VMware to Acquire B-hive

VMware announced today that they are buying B-hive, an Israeli based company that has an application mapping, application performance management, and end user experience management solution for virtualized applications systems. The B-hive product is interesting in that it is delivered as a virtual appliance that sits on a virtual mirror or spanned port on the virtual switch inside of the VMware host. This allows the product to see all of the application level flows between the layers of the applications systems, no matter how they are distributed between guests on one host, or multiple hosts.

This announcement changes the dynamics of the virtualization market in two very important and fundamental ways:

1. It is, at least for the VMware platform, a "game over" for many of the monitoring startups that were focused upon being "the" monitoring vendor for VMware as their business plan. Unless the remaining monitoring vendors have a really strong story as to why an enterprise customer should buy their product in addition to B-Hive, the startup monitoring vendors will now be selling against, and not with the VMware Sales organization. These vendors will now have to focus very hard on whatever their value add is with respect to B-Hive, and turn their attention to the Microsoft and Citrix virtualization platforms. Of course this also means waiting for Microsoft and Citrix to get to an installed base large enough to constitute a market, which certainly has not happened yet.
2. Taking ownership of applications performance is an extremely effective and strategic move on the part of VMware. This move is effective, because it says to customers that VMware understands that customers must be able to measure and ensure acceptable performance of virtualized applications in order to push virtualization beyond the "low hanging fruit" stage that currently exists. This move is strategic, because it says to Microsoft, "It does not matter if you make virtualization free. What matters is who can take virtualization the furthest and the fastest and thereby deliver the customer more ROI and flexibility". So, VMware is shifting the debate from "who has the best product", to "whose product can deliver the enterprise customer more ROI, more quickly". This is an extremely good move on the part of VMware because it will serve to accelerate deployments, and in turn drive more VMware license revenue.

This move on the part of VMware also significantly raises the "parity bar" on Citrix and just as they are respectively entering, or about to enter the market. VMware already has a signifant lead in the tools and products that surround the virtualization platform itself. HA, DRS, VMotion, the application mapping possible with the new release of SMARTS, and now application performance management and end user experience management with B-Hive consitute a significant difference in both manageability and functionality in VMware's favor.

Needless to way, Microsoft and Citrix are unlikely to stand idly by, and let VMware raise the bar in this manner with no responses. Since VMware has transformed the virtualization platform, into a virtualization suite, Microsoft and Citrix must to a significant degree follow suit. This means that remaining vendors that have significant pure play monitoring functionality for virtualized systems (see my Solutions Guide for the list), must now focus much more of their energies upon building a partnership with Microsoft and Citrix, and position themselves as candidates for acqusition. This also means that there is little likelihood of a long term independent market for application performance management and end user experience management for virtualized systems, as this will likely turn into war fought on the basis of who is building out their portfolio most effectively via acquisition.

Bernd Harzog
CEO
APM Experts
bernd.harzog@apmexperts.com