I visited IP Expo at Earls Court today and had a look around and concluded that everyone is on message about the cloud. If vendor push gets a technology going then cloud is moving at the speed of light.

I mostly went to interview VirtualGeek, Chad Sakac VP, VMware Technology Alliance at EMC who was hot off the IP Expo stage where he had been presenting. We got straight down to looking at the competitive landscape and analysing the challenges ahead.

Chad’s life is all about the alliances, making cloud real for customers, both private and public versions, leveraging the deep capabilities each of the three organisations have in the enterprise. All three are enterprise market leaders in the shared service layer space, EMC in shared storage, Cisco in shared network and VMware in shared virtualisation. Unsurprisingly when these guys announced alliances some months back it was big news. It was evident from our discussions that further announcements are inevitable and imminent.

VMware have won in phase one of the virtualisation wars, the aftermarket hypervisor of choice is ESX. Our research shows that 98% of enterprises use virtualisation and 80% use it for production applications. Virtualisation is mainstream and here to stay but it is still very immature.

Our research shows that few enterprise clients have made the leap to phase two of the virtualised environment and the jury is still out on quite how this will play out. Phase two of the virtualisation journey is moving on from consolidating the windows server sprawl to cut costs and starting to leverage the real promise of virtualisation, auto-magic. Auto-magic is the ability to seamlessly move workload around the environment autonomically. The nirvana of operational flexibility, the certainty of failover protection and the repeatability and reliability of templated pre-tested components and configurations.

We talked a lot about phase two and the challenges for the enterprise and the areas that vendors are going to have to get good at to sustain and win new business.

Managing a virtualised server environment is not much different from managing a physical server environment provided that application components stay put and don’t move around by themselves. This is phase one of virtualisation and can be characterised as a physical mess transformed into a virtualised mess. The application and server build standards are variable, the operational management process are informal and for the typical IT shop things haven’t actually changed that much.

To get to phase two lots needs to change, plainly we need robust technology but we also need a number of other things:

• Standardised server and application templates
• Standardised IT processes (think ITIL on steroids)
• Significantly more formality around change and configuration management
• The revitalising of performance and capacity management

In a sentence, our IT organisations need to lift their level of maturity and just get better and more repeatable that they are today. Evidence from the field shows that those organisations that adopt virtualisation wholesale in the hope that technology fixes their broken IT processes will be disappointed. Tryinging to use auto-magic without being ready is like moving from the cycling proficiency test to competing in an Indy Car race next day. It is sure to have similar tragic consequences.

So for vendors services are key. Customers will rely on their key vendors to help them mature and grow into managing their new private cloud. The VCE alliances have a huge challenge to scale up to meet this demand and I for one would be amazed if this could be done without a significant enhancement in capability. Choices are to partner with CSC or Accenture et al, to get to market fast but this is unlikely to provide the long term services platform that they need to win. My opinion (and this was not formally accepted by Chad) is that we should expect some acquisition activity in this space.

The next area we discussed was content. VMware are seeing significant competition from Xen and Hyper-v, driven in the main by vendor pressure from Microsoft and Oracle. To win in Phase three of the virtualisation cycle VCE needs to own the ISV community. In this they face stiff challenges from Microsoft who has always been strong in this space ever since Altair Basic but now with the .Net framework are market leading. Oracle play well here also with JEOS and ADF are widely used and accepted in the development community.

Phase three is all about virtualisation aware applications that can scale out and back again and understand the underlying virtual environment. Phase three will see tight integration between application and hypervisor and the winner will be the vendor alliance that gets developer mindshare.

VMware have not been sitting on their hands and the recent acquisition of SpringSource is a critical play. I expect to see further announcements and partnerships evolving soon.

So phase one is done, VMware won. Phase two and three will require very significant investments and flawless execution for EMC, Cisco and VMware to pull off a similar success. The jury is out, careers will be made and lost on the outcome. We live in interesting times.