'Hello Kettle? This is Pot. You’re black.'

VMware CEO notes irony of Microsoft warning of vendor lock-in

This story has been updated with new information on the HP-Dell bids for 3Par.

It’s amazing the people you run into at a technology conference.

Last night I was walking through a wine bar in San Francisco to stop in at one of many receptions held during VMworld 2010 and walked through another section of the bar full of people from 3Par, a storage vendor currently the object of a bidding war between two of the tech industry’s giants. Unable to resist the temptation, I went up to one of the people there wearing a 3Par logo on his shirt, identified myself as a reporter and asked him, “So could I get a show of hands here of who thinks it’s going to be HP and who thinks it’s going to be Dell?” He laughed nervously for several seconds -- until I walked away.

Update: HP won the bidding war with $33 a share when Dell Thursday declined to counter.

The tech industry is not without its sense of humor. Or of irony.

That came through during a press conference with Paul Maritz, VMware’s president and CEO, after his keynote address at VMworld, hosted by his company that is the leading force in the move towards virtualization of IT resources internally and in cloud environments. Maritz was asked to comment on an ad Microsoft bought Tuesday in USA Today that was an open letter to VMware’s customers, many of whom were attending VMworld. It warned them to be wary of signing a three-year service contract with VMware without first checking what else is out there, such as from Microsoft.

“Signing up for a 3-year virtualization agreement may lock you into a vendor that cannot provide you with the breadth of technology, flexibility or scale that you’ll need to build a complete cloud computing environment,” wrote Brad Anderson, corporate vice president of the servers and tools business at Microsoft.

“For Microsoft to talk about vendor lock-in is a severe case of the pot calling the kettle black,” Maritz said at the news conference, adding that Microsoft’s buying a full-page newspaper ad during VMware’s convention was flattering. “That tells me that we must be doing something right.”

Late to the virtualization game, Microsoft introduced the Hyper-V hypervisor as a free add-on to Windows Server in 2008 and has since added various management tools to implement Microsoft-style virtualization. But Maritz was skeptical of IDC numbers Microsoft touted at its analysts day event in July that Hyper-V is gaining on VMware with 24.4 percent market share in June 2010 to VMware’s 49.9 percent. It depends on how you count hypervisors, he said, specifically whether you count free ones. Hyper-V is free but there is also a free version of VMware.

While acknowledging that Microsoft has tremendous resources to be competitive, VMware has “far and away the largest market share” and right now, Microsoft is scrambling to catch up, he said.

“The one thing I have learned in 30 years in this industry is that money can’t buy you time, and we believe we have a substantial lead over what Microsoft is bringing to bear and we have every intention of keeping that lead,” Maritz said.

And at this point in the evolution of virtualization, the hypervisor is almost beside the point, he added. The real competition is in the management software that runs a virtualized environment and VMware introduced a strong new suite of such products yesterday. “We have long since ceased to be a hypervisor company,” Maritz said.

And among the many people I talked to at VMworld, including the CTO of a well-known Silicon Valley tech firm, the consensus is that VMware has the sophisticated management tools to make for a successful implementation of virtualization and, from there, to cloud computing. Microsoft may be able to make inroads in the portion of data centers running Windows, but its management tools aren’t yet as evolved as are VMware’s.

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Copyright © 2010 IDG Communications, Inc.