VMworld shows a VMware in flux

VMworld this year is all about the changing of the guard at VMware(s vmw) —  in more ways than one. This is a company in transition as its core server virtualization business continues to get commoditized. Here are 5 ways VMware showed itself to be a company in transition this week.

1: CEO swap-out 

Most obviously, the conference showcased the passing of the baton from CEO Paul Maritz to new CEO Pat Gelsinger.

The thinking is that Maritz, a software guy, was long on vision and strategic smarts and, of course in taking on Microsoft(s msft), where he had worked for years. Gelsinger after years at Intel(s intc) then at VMware parent company EMC is viewed as a hardware and an operations guy. A skeptic might say he’s there not to design the trains but make sure they run on time. And profitably.

2: Morphing into an open source citizen

VMware’s decision to pursue a Gold membership in the OpenStack Foundation, as first reported by GigaOM, could mean one of two things.

First, it could be just a way of extending Nicira’s current participation in the foundation where it furnished key parts of the networking piece of the stack. (VMware’s acquisition of Nicera is now complete.)Or second, it could signal a broader, more open-source friendly stance by VMware writ large. The company after all, is pushing Cloud Foundry as an open source platform as a service to run on any and all cloud infrastructure. (Conspiracy theorists posit a third option: That VMware still views OpenStack as a threat to its cloud aspirations and thus wants to keep an eye on it from the inside. Keep your enemies close, and all.)

But that seems pretty far fetched, even for paranoids like myself.

3: BYOD remains a big opportunity

A big part of Tuesday’s keynote was dedicated to VMware’s take on solving the bring your own device problem afflicting enterprises. This is an area where the company lags competitor Citrix(s ctrx). VMware demonstrated how IT can deliver device images managed via its Horizon Suite, which it says gives users one place to access their data, applications and desktops while providing IT a single console to manage all those access and security policies.

BYOD is a hot button issue since the steps many companies take — shutting off Siri on the iPhone or blocking Dropbox access — take away the very features that users want from their devices in the first place. That means they’ll probably just keep using personal devices for work but won’t tell anyone.

Vittorio Viarengo, VMware’s VP of marketing who blogged about his demo here, also coined what seemed to be a new phrase for BYOD — SYOM — spend your own money. He’s onto something there.

VMware also demonstrated out how Mirage working with VMware View can help ease the pain of Windows migrations — allowing them to happen without disturbing  the user.

“That,” said analyst Dana Gardner, principal at Interarbor Solutions, “makes BYOD and the Microsoft Windows migration mess manageable.”

4: Memory tax repealed

VMware needs to be more sensitive — or at least less tone deaf — to customer and partner needs.

It’s no accident that, as one of his first official acts, Gelsinger nuked the hugely unpopular VRAM or “memory “tax” VMware imposed last year. That announcement got more applause than anything else. Under VRAM, VMware started charging for the use of vSphere on every socket of a physical server and another fee on the amount of virtual memory used by the hypervisor. It went over like a lead balloon.

Gelsinger acknowledged that VMware had “created a 4-letter dirty word in VRAM.”  From now on, there will be “one easy [price] model, per CPU, per socket, all one model, easy to use,” he said.

The boneheaded move — essentially a price hike — reverberates to this day and gave vSphere customers reason to check out Microsoft(s msft) Hyper-V, which is getting better by the week, Xen or KVM as alternatives.  It’s true that base-level hypervisors and server virtualization is commoditized, but it’s still an important building block that can be parlayed into sales of higher-level and more profitable management tools.

5: Server virtualization biz continues to fade

It’s an old story but bears repeating: VMware retains huge market share in server virtualization but that market is saturated and commoditized.  So it was natural that much VMworld discussion centered around network and storage virtualization. Toward that end, VMware announced availability of vCloud Suite 5.1 which it pitched as the foundation of a new generation of software-defined data centers.

VMware also talked up Nicira and its SDN expertise, but it’s still unclear if and how Nicira’s OpenFlow strategy and VMware’s own vXLAN SDN world view will fit together.

The company’s aggressive goal is to get enterprise data centers — which Gartner(s it) estimates are about 60 percent virtualized now — to the 90 percent mark. Servers are just the tip of the iceberg there. Networking gear — switches, routers — and storage all need to make that leap as well.