August 18, 2009

What VMware Acquisition of SpringSource Means to Development, Virtualization

Now that virtualization vendor VMware Inc. announced last week that it's acquiring enterprise open source vendor, SpringSource Inc. for $420 million, what's it really mean for both companies and their customers?

For Palo Alto, CA-based VMware, it means adding important components that could eventually allow the company to tie virtualization directly to applications without requiring a separate operating system, according to a a sampling of analysts, while for SpringSource, it brings a larger presence and a wider audience for its open source projects and tools. SpringSource's main project is its Spring Framework, an enterprise Java programming environment. SpringSource is also the key maintainer of the Apache Tomcat Java application server project and leads the Groovy and Grails project, which is a dynamic language and Web application framework. In May, SpringSource acquired Hyperic and its Web application and infrastructure management applications and tools.

Charles King, principal analyst with Hayward, CA-based Pund-IT Inc., said VMware's move to buy SpringSource makes perfect sense when reviewed with VMware's flagship vSphere 4 virtualization operating system in mind.

"I think that VMware is doing this because of vSphere," King said. "In the long run I think VMware sees SpringSource and the popularity of the company as sort of a honey they can spread over the operating system and bring more developers into the vSphere community. Java seems to becoming more and more the platform of choice for software developers. This seems like a natural fit to me."

At first, the move looked like a surprise acquisition, King said, but it made more sense over time. "It sort of came out of nowhere, but in retrospect it’s a logical piece of the cloud infrastructure future that VMware is intent on building."

Another key for the deal, King said, is that it could help VMware "develop open source street credibility... as long as they allow [SpringSource] to keep in the direction they were going."

Gary Chen, an analyst with Framingham, MA-based IDC, called the acquisition a bold one because VMware is "trying to expand beyond just the virtual infrastructure level and the virtual cloud. There are definitely a lot of synergies here."

What's really interesting in the deal, Chen said, is that "it all fits in very well with VMware's culture and history of being innovative and disruptive, of doing new things."

And what the deal gives to VMware is a line of applications and open source projects that could allow VMware to be the first to truly separate virtualization from requiring a parent operating system such as Windows, Unix, or Linux, Chen said. "I think it's a differentiation," he said. "I think potentially what VMware is trying to create with SpringSource are applications" that could run directly under vSphere without an overlaying operating system. "That’s not been done before," he said.

What that would do is allow some features of vSphere to be directly available to the applications, such as automatic scalability, high availability and resource optimization, Chen said. "That doesn't exist today. The application doesn’t know it's on a virtual machine. It thinks it's running on a [physical] server. This would let the applications know they are running on a virtual machine," using Java tools from SpringSource. "That’s definitely what they want to do," Chen said. "I think this acquisition is probably going to be most significant for VMware, in terms of size and what they paid for it and in being a game changer for them. This is certainly the big opening round."

Such moves would put VMware more on par with competitors like Microsoft Corp., which has virtualization products but also has the rest of the stack, including operating systems, middleware, applications and more, Chen said. "I think VMware thought they need to compete more with that kind of integration. [The deal] is everything MS isn't--it's open source and it's Java."

And that kind of realignment, agreed Bill Weinberg, principal analyst with Aptos, CA-based Linux Pundit, is huge in this move by VMware.

"With the acquisition of SpringSource, VMware evolves its cloud offerings portfolio from a focus mostly still in virtual hosting to one closer to the money--application hosting, SaaS, and with Spring and Hyperic, Platform-as-a-Service (PaaS) and management," Weinberg said in an e-mail response.

To better serve its customers and to better defend its turf from competitors like Microsoft and Citrix Systems Inc., VMware must continue "moving upward" with new products and services, he said, "from supporting utility computing to hosting value-added operations. Microsoft is just beginning to help its customers break into this area."

The SpringSource purchase "gives VMware new, developer-centric cache," Weinberg said. "It gives VMware customers new opportunities to deliver value-added applications in the cloud and to cultivate user and developer communities" that they previously weren't able to connect to directly.

Mark Bowker, an analyst with Milford, MA-based Enterprise Strategy Group, said that data center customers gain big potential from the deal long-term if VMware is able to bring together the technologies of the two companies and offer virtualization that does "talk" to applications directly.

"The ultimate goal, and what some people are missing," Bowker said, "is that the Spring platform could direct interact with the hypervisor itself" in the future. That could mean Windows and other operating systems could have to "step aside in the next two to five years and would allow applications to integrate with the hypervisors and applications being able to talk directly to each other," he said. "VMware has even used the term 'data center operating system.' At that point, Microsoft kind of gets kicked to the curb. I think that that’s something."

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