After VMware announced their acquisition of Zimbra from Yahoo, I began to think about what VMware might actually be doing with their strategy for the Cloud that is perhaps different than what most would expect. VMware is moving from being a Virtualization/Virtualization Management company, to a Cloud company. What do I mean by that? VMware has seen the writing on the wall that in order for them to continue to grow at the pace required by the market, they must diversify further and provide more offerings. Simply put, VMware needs to offer a holistic suite, much like Microsoft does in order to keep shareholders happy. This is where the mirroring of Microsoft and the head to head competition begins.
Microsoft has Exchange, Outlook, OWA (Outlook Web Access), and Sharepoint as a messaging and collaboration platform. VMware now has Zimbra, which provides strikingly similar functionality. VMware has a stake in Terremark a vCloud Hosting Provider and is providing similar VMware centric capabilities to other hosters. Microsoft has Azure (launched yesterday). VMware acquired SpringSource in order to court the Enterprise Java community, how do they plan to do this? Indirectly of course. VMware will continue to allow SpringSource to act as an independent entity, however as Spring evolves and their CloudFoundry technology evolves, it will be focused on a deeper level of integration with VMware's platform. Why is this significant? Because it will mean the Java Developers will be more inclined to want their applications to be hosted on VMware because it will be a trivial integration due to the ease of using Spring (which in most cases will already be leveraged in their Java Application). Microsoft on the other hand, will allow developers using Visual Studio (Look to VS 2010 to offer tighter integration - It is currently in Beta) to leverage and deploy Azure services right from their IDE and won't require code changes to get integration with their cloud. Microsoft has a very large developer base and intends to use that as much as possible.
Who will win?
If you just look at the pure track history of both companies, it is still very difficult to place any bets. VMware is new to the Cloud Services space, but is leveraging its Virtualization expertise and has been an execution machine over the past 5 years. Microsoft is the 800 lb. gorilla with a larger development base, however Microsoft hasn't been incredibly successful in previous hosted service offerings (examples such as MSN, passport, and others come to mind). It will be an interesting next few years as the industry evolves from a set of pure platform and infrastructure to a services, cloud, and integration suite focused industry.