Part of the investor optimism driving the stock price of VMware (NYSE: [[ticker:VMW]]) ever higher since its August IPO is based on the size of the market yet to be tapped by it and other virtualization software makers. Analysts say that only 5 to 7 percent of business servers have been equipped to run virtualization software, which maximizes the systems’ efficiency by allowing them to run multiple applications on multiple operating systems simultaneously. But the EMC (NYSE: [[ticker:EMC]]) subsidiary won’t have the remaining market to itself. Competitors as large as Microsoft and as small as local firm Virtual Iron will be vying for the business, as virtualization programs evolve into what might be described as next-generation operating systems for data centers.
To position itself for this fight, Virtual Iron brought on a new chief executive and a new lead sales executive this week. The Lowell, MA, outfit, which claims to be the only virtualization company with a product that is functionally equivalent to VMware’s pricey offering, appointed former EMC and Avamar executive Ed Walsh as its new CEO. Walsh immediately named former EMC and McData executive John McCarthy as his senior vice president of sales.
Walsh replaces John Thibault, Virtual Iron’s founding CEO, who previously led GeoTel Communications, worked as a senior vice president for Cisco Systems after Cisco acquired GeoTel, and was later CEO of Convergent Networks. Thibault remains with Virtual Iron as executive chairman.
Walsh says the transition isn’t a sign of dissatisfication with Thibault’s leadership, but rather a recognition of the need for a different kind of leader as Virtual Iron moves from a technology-development phase into a period of aggressive commercialization. “Talk about a Yankee company,” says Walsh. “John built a great product. He didn’t spend much on sales and marketing, but he got the early customers, but he built the right thing, and got down the ease-of-use. But now it’s not a technology challenge, it’s a go-to-market challenge. My entire background is about driving aggressive but sustainable growth.”
Walsh also emphasizes that thanks to his work at EMC and Avamar (a maker of backup and recovery software acquired by EMC in 2006), he is a “known quantity” in the ecosystem of server manufacturers and their customers.
VMware has been working on virtualization software since 1999, first with desktop machines, then moving into backend servers. But Virtual Iron was able to build a competing product relatively quickly by taking advantage of the Xen “hypervisor,” an open-source program—first developed by researchers at the University of Cambridge in England—that allows several guest operating sytems to run on a single host. And while VMware engineers had to write lots of custom code to get around the challenges involved in getting earlier chips to run multiple operating systems, Virtual Iron benefited from moves by Intel and AMD in 2005 to introduce on-chip support for virtualization.
Now, Walsh says, Virtual Iron has the only viable secondary option for customers considering VMware’s software, which he calls comprehensive but expensive. “The world needs an alternative to the juggernaut called VMware,” he says. And customers aren’t going to wait for Microsoft to come out with its own virtualization package, expected next year, he says.
“We are enterprise server virtualization made easy to buy, easy to install, and easy to partner with,” say Walsh. “That’s now mine to prove—not by hyping it, but just by telling the story, and bringing on the people who have done this in the past.”
