Since its sizzling IPO over the summer, VMware (VMW) has begun to chill.
The company's stock price has recently pulled back approximately 20 percent from its high, and some analysts are even questioning if VMware can sustain its current valuation.
While VMware's software is the de facto leader of server-side virtualization for the enterprise market – essentially enabling multiple servers to be consolidated into one, which reduces the need to purchase and support new data center resources – the competition seems to be catching on.
Depending on how you define the virtualization market, VMware's competitors include IBM (IBM), Oracle (ORCL), Microsoft (MSFT), Hewlett-Packard (HPQ), and Sun Microsystems (JAVA).
Many of these companies are embracing open-source technology to build virtualization functionality into their respective solutions for a fraction of the cost of VMware. This begins to question the need for VMware altogether, or at the very minimum, neutralizes its pricing model.So, as VMware continues to pursue server-side virtualization (according to industry research firm Gartner only 5 percent of the servers deployed throughout the globe are virtualized), the company needs to explore new market opportunities focusing on the consumer desktop.
This brings me to virtual cloud computing.Considered by some as the next wave of virtualization, virtual cloud computing provides a means to deliver hosted applications and services to an array of devices. Combined with wireless bandwidth that is becoming increasingly faster and ubiquitous, virtual cloud computing will blur the lines between being online and offline.
Imagine having "always on" access to your desktop computing environment and data no matter where you log in from. The key to this new paradigm is the placement of the applications and the respective infrastructure to deliver them in the cloud, hence the name virtual cloud computing. The market opportunities for this technology are vast, enabling telecommunications, cable and wireless service providers to deliver all types of products and solutions.
While there are many cloud computing models, one that offers a compelling approach is stealthy XDS, which over the past five years developed a "universal dialtone" technology that securely links users to applications and content resources, on demand, via any device.I believe VMware is looking closely at virtual cloud computing as it offers a perfect complement to its current technology strategy. But according to a recent note from Canaccord Capital, VMware may be few years away from delivering on this capability.
Should VMware jumpstart its development of their desktop virtualization strategy or acquire technology to accelerate the effort, the company will be well-positioned to expand beyond the enterprise.
Equipping service providers with the tools to deliver virtual cloud computing solutions to the consumer market will not only expand VMware's technology reach and growth opportunities, but also differentiate itself from the competition.
Disclosure: none
