BARCELONA: Technology is shaking up the business world as startups use the cloud to outcompete long-established companies, according to VMware, meaning that incumbents need to innovate faster to survive.
The warning came as part of VMware chief executive Pat Gelsinger's keynote address at the VMworld Europe conference, where the themes revolved around building a hybrid cloud ecosystem and simplifying it so that customers can focus on running their business.
Gelsinger touched on Dell's acquisition of VMware parent company EMC, announced earlier this week, but gave little away regarding the move, saying only that it was "just part of the historic industry-shaping events" affecting the IT sector.
Instead, Gelsinger talked about the trends in IT that he sees affecting the way businesses operate, linking these with strategies that VMware is following, such as hybrid cloud, to help customers meet the challenges.
The first of these is an "asymmetry of business", where startups are using technology to disrupt existing business models, such as Uber with taxis. Startups have access to shared resources that give them unlimited reach, and use the internet to reach large numbers of customers easily, Gelsinger claimed. In response, incumbents need to innovate faster to survive.
"It's no longer the big beating the small, it's the fast beating the slow," he said. "Elephants must learn to dance. They need to innovate like a startup while delivering like an enterprise."
Gelsinger also said that we are now entering the "professional era" of the cloud, where pilot deployments are giving way to full production use of cloud technology. But in order to take full advantage of the cloud, organisations will need to adopt a hybrid cloud strategy, augmenting their private cloud resources with those from one or more public cloud providers.
But with security and governance of data remaining key concerns for organisations, this means that they are likely to end up using multiple clouds and putting sensitive data in cloud services that are operated in their home territory, for example.
"Customers are demanding a local cloud in order to meet the problems of governance of data, and this is what the unified hybrid cloud is all about: having distributed workloads across clouds," he said, referring to VMware's 'one cloud' vision.
Meanwhile, security has become a growing headache for organisations because IT infrastructure has not been "fundamentally architected for security", Gelsinger claimed.
The solution is virtualisation, he said, and in particular VMware's NSX network virtualisation technology that puts security into every node and distributes it throughout the infrastructure.
Gelsinger also predicted that artificial intelligence will play a growing role in IT, as it is starting to come of age after decades of false starts.
"Thanks to the combination of cloud and big data, we really are at the cusp of proactive technologies starting to emerge. We are starting to see things that will deliver a new wave of industries," he said.
Gelsinger finished with the alarming prediction that at least 40 percent of the top 500 global firms will not be around in a decade thanks to industry upheavals. The survivors will be those that innovate and take risks, he claimed.
"Taking risks has become the lowest risk strategy, while inaction is the biggest risk. We must embrace these technology advances, we must take risks in order to move business forward," he said.
Earlier, the keynote featured a demonstration from Sanjay Poonen, VMware's general manager for end-user computing, of the enhanced management capabilities in Airwatch and Horizon, and the Project A2 platform under development that was unveiled at VMworld San Francisco.
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