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Virtual Iron on "Virtual Monopoly"

All of the ecosystem partners will continue to help further VMware’s success because it is a symbiotic relationship—right now, everyone is making money. But in so doing, there is a big risk that over time, VMware will marginalize most, if not all, of its ecosystem partners.
VMware is in a position to deliver more and more functionality that will increasingly impact the very ecosystem that is complicit in making it successful. Since VMware today is fundamentally an infrastructure company, it will build concentric circles of capability from that point outward. That is why its proprietary file system is so important—it enables VMware to manage and control data. It gives VMware the keys to the kingdom and they know it. Microsoft never quite got this and still doesn’t today. In the meantime, VMware is in a position to create more software that will impact storage, backup and replication.

Many of the ecosystem partners – the server, storage, backup, data protection and operating system vendors – realize this to some degree. But what can they do? They have to play nice. Especially since they are making a boatload of money. So they go about their business and hedge their bets by supporting Microsoft and Citrix to create a balance of power. Microsoft gets a thumbs up because it’s– well – Microsoft. It doesn’t matter if its product isn’t available and will have major limitations for one, two, or maybe even three years. Citrix is invited to the party because it bought XenSource and even though it doesn’t have a fully functional product, it gets a pass because it is a big company and everyone assumes that it will get there. VMware is fully supportive of this, telling the world that it wants healthy competition. But everyone knows—even though they won’t say it out loud—that VMware wins in this scenario.

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