VMware & Dell CEOs See Massive NFV Opportunity
LAS VEGAS -- VMworld 2016 -- Michael Dell and VMWare CEO Pat Gelsinger took the stage together Monday and said NFV, and the service provider market in general, will be huge opportunities when Dell takes a controlling interest in VMware.
The two CEOs spoke at a joint press conference to reassure journalists, customers, partners and other stakeholders that the combined companies will be both independent and partners (is that like being dry water? Or light darkness?). And the service provider market will be a big part of future growth, they said.
Historically, VMware Inc. (NYSE: VMW) has been limited to the IT side of the service provider house, Gelsinger said. But when the VMware boss went to Mobile World Congress two years ago, "all of a sudden we were relevant to everything the service provider was doing," he said. And the same is true for Dell-EMC. (See VMware CEO Pat Gelsinger at Mobile World Congress.)
NFV is a significant factor driving VMware and service providers closer. Also, service providers are managing mobile devices through Airwatch, and branching out into cloud for hosting and managed services using VMware infrastructure. "Almost every aspect of our business is relevant to service providers," Gelsinger said.
VMware has a business unit specifically focused on NFV, which uses the principle of the virtual data center -- core to VMware's philosophy -- and applies it to the core network. NFV requires standardized servers, storage, and device management -- all of which are core to Dell's business, Gelsinger said. (See VMware Looks to NFV to Crack SP Market and NFV: Bringing VMware & the Telcos Together .)
Dell agreed. "Every time you hear the words network function virtualization -- NFV -- that means a telco function that can now run on an X86 server. This is a huge opportunity for us, a huge upside. We're already seeing a nice growth among service providers and telcos with early deployments and PoCs and tests going on," he said. "There is definitely the industry headed in our direction as NFV takes hold in the telco world." (See Dell Sees NFV as Gateway to Telecoms.)
The IoT is part of what's driving demand for NFV, Gelsinger said. IoT will require massive infrastructure buildout by service providers -- as will the progression to 5G, improved video resolution, and the move to virtual reality, all of which Dell and VMware plan to help service providers deliver, Dell said.
The two bosses spent most of the one-hour press conference delivering a single message: After Dell acquires EMC, and with it controlling interest in VMware, both Dell and VMware will continue to partner as before -- only more so -- while also maintaining their independent ecosystems. The deal is still on track to close by October, as initially stated when announced in October 2015 (See Dell Buys EMC for $67B in Biggest Tech Deal Ever and Dell-EMC-VMware Merger Could Push Comms to Kids' Table.)
"Dell is committed to continued independence of VMware, for us, for customers, and more importantly for the ecosystem," Gelsinger said. VMware expects to partner with Dell on innovation, and getting into emerging markets where Dell has a bigger footprint, such as India.
And yet the two companies will also maintain relationships with partners, some of whom compete with each other, the executives said.
For example: The CEOs were asked what would happen if Gelsinger came to Dell with a strategy that Dell thought was a bad idea. How would that conflict be resolved?
Gelsinger responded with an example from reality. As part of its Cross-Cloud Architecture introduction Monday, VMware announced a partnership with IBM on cloud services, an extension of a cloud partnership begun in February. "IBM is not particularly a great partner to Dell. They compete in different areas," Gelsinger said. Dell's response to the proposal: "That's good for VMware. You should do it," the VMware CEO said. (See VMware Seeks Cloud Dominance by Building Bridges and IBM and VMware Partner on Hybrid Cloud.)
VMware's board will review strategic direction, and if it's good for VMware, they'll approve it, Gelsinger said.
— Mitch Wagner, , Editor, Light Reading Enterprise Cloud