VMWorld 2007 - Thoughts

11,000 attendees. Incredible "buzz." Huge success for VMware.

Some companies I thought were interesting...

ManageIQ. Former Novadigm (acquired by HP in 2004) execs, bootstrapped (self-funded), product not yet released. This is a complete systems management solution - a framework e.g. Tivoli or BMC. Focusing on virtualized infrastructure. No VC funding yet. No revs. Very limited traffic or buzz at VMWorld.

Innovawave. They have built a driver that accelerates I/O between the hypervisor and the physical I/O devices. Just got the VMware ESX version working - won't be generally available until early 2008. No revs. No customers. Good VCs - Matrix and Silverton (which is Bill Wood formerly of AV). Chris Ostertag (CEO) has a great track record in direct sales but this has to be a channel/distribution model so we'll see if he can do that. Very early days. Lots of interest from VMware folks....maybe they want to acquire them or kill them or both.

Q-Layer. Belgium company. Funded by Partech (whom I know - OK VCs). Trying to boil the ocean - "data center virtualization" is a HUGE set of problems to go solve. I am skeptical. Also, selling to service providers (hosters) which is not a great market in my opinion. I don’t like European-based software companies trying to sell into the US - rarely works. Good amount of traffic/buzz at the show.

TeamQuest. 15 years+ old company, profitable, 57% employee owned, based in Clear Lake, IA (where Buddy Holly died in a plane crash). Showing new product for reporting and Analysis of Virtual Machine performance. Very niche. Have about $25 million in revs from existing products for physical machines - performance reporting and analysis. Good traffic at their booth.

VKernel. 15 people, no revs. Have created a virtual appliance (a packaging mechanism where you combine your app with the VZN bits and it can run directly on VMWare with out installing anything else) that does charge back and capacity analysis/planning. Have had 2,000 downloads in last 30 days (since they released the product) and 100 are actively playing with the product. That is impressive. No VCs yet - bootstrapped. Lots of traffic/buzz.

FastScale. Creates the equivalent of virtual appliances - slimmed down packages that can be run directly on VMware ESX. Claim to fame is they make these very, very small - small disk footprint and memory footprint - by stripping out all the extraneous stuff the application being packaged does not really need to run. 10 beta customers, based in Sunnyvale, 2 VCs (ones I did not recognize). These guys were in the area of the show floor where you can rent a "stand" - a single station to demo your product. So, they were not getting much traffic.

Conclusions. Overall, lots of "features" masquerading as products and/or companies. But that is normal for this stage of a nascent market. VMware ESX 3 is the equivalent of Windows 3.1 (the first version of Windows that really worked well) - meaning it has just reached critical mass and the real big growth is in the future. Also, like the first working version of Windows, VMware ESX needs a lot of tools and other things around it to work better in a production data center environment. That means some of these things above are going to be successful in spite of their short comings or narrow focus. But, eventually, VMware will provide most of these things "in the box." The first "killer app" that uses virtualization as an enabling technology is not out there yet or at least not obvious to me.