VMware got off to a slow start in the container market, but recently, the vendor has made moves to improve its standing there. Early returns point to potential but not guaranteed gains as the market continues to take shape.
Enterprise interest in containers is rising. By 2022, more than 75% of global companies will likely run containerized applications in production, a significant increase from less than 30% in 2018, according to a report by Gartner, a global research and advisory firm based in Stamford, Conn.
So, what sparked the growing use?
“Containers provide companies with much needed agility,” said Arun Chandrasekaran, distinguished vice president and analyst at Gartner. These software components divide code into small packages that businesses can mix and match, reducing development time.
Organizations are also investing in the technology. IHS Markit, an information provider based out of London, predicted container software revenue will reach $1.6 billion by 2023, a 30% compound annual growth rate from 2019, according to its Data Center Compute Intelligence Service.
Slow to get on board
VMware took its time getting into containers. Historically, application development teams relied on virtual machines — a market that VMware ruled — as their application foundation. VMware focused its attention there, even as containers emerged as an alternative. As a result, VMware containers’ 6% market share lags far behind leaders such as IBM’s Red Hat at 44% and Docker with 23%.
Arun ChandrasekaranDistinguished vice president, Gartner
Red Hat and Docker are popular for a few reasons: Red Hat has built its business based on providing open source software. It has a hands-on sales strategy, where it consults and trains enterprise developers first, and then it monetizes their work once the enterprise deploys containers in production. Docker also embraced open source initiatives. VMware, on the other hand, hesitated to take on containers — open source or otherwise.
A change in plans
VMware has altered its historical position for pragmatic reasons. Moving forward, some organizations could opt to deploy containers and microservices and eliminate VMs. Others might choose to employ both technologies at once and run containers on VMs. Either way, containers look like the future of application development and management. Rather than be left behind in those markets, VMware has made a series of moves designed to enhance its position and better incorporate container technology.
“VMware built a legacy business based off of customers who work with its infrastructure management solutions, but lacked a strong presence in the developer community,” said Gary Chen, research director of software defined computing at IDC, an IT market intelligence provider based out of Framingham, Mass.
To improve its reputation, the vendor made a series of acquisitions. VMware acquired Heptio and its open source Kubernetes technology in November 2018.
“The Heptio acquisition was geared as much [toward] gaining the company’s talent as its technology,” Chen said. “The founders were very influential in the Kubernetes community.”
VMware also bought Bitnami, which provides application packaging targeted at container and Kubernetes environments, in May 2019. Additionally, VMware partnered with Pivotal in 2018, which now has 140 companies using its containers, and then purchased it in December 2019.
VMware has a great deal of expertise and a large customer base in the server virtualization and system management markets. Many large companies already rely on VMware to control their networks. Adding VMware container management to its suite of capabilities only makes sense.
Problems for competitors
VMware’s container market competitors face their own challenges. In October 2018, IBM acquired Red Hat for $34 billion. Assimilating a company as large as Red Hat is a massive undertaking.
“To date, IBM has made very few changes to Red Hat’s operations,” Chen said. Instead, it has concentrated on weaving Red Hat technology into IBM products, such as its public cloud line. Moving forward, IBM might take a more hands-on approach to maximizing its investment, and Red Hat, on its own, could lose its luster.
Like VMware, Docker started with a confusing container plan. The company developed Swarm, which was built to manage container software. Swarm gained traction but eventually was usurped by Kubernetes, which became the runaway market leader.
In November 2019, Mirantis acquired the Docker Enterprise platform, which has 750 business customers. Mirantis plans to incorporate the platform into its Kubernetes-as-a-Service product to help organizations manage container applications. Mirantis also plans to support companies using Swarm for two more years. However, despite advocating for open source, Mirantis has lagged behind in providing it.
“Throughout its history, Mirantis has been closely aligned with OpenStack; containers are much different,” Chandrasekaran said. Like VMware, Mirantis must pivot quickly as container technology gains traction.
Given the container market’s fledgling state, VMware still has a chance to emerge as a key supplier in the coming years.
“VMware got a late start with containers, but they have been pivoting hard and outlined a vision that should appeal to their customer base,” Chandrasekaran said. “What they need to do now is execute on that vision.”