VMWARE, INC., 2008 Harvard Case Solution & Analysis

VMware, Inc., 2008 Case Study Solution

Competitive Advantage

VMware was founded in the year 1998 on New Year’s Day and its founder was a graduate of Berkeley by the name of Rosenblum. The company’s primary function was to work on the virtualization solution. VMware was able to establish a competitive advantage with its competitors through focusing on the hyper visor platform. During the year 2008, the company had around 100,000 customers using the VMware products. The company has been providing free entry platform program as well as high-end virtualization solutions which have caused the company to increase its overall sales.

The company gained the competitive advantage through its ESX server, however, due to the prices decrease in the year 2007 from $3750 to $1000, the company decided to launch a new server by the name of ESXi which has a price of $495 per license. The demand for the product have been significantly increasing as the hardware vendors are able to bundle it with their servers. The price of the ESXi isnear the price of physical servers.

The company has also strong hardware partners which have given the company a competitive edge against its competitors. The partners are the world best computer companies such as IBM, HP and Delland chip producing companies such as AMD and Intel. The company had also expanded its products by increasing the range of its partners such as with Cisco System. In the end of 2007, the company had around 500 hardware partners for expanding its products.

Threat of Microsoft

Microsoft is one of the biggest companies of the world which deals in many computer-based products. It had become one of the biggest threats and challenges for VMware companies as the company had decided to enter in providing a solution for virtualization. In the early years during 2002, Microsoft had offered VMware for acquisition proposals which it had refused. VMware knew that it would be only a matter of time when Microsoft would enter the same market and become VMware’s biggest competitor. Microsoft acquired the company by the name of Connectix for entering the virtualization solution market.

VMWARE, INC., 2008 Harvard Case Solution & Analysis

In the year 2007, Microsoft launched a new server by the name of Hyper-V which is a complete version and is related with the ESX with a price of $999 per license. For beta-testing, the company would sell its service for $28 per copy. VMware believed that its ESX server had better advantages as the Microsoft’s Hyper-V lacked many features which were becoming critical in the management of virtualization. However, due to Microsoft’s strong distribution channel and its partnerships it gained the advantage of distribution.

Microsoft care in the first place

Microsoft dealt primarily with the manufacturing of Windows and it had decided to further increase its product line by entering the virtualization market. The purpose to enter into different markets is to improve the overall revenue and the ample amount of opportunity in the virtualization. Microsoft gave VMware an acquisition offers which it generally denied which made Microsoft more aggressive in entering the market. Microsoft believed that its new service Hyper-V would be able to capture the virtualization server market.

Microsoft Respond

Microsoft introduced a similar virtualization Hyper-V with the VMware service ESX platform. The price of the Hyper-V during its release was around $999 per license and for the beta testing, the price of service was $28 per copy. However, the service lacked many features comparing it with the ESX...................

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