Of Virtualization and IPOs

VMWare is the little company that could. When it was launched in the late 1990’s, the “smart money” wouldn’t touch it. It wasn’t just that it was open source – a big “loser” badge at that time. It wasn’t just that it was founded in part by a husband-wife team who had established business (Tandem, SGI,…) and academic credentials (UCB, Stanford, MIT,…) – an even bigger “loser” badge that still persists in some dark corners. It’s biggest damnation by old-line investment was that virtualization was a trite idea. I heard this myself frequently from the horse’s mouth, so to speak, during the time I was working with 386BSD and InterProphet, and I pitched a similar idea to Tandem’s CEO back in 1996. It was the next obvious step – at least to a technologist.

Given the tremendous success of this IPO, you might ask “How could they have missed this one?”. Technology, like fashion, goes through phases, and sometimes smart people get so hung up on fashion they miss the trend line change from computer as a calculating device to computer as an organizing device (and vice-versa). If a computer is a calculating device, you want the most cycles. If it’s an organizing device, you want to spend time adding stuff, not managing stuff. A bit processor, like blit-bit processing for graphics, the more concrete, discrete and obvious the instructions executed at the bottom level, the more goodness you get out of the machine. A symbol processor, like parsing language or voice recognition built out of abstraction, is not as deterministic by the nature of the function desired, so capacity to process symbols and the benefit it provides overrides performance.

This happened with virtualization. At that time overfunded Internet companies (remember Egghead, for example, anyone?) and their backers absolutely believed that the most important technical issue was to build a site industriously out of C++ code to maximize performance. They didn’t believe sites based on scripting languages would be powerful or scalable enough for their millions of customers. They underestimated the demand for rapid creation and deployment of new features. Now everyone uses scripting languages like Perl, Python and PHP (we use Python on all our sites for example) – it’s faster and easier. VMWare realized that people allocated servers for containers of scripted sites when performance was impacted, and it didn’t make any difference if it was virtual or real. As reducing power demands becomes a “hot” button topic, virtualization will be increasingly used in datacenter and networking applications.

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