualization and vSAN virtualized storage, have made clear to partners VMware is not just part of their past, but also part of their future, he said.
The timing was right, he said, because the IT industry is uniquely primed for growth.
"It's a good market if you're on the right side of the technology transitions," Gelsinger said.
"Tech is breaking out of tech," he added, alluding to the diverse consumer applications to which technology is now being applied.
Four years earlier, VMware's cloud strategy centered on its own Infrastructure-as-a-Service product, vCloud Air. That effort fizzled, prompting the major recalibration.
The cloud deals followed, bolstered by new tools and services designed to enable a hybrid, multi-cloud customer environment.
"While it wasn't the pathway we expected when we started that journey four years ago, I feel every aspect of our cloud strategy is performing well," Gelsinger said.
While many were shocked when the shift started, some important industry players were immediately enthusiastic about its potential.
After a news article reported rumors of an Amazon deal, former Rackspace CEO Taylor Rhodes called Gelsinger, looking to position Rackspace as the first partner for VMware Cloud on AWS.
Other solution providers might still not be comfortable by the prospect of working with vendors like AWS, Gelsinger acknowledged.
"Maybe the marketplace is competitive in some aspects. Figure out how to get over it," he advised them. "'Co-opetition' rules the day," he said.
"Our biggest competitor past, present and future is Microsoft," Gelsinger said, because there's more product overlap with the software giant than anyone else in the industry.
But VMware is also partnering with Microsoft to deliver its Horizon virtual desktop platform on Azure as a service.
"Even with Microsoft we're doing more cooperation," he said. And "almost everyone else winds up being a partner."
NSX runs on Cisco; Red Hat Enterprise Linux mostly runs on VMware's virtual machines, he noted.
And VMware will continue with that approach. Gelsinger told BoB attendees, "if you need us to partner with anybody, we will." That includes competitors, he added.
With its partnerships and new portfolio elements in place, VMware sees several emerging areas for growth.
Edge computing and Internet of Things are decentralizing compute and data storage, a positive trend for the company.
"I think some of you definitely are going to make great practices in IoT," Gelsinger told BoB attendees.
Networking will become increasingly important, and the NSX virtual networking solution will be VMware's top priority in the coming decade. VMware will add more capabilities, and conduct more acquisitions to bulk up the technology initially obtained through its acquisition of Nicira.
And containers are far from a threat, as many prognosticated, he added.
"Ultimately, the VM is the best way to deliver a container," Gelsinger said. Virtual machines solve infrastructure and security management problems; containers solve application lifecycle management problems.
"Our strategy is to bring these two things together," he said.
That's happening with PKS, a managed Kubernetes service created in partnership with Google and Pivotal.
VMware will also continue to "bake in more security capabilities," like disk encryption for the vSAN storage offering, network segmentation through NSX and multi-factor authentication in AirWatch, a mobility management platform.
And AppDefense, "probably the coolest new technology we've done for a while," delivers an entirely unprecedented layer of protection at the hypervisor layer.
With AppDefense, "now the VM itself says this is good behavior, and the moment I do something different than good, take action," Gelsinger said.
Gelsinger told BoB attendees partners are critical to all those efforts.
"We want to do a whole lot more with all you partners in the room. You are our face to our customers," he said.
That was a powerful message for Brian Young, director of sales at Trivalent Group, a VMware managed solutions partner based in Grand Rapids, MI.
"As far as strategy and where they're going with the company, it's very encouraging to the channel," Young told CRN.
By opening itself up to partnerships with other cloud provider, asking for help in innovating cloud solutions, VMware is creating another channel opportunity, Young said.
The portfolio growth beyond vSphere is particularly encouraging, because it makes clear "you can continue to build a successful practice in the channel today around VMware and their technologies."
While there was a big question mark around the company when Dell first announced its acquisition of EMC, it's clear now VMware hasn't changed in the way that matter to partners.
"It seems to be the VMware we've grown to know, acting independently, opening doors across the channel and to other partners," Young said.