vPivot

A few months ago I was enjoying fine food and drink with friends when I uttered something I immediately regretted: “I do not feel Microsoft is any longer relevant in the enterprise.”

There are a couple of things that later made me rue my statement.  First, any IT company with revenues measured in tens of billions is relevant everywhere in IT.  Even Apple should be considered a threat to companies selling to the enterprise.  Second, Microsoft is ubiquitous.  Like them or not, they still own the most popular enterprise operating system by far as well as the Microsoft Office cash cow.

The spirit of my poorly worded comment is that we are not seeing today from Microsoft the enterprise computing leadership they showed during the 1990s.  I have seen this depicted in a graph of their share price, whose shape is attributed to a change of leadership.

Consider the applications that drive so much of EMC and VMware’s business today.  Microsoft introduced this steady stream of good-to-great OSes and applications that are now deployed in huge volumes:

• 1989: Microsoft Office released.  I believe that Office is the best product Microsoft makes today.  I love it.
• 1993: Windows NT released.  Remember how ridiculous of an idea it was to consider replacing UNIX with Windows?  Who’s laughing now?
• 1993: SQL Server released on Windows NT.  People may view Oracle as the 800 lb gorilla in the database space. But, by instance, SQL Server is more widely deployed.  We still see many, many more SQL Server VMs than Oracle.
• 1996: Terminal Services first released with Windows NT 4.0.  Terminal Services (and XenApp, Citrix’s extension to it) was the most common application in VMware virtual machines a few years ago.
• 1996: Exchange Server released.  Exchange remains the undisputed leader in enterprise mail.
• 2002: .NET launched.  With my UNIX-focused education as a software developer, in 2002 I laughed at the idea of using a Microsoft framework.  In 2005 I was writing applications on it.

I think these few softwares show some of the innovation and staying power of Microsoft in the enterprise.  Making sure each of these worked on VMware consumed years of my professional life.  Microsoft’s problem is not that they do do not have great products out.  Its problem is that they have not introduced “the next great thing” in the software space.  Xbox seems to be a mighty product.  But it does not look like their current projects will one day obtain deployment rates of Office, for example.

So, what will Microsoft 2.0 look like? It could be based in Palo Alto. Think about the components of Microsoft software stack I listed above: operating system, database, virtual desktops, messaging, development frameworks.  Now look at what VMware has done recently:

• 2001: VMware releases the first version of ESX Server.  Measured by installations on bare metal, ESX is already the second most popular operating system in the x86 market.  Will it some day replace Windows as number one?
• 2006: VMware releases VDM, the product that will become View.  VDI (both VMware’s View and Citrix’s XenDesktop) are clearly eroding the “virtual desktop” dominance of terminal services.
• 2009: VMware acquires Spring to bring to market its own development framework.
• 2010: VMware acquires Zimbra, for its enterprise messaging capabilities.
• 2011: VMware acquires Slide Rocket, a potential SaaS replacement to part of the Microsoft Office suite I love so much.
• 2011: VMware releases vFabric Data Director.  Like Microsoft SQL Server, vFDD is derived from the code of someone else’s database.

It is clear that VMware followed since 2011 the path Microsoft laid out in the 1990s.  In some ways this makes VMware look like it is copying the Redmond giant.  But VMware would argue that each of its offerings are vast improvements on those from Microsoft: ESX improves upon Windows, View upon Terminal Services, Spring upon .NET, etc.  Whether the industry commits to VMware the way it did to Microsoft in the 90s is yet to be seen.

Anyone want to place some bets on what the next Microsoft will look like?