There is a new Chief Technology Officer (CTO) at VMware. Kit Colbert is thirty days into the role after eighteen years at VMware, where he started as an intern. Kit is responsible for ensuring VMware's long-term technology leadership through research and innovation programs. His responsibility includes advancing research and development efforts, overseeing the VMware Engineering Services team, the Design/UX team, and the company's Environmental, Social, and Governance (ESG) commitments.
Recently at VMworld, it was an absolute pleasure to have the opportunity to talk with Kit about the priorities for VMware and his vision for the future.
For any incoming CTO, my first question is always about priorities for the coming year.
The number one priority is the SaaS platform. Kit expects it won't be complete, but he wants to see critical use cases and standards across all VMware SaaS solutions. In his first thirty days, he has been defining milestones for the upcoming year.
The second priority, not surprisingly, covers ESG and diversity, equity, inclusion. These are essential factors for VMware and Kit, who are committed to driving change within the engineering organization and across the company.
The final priority is to become the multi-cloud platform provider of choice. That will require gaining mindshare around multi-cloud and cross-cloud services and having a crisp definition and understanding of why VMware will win in that space. This priority is very much dependent on accelerating the transition to a subscription and SaaS business model.
The importance of a SaaS platform
VMware recently expanded the scope and the charter of the office of the CTO. Traditionally, a CTO at VMware would be very focused on research, innovation incubation, along with evangelism, and talking with customers and partners. While retaining those core activities, the expanded role includes the Software as a Service (SaaS) platform, the core building block for all VMware SaaS services. The goal is to accelerate the journey to SaaS with a standardized platform to support all VMware services. Kit pointed out that this is the journey for both customers and VMware, underscoring VMware's emphasis on the SaaS platform.
Three months into his new role, VMware CEO Raghu Raghuram emphasized the same priorities to become the multi-cloud platform provider of choice by accelerating the transformation to a subscription and SaaS business model.
VMware has made some inroads with a subscription and SaaS business model. All recent product offerings have come to market with a subscription and SaaS business model option. In VMware’s fiscal Q2 2022 (the three months ending July 30, 2021), subscription and SaaS revenue rose 23%, although subscription and SaaS revenue still account for just 24.7% of total revenue.
This year, VMware introduced VMware Cloud Universal, which offers subscriptions to the services sold under a VMware Cloud umbrella. It works like a stored-value card. You pay ahead to build credits to be used any time during a one- or three-year term. The program includes VMware Cloud on AWS, Dell/EMC, and VMware Cloud Foundation.
Update on ESG progress
VMware made a considerable diversity push a little over a year ago by saying that all hiring for open positions would consider both a woman and a minority candidate.
Now, for any interview at VMware, there must be at least one woman and minority candidate on that panel to have a diversity of perspectives regarding the different interview candidates. Kit also mentioned working on the inclusion front by creating a more inclusive working environment for employees.
From a carbon-neutral standpoint, vSphere already lends itself very well to the sustainability space helping customers save billions of units of carbon dioxide over twenty-two years it has existed. VMware is looking to move from carbon-neutral, which was achieved a few years ago, to net-zero carbon going forward for both the company and with the supply chains and partners. Going from carbon-neutral where there is a policy of not increasing carbon emissions and achieving carbon reduction through offsets to net-zero carbon means reducing carbon emissions to the lowest amount – and offsetting as a last resort.
Doubling down on multi-cloud
At the VMworld 2021 conference, VMware reported that 75% of its customers rely on two or more public clouds, with about 40% using three or more. Quite frankly, that does not surprise me, as I have been saying it is a multi-cloud world out there for years.
In June this year, I wrote about VMware’s multi-cloud strategy and the VMware Cloud platform in an article titled “VMware is an easy button for multi-cloud." The report laid out three criteria for a proper multi-cloud solution that VMware met with flying colors.
However, VMware presents a dizzying array of products and services with naming conventions I find confusing. I am sure Kit has heard this feedback from customers, and on the journey to a "crisp definition and understanding of why VMware will win in that space," the naming issues will need to be resolved.
Customers love the simplicity, pay for consumption, and flexibility of SaaS, and I have always maintained that it is the future. However, many VMware customers prefer a licensed software business model over the subscription and SaaS business model in specific geographies and certain verticals. The reluctance could be because of a perceived lack of control, fear of outages, security, forced upgrades, or all of the above. That reluctance is something VMware will need to overcome for continued growth in the subscription and SaaS business.
Concerning multi-cloud, VMware is expanding its partnerships with hyperscalers. VMware Cloud on AWS is a good example. Now that VMware is a standalone, independent company, I expect more partnerships with companies historically reluctant to partner deeply.
Again, it was an absolute pleasure to have the opportunity to talk with Kit, and I look forward to reconnecting in a year to see what he has achieved.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.