Vmware It Case Study

CIS 621- Sec. 71 – Management Information Systems - Spring 2011, PR |Submitted by: Enid Barillas,

Melissa Cruz, and Jose Martinez. | |

|Case VMware Inc., 2008 | |

Question: If you were advising Paul Maritz, which of the strategic options laid out in the case would you recommend? Discuss one in detail.

Stay the Course strategy is our recommendation for Paul Maritz. The virtualization market and VMware company conditions presented in the case provide indicators to consider this strategy the best alternative. The analysis and recommendation of this strategy is based on the study of the following two strategic shape models:

• The Five Competitive Forces that Shape Strategy.

• The Customer Intimacy and Other Value Disciplines.

The propose strategy of offering a version of its flagship product for free and the plan to enter the emergent field of “cloud” computing are key decisions for VMware company to respond to the forces of “new entrants into the market and substitutes”. By the time Paul Maritz proposed this change Microsoft was already entering into this market, and for Microsoft there were no reasons to believe it will have barriers to enter that market nor to have capital difficulties. Given the characteristics of the virtualization market1 the “power of buyers” is another force that is relevant for VMware and any other company that want to participate. In this industry the buyers are high volume purchases, therefore VMware wanted to focus on bundled value for customers. In response to this force, Raghu Raghuram2 explained VMware approach to this force “We want to establish our product as the core technology for the data center - that is to proliferate the platform. Next, we want to transform the value proposition: Make it about IT transformation3, not just server consolidation.” The expected result of this value proposition would...