fantasy vc - virtustream

This fantasy vc post comes from something I wrote about in what we don’t know about private cloudandthe three cloud questions you have to answer”: 

The line between what we do in the public cloud vs what we do in the private cloud vs what never goes to a cloud model will be moved—both in time and in scope—by the cloudification of legacy applications.

In the space between public cloud for cloud-native applications and on-prem virtualization plus automation for non-cloud-native applications lies a big space for remote hosting of non-cloud-native applications. 

Some of this is satisfied by what can best be called managed hosting for virtualization, which is what most VMware-oriented service providers (even those that use the word “cloud”) do. And some of it is satisfied by VMware-oriented service providers that actually have managed to build a self-service, usage-based service model (like the very successful Tier3, recently acquired by CenturyLink).  

Yet despite the promise of being able to forklift a legacy app to a cloud provider and switch from a perpetual license model to a usage-based model to pay for a particular bit of software as a service—that is something that is rare. Enter Virtustream.

Put these things together:

  • Many enterprise apps cannot be re-architected to be “cloud-native”
  • There is demand to forklift enterprise apps to hosted infrastructure
  • There is demand to pay for those apps on a resource-consumption model
  • Many of those apps are only supported virtualized on VMware
  • Many enterprises don’t have the expertise to do the forklifting
  • Many service providers don’t have the expertise to do the forklifting
  • Many (most?) VMware-oriented service providers can’t figure out how to get the automation and resource-consumption parts done in a way that generates a sufficiently cloud-like experience for their customers
  • VIrtustream solves for this

The interesting thing about Virtustream to me is the apparent focus they’ve had from the beginning: these exact customers, this exact problem space, those exact applications. And nothing else. Period. 

The technology they built is fundamentally an enabling mechanism to make the resource-consumption model granular enough on VMware to achieve the cloud-like experience. The model they built is predicated on doing the hard work of the full life-cycle of an enterprise pre-sales/sales/post-sales consultative service. And they do the hard work.

That's not to say that they're guaranteed success. Or won't get crushed by an incumbent or other party. Or even scooped up before they become too successful. Just that I would've placed that bet.

Disclosure: Virtustream, as a whole, was adjacent to my coverage area at Gartner—but their xStream cloud management platform was squarely in my coverage area once it was commercialized.