April 12, 2022

VMW - VMware's Tanzu Launch

By Benjamin Buehne

VMware’s recent Tanzu product launch has had weak early results because of a disconnect between the target market and VMware’s traditional reseller channel, a strong incumbent product and reputational issues.

Because containerization is expected to largely replace virtualization in the future, VMware Inc. responded by launching its Tanzu Application Platform, a Kubernetes container management solution, in 4Q21, and has highlighted this product suite as important to its future growth. However, although OTR Global’s February note had unprompted optimistic feedback on Tanzu from five sources, channel partners now report Tanzu has had only limited traction since its launch. One said, “[There is] lots of talk about Tanzu, [but] we haven’t run into it. From all of the people I speak to, they expect that it has value, but no one has seen real sales that are significant.”

Only two of seven sources reported selling Tanzu as part of cloud deals during the past three months. In addition, only three of seven said customers were asking about it, but the other four reported no customer interest. “The share is still relatively small at the moment. We are increasing our go-to-market activities and directly approach our customers, but if we look at the pure implementation, it is still a very small share — about 3% of the total revenue. But Tanzu can definitely gain ground in the cloud market,” one said. Another said, “I wouldn’t call it pressure to sell Tanzu, but they do offer us plenty of enablement. There are extra incentives to sell Tanzu, but since I don’t have a specific focus on Tanzu, I can’t say what.”

Channel Disconnected From Tanzu’s Target
According to sources, part of the disconnect between buzz and sales stems from Tanzu being geared toward the DevOps market, which is not the typical target market for VMware’s channel. One said, “If you are talking to a vCenter admin, it’s relevant, [but] a coder doesn’t care. The paradigm shifts the further toward DevOps you go. VMware is linked to legacy infrastructure and IT in spite of the marketing.” Another said, “We are not a great partner to profile with Tanzu. We aren’t having conversations with the DevOps people.”

While this may explain the lack of reported sales, it may also point to an issue with VMware’s ability to sell into this market. People in DevOps tend to be younger and have little to no experience or brand recognition with VMware. One partner said, “A lot of legacy tech, their value propositions are in the traditional data center. … Somewhere in the next generation of technologists, they work with [Apple Inc.’s] Macbooks and Android [operating systems]. ‘VMware, why? I run Parallels. Why do I need to pay for VMware?’ That’s the pivot in the industry many vendors struggle with. What’s the relevance to the next generation?”

DevOps Talent Scarce
DevOps, the primary target for Tanzu and competitors, is a rapidly growing field with far more openings than talent available to fill those openings, and sources said that gap seems to be growing wider. “There are not enough DevOps talent to look at Tanzu,” one partner said. “I heard from a high-level person familiar with cloud and DevOps [that there are] around 450,000 DevOps [positions] open in the U.S. There’s not that many people in DevOps in the U.S.”

A source who works in implementation said the lack of DevOp talent is bad and that he and other members of the implementation team are being asked to work with Tanzu. “I tried using it and configuring it, [and] I found it to be not easy to configure. If you are a developer, then it is up your alley. If you are an infrastructure guy who is supposed to configure Tanzu for a developer, then you will have a tough time. I took a class on it. and it was mostly infrastructure guys. … I found it very difficult. You have to try it 10 different times before it works. You have to do a lot of the same setup you would have to do anyway [in DevOps].”

OpenShift is Incumbent
Sources said Tanzu is not unseating OpenShift, the incumbent Kubernetes cloud management platform that IBM Corp. acquired with Red Hat. One said, “We don’t see any replacements at the moment, but customers are considering it. … With [Alphabet Inc.’s] Google's Natives, we are in the process of replacing certain things, but the topic of containerization platforms is still relatively new for many of our existing customers, so we often meet a new customer with Tanzu.”

Although VMware has split from Dell Technologies Inc., one source suggested development with Dell may be a future driver. “The one [project] we did was alongside VxRails, and there may be a trend there,” he said.

Sources also said Tanzu may not benefit from VMware’s reputation. “Knowing that VMware isn’t cheap, Tanzu will have to prove itself in the marketplace against other solutions from [Hewlett Packard Enterprise Co.], Red Hat [OpenShift], SUSE [S.A.’s Rancher], etc.,” one said. “I think there might be a certain level of wariness among developers that VMware might have some proprietary elements.”

Additional Quotes
“NSX is often a component of the deals, and a large portion is VxRail."

“Since Tanzu is a Kubernetes container-based solution, developers would be most interested in it right now. Since containers will probably become the predominant virtualization technology in the coming years, I’d say most industries should eventually be adopting it.”

“Tanzu has not displaced anything. We sell and run Tanzu in addition to everything else.”

“Automation is huge. From a Tanzu perspective, why would I get locked into anything VMware if I’m deploying Kubernetes? I’m be deploying OpenShift. VMware is the tail that tries to wag the dog. It’s necessary for VMware because they can’t stay viable without it. The fact that they opened up VMware cloud on all three hyperscalers says a lot. They see the inevitable shift to public clouds for workloads. If they aren’t in the mix, then they are out.”

Previously Unpublished Quotes About Tanzu From OTR Global’s February Interviews
“We had some deals with Modern Application — i.e., Tanzu and others — and again expect a lot of projects in this area this year. We still planned more cautiously because from our point of view the markets are changing and we have many new stories — e.g. Tanzu, which is consulting intensive.”

“We did see a bit of an uptick in some of the more advanced VMware solutions: vRealize, NSX, some Tanzu.”

“VMware is pushing Tanzu a lot. It’s a watching brief for us in the U.K. market, but I’m aware of growth in other European geographies.”

“[VMware is] mainly pushing the technologies. They are going out with Tanzu, Carbon Black, the hyperscaler topics with AWS, etc.”