staffing the hybrid cloud 2 public private cloud clouds

Why it makes sense for Broadcom to buy VMware

Why on earth would a hardware and chip company like Broadcom buy a software company like VMware?

Wall Street and Industry Analysts I’m not exactly happy about the current deal, and last but not least. Companies sometimes do stupid things; that seems to be the consensus. But with this deal, that may not be the case at all. Broadcom may be capitalizing on the fundamental shifts in the industry, both in computing and networking.

The cloud has done a lot for computing, but one of the most important has been overlooked. It has given applications identity. We are now thinking of application front-ends that adapt customer, partner and employee information. We think of application hosting, application orchestration, application visibility and performance. The data center used to be the focus, the source that turned everything. Today I would say that virtualization and the cloud have brought us back to where our focus should be: the applications that power businesses.

The cloud has also reinforced a trend in networking that started decades ago with VPNs† Companies don’t build wide area networks nowadays they connect with them. VPNs have eliminated the buy-your-router-nodes-and-connect-leased-lines approach, and the natural integration between the cloud and the Internet takes us even further (and faster) away from WAN equipment. You access a service; you don’t build it.

Hybrid cloud: the front-end of the application

But the cloud isn’t just computing, and IBM has proven that. They’ve rejected the recent tech route, and a big reason for that is their relentless focus on hybrid cloud, the application hosting model that uses the cloud as a front-end user interface for legacy applications that still run in the data center and work with critical business data that is also stored in the data center. Hybrid cloud requires access to the cloud, a network function, but also connections within the data center. It is a driver of change in the data center network.

Enterprises build their own data center networks. In fact, the data center network is the critical link in the hybrid cloud, as it connects the front-end and back-end parts of applications, the most mission-critical applications a company has. The cloud-to-data center connection is the path that all critical data follows, the portal that powers hybrid cloud orchestration. This all goes through the data center network.

The network trend, the shift away from building a WAN, means that the data center network is likely the only real network an enterprise will build. It is the place where capital goods are bought, where the business operations are entirely the responsibility of the company. It’s also where the hybrid cloud is anchored, in (you guessed it!) applications. The data center and its network are the hub. Broadcom’s switching chips already dominate the white-box data center and SDN switch, and now they want the application connection, which means VMware.

By combining the chips that form the foundation of a data center network and the software that creates the application platform, Broadcom has a solid foothold in one of the two technology points where the hybrid cloud lives. The other point, of course, is the cloud.

Let’s play “suppose” here. Suppose the cloud is the future of IT, but suppose IBM is right in its view that hybrid cloud is the flavor of the cloud that matters. This means that the data center and its platforms and applications are more important than we thought. Perhaps they are more important than the “cloud” bit of “hybrid cloud”. All the publicity, all the media attention, all the developer interest, has poured into that piece of cloud, leaving the data center dancing like a geek. But they say nature abhors a vacuum, and all that interest and attention leaving the data center seems to have created one. With everyone else focused elsewhere, might this be a good time to build a strong data center strategy? Suppose it does, and suppose Broadcom does.

Virtually all business-critical applications and data are still in the data center. Enterprise CXOs tell me this isn’t going to change anytime soon, if it ever does. They say that the cloud-centric mindset today comes from a combination of media focus, not new stuff, and the fact that the focus of new development and new technology planning is on the hybrid cloud which is also new, which is the cloud part. Most importantly, what does the cloud hybridize with.

The cloud will become commonplace at some point. The media will turn to quantum computing, neutrino computing, or something equally esoteric. The applications and data that anchor the hybrid cloud are preserved, including the data center.

To continue our guessing game, suppose IBM has come up with this. Suppose the cloud providers are also aware of it. Suppose a common platform technology for applications in both the cloud and the data center becomes critical, so they are all working hard to extend their platform technology to the data center. VMware has the platform tools to counter that. Suppose data center networks are the other critical component. Broadcom chips could be the key to that. Broadcom closes the loop with a single acquisition.

Computing in data centers currently goes back 70 years. We’ve gone through transformation after transformation in the data center, we’ve shrinked the computer to something the size of a watch, we’ve moved from real to virtual resources, and yet we still have data centers. Remember when distributed computing or personal computing had to eliminate them? They are still there, and still critical, and the data center network is both here and critical as well. A VMware acquisition won’t ensure Broadcom’s success in this area, but it will provide the opportunity.

When I was a boy, I read a story about a boy who was criticized for fishing in what was the local junk pond. When confronted, he told a long and complicated story that justified his decision, which amounted to the possibility that the pond was a gateway to a huge fishing opportunity. The story illustrates that you can stretch the possibilities too far. The story ends before the fish issue is resolved. Maybe Broadcom sees possibilities and not real opportunities, just like that kid, but imagine. Suppose they are right.

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