By Ofir Nachmani, IOD CEO
I have known Bernard Golden for years, and it is always a pleasure to chat with him and hear his views about the enterprise IT industry, in general, and, of course, about cloud trends. Over the last decade, I’ve found that interviewing experts and influencers (whether at a conference or remotely) has proven to be both educational and beneficial. This conversation with Golden recently over Skype also gave me lots to think about, especially one month before AWS re:Invent 2017.
The purpose of the interview was to get his takeaways from the VMworld conference in August, which hosted close to 24,000 IT professionals. We discussed the atmosphere at VMworld, VMware’s attempts to stay relevant in the face of AWS’s rapid development, the current state of the ecosystem, and more.

VMware is an established player in IT and is historically known for server virtualization, but Golden says that it is no longer limited to this traditional role. According to Golden, VMWare’s main focus today is trying to respond to the increasing importance of apps and its comparatively smaller impact on operations. For that matter, VMware is making large investments to build its footprint in mobile and client device management and security. It is also expanding into applications delivery, containers, and the public cloud.
Our conversation continued with a back and forth about the IT industry’s two largest events: AWS re:Invent and VMWorld.

The Show Floor

When it comes to traditional vendor conferences such as VMworld, I asked Golden, was his experience similar to what I typically experienced at re:Invent (which amounts to an annual amazement at Amazon’s consistent trailblazing innovation)? Did he make any observations about how the VMware ecosystem is changing to adjust to the continued adoption and growth of cloud?
Golden told me that he saw a rich ecosystem at VMworld, where many professionals on the exhibition floor said their services were more than a solution just for VMware or bare iron type stuff, but for Amazon, too. He saw lots of backup and hybrid cloud solutions to help customers run multiple IT environments across multiple domains and infrastructures.
Golden was also surprised by how many large booths there were this year. He said that just ten years ago, these same providers represented their companies in small booths along the least expensive side strips, but this year they had custom booths in high-priced, high-visibility spots. He says that the rich ecosystem validates VMware’s success. Golden is right: VMware is doing very well. It has grown 13% each year while other established players are experiencing negative growth. While other established companies are giving up on the public cloud and are retreating, VMware continues to grow.
I have noticed similar ecosystem changes, and it is one of the more interesting movements I have been covering over the last few years when it comes to cloud. For example, new startups such as CloudCheckr, Datadog, and Dome9 have raised hundreds of millions of dollars in recent years. They started from nothing, but by understanding the AWS disruption and taking advantage of it, their companies grew and they too moved from unimportant spots at re:Invent to center stage.

One Market, Two Branches

We know that opportunities in the IT industry are growing like crazy, but what does the future of IT look like?
Golden referenced a paper from IDC that states that the industry is splitting into two branches: one that is static and low-growth (1-3% each year), and another that is basically the cloud side of things with a high growth rate (~20% each year). He sees things playing out this way in IT, with the traditional players in a downward trajectory and cloud players continuously growing. Referencing a recent blog post of his, Golden said that AWS’s 40% growth is at about $15-16B, and he researched to see if any other technology companies could compare. He said that only Google and Facebook came close to AWS’s growth rate, but that they still had a much “lighter touch than AWS in customer adoption.” We both agreed that Amazon’s growth is unprecedented, especially for a company that is being used in the enterprise market. Up until now, only scalable technology has been able to grow at this rate.
Looking at the phenomenal increase in amount of attendees at AWS re:Invent, starting at around 5,000 in the first year to more than 30,000 people last year, I can confidently say that AWS fits into the second branch Golden described. Amazon’s native internet play and strong ecommerce skills made AWS wildly successful as they started selling EC2 instances by the hour… and today by the second.
Read more: Amazon, Microsoft and Google: The Cloud Leading Trio

Wrapping Up: AWS Becomes Traditional IT, Too

I asked Golden to summarize the relationship between Amazon and VMware. He said that while VMware has always been what we consider traditional IT, AWS is now becoming “traditional” IT, too.
In the past, many thought AWS was only for startups and small businesses. However, after attending the last AWS re:Invent, Golden said that he noticed the attendees were very mainstream, or “blue shirts and Dockers,” as he cleverly put it. VMware sees AWS’s rapid growth, so they are really trying to make a partnership with AWS work in order to stay in the game. To paraphrase what Golden told me, from re:Invent, you get the sense that AWS is the future of IT, whereas VMworld feels more like a gathering of the traditional IT crowd. If VMware and AWS learn to synergize, they have the potential to do great things together.
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Are you a tech evangelist or cloud influencer? Drop me a line. I’d love to meet you and interview you at re:Invent this year!