"There are no longer clients asking if they will virtualize, but rather when they will virtualize"

Friday, February 25, 2011

No matter which outlook predictions you consult for 2011, cloud computing and virtualization will undoubtedly top the list of up-and-coming trends worldwide. And California-based virtualization software company VMware is in the heart of it all.

BNamericas spoke to Héctor Luciano, VMware's director of sales for the CALA region, to learn more about the company's plans this year for the region.

BNamericas: How was VMware's performance for 2010, and what are the projections for 2011 in Latin America?

Luciano: When it comes to virtualized accounts, we have a 30-35% penetration. But the global trend is approaching 60-70%. As such, our goals for this year are aggressive - to grow and double our operations, if possible, with hard work. But that requires infrastructure and for the partners to adapt to changes.

We've been working on the virtualization side and now we're mostly moving to the cloud. Moving from data centers and private cloud, to begin to work in the public cloud with companies that don't have sufficient infrastructure. They can choose to bring it all to the public cloud, or platform as a service, with our consultancy services.

This year, we're driving a three-layer strategy. On a product and technology level, there's infrastructure and management - the ESXi hypervisor architecture with platform administration. After that comes the platform as a service layer, which is where our [2009] purchase of SpringSource comes in, for development of cloud-critical applications. The last layer has to do with devices - energy computing, which is where we talk about connecting to the cloud from any device, from anywhere and on any type of network, to access the applications.

BNamericas: Is this a new strategy for VMware?

Luciano: It's more of a reorganization to focus a bit more on how companies can get onto the cloud. While it's true that we have had various acquisitions on the management part, and we will continue making acquisitions this year, the cornerstone will always be virtualization and how to use virtualization to get to cloud computing.

BNamericas: For 2010 results the revenue breakdown was some US$1.5bn for the US and US$1.4bn for international. What does Latin America as a region contribute to international?

Luciano: I don't have a specific breakdown. I can say that we saw 70% growth [in the region] last year.

BNamericas: What would be some of the threats or weaknesses of virtualization in Latin America?

Luciano: Basically, the threat would be that companies don't virtualize and go straight to the cloud. But we're already working on the cloud with the service providers, so if a company doesn't virtualize internally it can go to the cloud; as such, there isn't really a threat. That's basically why we decided to work on both ends of the spectrum, so to speak - to ensure continuity.

BNamericas: VMware recently announced an agreement with HP regarding security in the cloud. Is this to confront some of the users' concerns about going onto the cloud?

Luciano: Absolutely. One of the first questions that a CIO asks is what happens when I go to the cloud. We have to work a lot on the security issue. In fact, the cloud security market is forecast to move US$23mn in the next four years. Basically, the number one reason for doing this is to ensure an effective, reasonable transition and provide the client with a certain level of ease of mind. There are also legal issues involved.

BNamericas: How is the partnership between EMC, Cisco and VMware going for the virtual computing environment (VCE) in Latin America?

Luciano: It's going very well. We have various projects in the portfolio that are being implemented with VBlock technology. Companies include Cisco's unified computing system, virtualization with products of ours such as Vshield and finally the storage with EMC.

And it's working: Clients are responding well because they like the VCE support. It helps them in focusing on defining and implementing their cloud. This year the product will see even higher penetration.

BNamericas: Last year we reported that VMware expected growth of about 300% in the Southern Cone in the next couple of years. Is this still true?

Luciano: Yes, exactly. We diversified the market a bit with regards to customer service. We're offering the operation based in Argentina, Chile, Peru and obviously the focus on the north and in Brazil, which has really taken off.

BNamericas: What differences have you noted between Latin American sub-regions - Southern Cone, the Andean region, Central America-Mexico, Brazil - for VMware?

Luciano: Data management and applications are critical and are where the business makes sense - virtualization of data bases and tier-1 applications like SAP and Oracle. Last year [customers] were reluctant to do it, typically based on the decision of whether there was support. But at the end of Q4, there was a regional stabilization, with the same product lineup being sold with the same strength and growth. So we now see that it's all much more organized on a regional level.

[Virtualization] is no longer an issue; there are no longer clients asking if they will virtualize, but rather when they will virtualize. So they're increasingly looking at energy costs, the growth of data centers, how much space they will need, etc.

BNamericas: Which company would you say is VMware's biggest competitor in Latin America? Citrix?

Luciano: We obviously see Citrix as a competitor in the desktop segment, in Windows MetaFrame; they're incumbents in that area. But I think they're increasingly seeing us as competition, because if you look at all the information on tablets, their performance is based on our Hypervisor, which really has no competition.

We're increasingly working on what is called the cloud operating system - that's where we want to go. We're looking to build the bridge between a company's private cloud and the public cloud, building a secure access on the hybrid cloud.

About Héctor Luciano

Prior to VMware, Héctor Luciano worked across the US, Latin America and Europe in companies such as Dell, Bubblemotion (a startup), BEA, IBM and Motorola. He has a degree in electrical engineering with a concentration in telecommunications and electronics.

Luciano has also worked under the council of advisers of the Gerson Lehrman Group for the past five years, advising investment managers from companies such as Merrill Lynch, Morgan Stanley and Sandler Capital, providing insight on user-based issues for the software and technology fund managers community. This work earned him a position on Modulant Solutions, where he currently serves as a board member.

About the company

Palo Alto, California-based VMware (NYSE: VMW) supplies virtualization and cloud infrastructure solutions, looking to enable more flexible, agile service delivery. It has more than 250,000 customers and 25,000 partners, and closed 2010 having sold some US$2.9bn - up 41% from the previous year.

The company has racked up more than 260 industry awards, including placing in consultancy Gartner's magic quadrant for its x86 server virtualization infrastructure.