This article is based on reporting originally published at searchvmware.techtarget.com. Analyst quotes are attributed to their original sources.
VMware’s Virtualization Legacy and the Container Challenge
VMware built its enterprise reputation on virtual machine (VM) technology. For decades, it was the dominant vendor in server virtualization, and large enterprises relied on VMware infrastructure management solutions to run their data centers. However, the rapid rise of container technology introduced a structural challenge: containers offered many of the same portability and isolation benefits as VMs, but with a lighter runtime footprint and faster startup times, making them increasingly attractive for modern application development.
Rather than leading the container movement, VMware was slow to respond. Its existing customer base and revenue model were deeply tied to the VM ecosystem, and containers — largely driven by open-source communities — represented a different development culture than VMware had traditionally served.
Why Enterprise Container Adoption Accelerated
Enterprise interest in containers grew rapidly in the late 2010s. According to a Gartner report cited in the original source, more than 75% of global organizations were projected to run containerized applications in production by 2022, up from fewer than 30% in 2018.
“Containers provide companies with much needed agility,” said Arun Chandrasekaran, distinguished vice president and analyst at Gartner. Containers divide application code into small, discrete packages that teams can compose, deploy, and update independently — reducing development cycles and enabling continuous delivery practices.
Market research firm IHS Markit projected that container software revenue would reach $1.6 billion by 2023, representing a roughly 30% compound annual growth rate from 2019, according to its Data Center Compute Intelligence Service.
VMware’s Slow Start in Containers
While Red Hat and Docker moved early to capture the container market, VMware stayed focused on its VM business. By the time VMware made substantive moves into containers, competitors had already established strong footholds. According to figures cited in the original reporting, VMware held approximately 6% of the container market, compared to IBM’s Red Hat at around 44% and Docker at roughly 23%.
The gap is partly explained by the different philosophies of these vendors. Red Hat built its enterprise business around open-source software and cultivated deep relationships with developer communities through consulting and training. Docker embraced open-source tooling from the start, making its runtime the de facto standard before Kubernetes emerged as the dominant orchestration layer. VMware, by contrast, had historically focused on proprietary infrastructure tooling and enterprise sales cycles rather than developer-led adoption.
“VMware built a legacy business based off of customers who work with its infrastructure management solutions, but lacked a strong presence in the developer community,” said Gary Chen, research director of software defined computing at IDC.
VMware’s Strategic Pivot: Key Acquisitions
Recognizing the risk of being left behind, VMware made a series of targeted acquisitions to build its container and Kubernetes capabilities:
- Heptio (November 2018): Heptio was founded by Craig McLuckie and Joe Beda, two of the original creators of Kubernetes at Google. The acquisition gave VMware both Kubernetes expertise and credibility within the open-source Kubernetes community. “The Heptio acquisition was geared as much [toward] gaining the company’s talent as its technology,” Chen noted. “The founders were very influential in the Kubernetes community.”
- Bitnami (May 2019): Bitnami specializes in application packaging for container and Kubernetes environments, simplifying the deployment of common workloads on Kubernetes clusters. This acquisition strengthened VMware’s developer-facing tooling.
- Pivotal (December 2019): VMware had partnered with Pivotal since 2018 before acquiring it outright. At the time of acquisition, Pivotal’s container platform was reported to have around 140 enterprise customers. Pivotal brought cloud-native application development expertise and its Cloud Foundry-based platform into VMware’s portfolio.
These moves signaled a deliberate effort to complement VMware’s infrastructure management strengths with modern container orchestration and developer tooling capabilities. VMware’s existing enterprise relationships — particularly its dominance in server virtualization and network management — gave it a natural upsell path for container management solutions.
Challenges Facing VMware’s Competitors
Red Hat and IBM Integration
IBM acquired Red Hat in October 2018 for approximately $34 billion, one of the largest technology acquisitions in history. While Red Hat’s OpenShift platform remained the leading enterprise Kubernetes distribution, integrating a company of Red Hat’s scale presented significant organizational complexity. At the time of the original reporting, IBM had made relatively few changes to Red Hat’s day-to-day operations, instead focusing on weaving Red Hat technology — particularly OpenShift — into its own cloud and software portfolio.
Docker’s Orchestration Pivot and Mirantis Acquisition
Docker’s own trajectory illustrates how fast the container market shifted. Docker developed Swarm as its native container orchestration tool, and it gained meaningful adoption. However, Kubernetes quickly became the industry standard for container orchestration, largely displacing Swarm in production environments.
In November 2019, Mirantis acquired Docker’s enterprise platform business, which reportedly served around 750 business customers. Mirantis, previously known for its OpenStack expertise, planned to incorporate the Docker Enterprise platform into its Kubernetes-as-a-Service offering. Mirantis also committed to supporting Docker Swarm for at least two more years post-acquisition.
However, Mirantis’s OpenStack background was viewed as a potential liability. “Throughout its history, Mirantis has been closely aligned with OpenStack; containers are much different,” Chandrasekaran said. Like VMware, Mirantis faced the challenge of pivoting its engineering culture and go-to-market approach to align with Kubernetes-centric enterprise needs.
VMs and Containers: Coexistence, Not Replacement
One factor working in VMware’s favor is that containers and virtual machines are not mutually exclusive. Many enterprises run containers on top of VMs, using VMs to provide hardware isolation and security boundaries while containers handle application packaging and deployment. This hybrid model plays to VMware’s existing strengths and gives it a natural entry point for adding container management capabilities to its existing customer accounts.
Even in organizations that fully embrace containers and microservices, underlying infrastructure — networking, storage, compute management — remains a requirement. VMware’s infrastructure management expertise remains relevant across both paradigms.
The Road Ahead
As of the original publication date (early 2020), the container market was still in a formative phase. VMware’s acquisitions had positioned it more competitively, but execution remained the key variable.
“VMware got a late start with containers, but they have been pivoting hard and outlined a vision that should appeal to their customer base,” Chandrasekaran said. “What they need to do now is execute on that vision.”
VMware’s primary advantages — a massive installed enterprise base, deep expertise in infrastructure management, and a trusted brand among operations teams — give it a credible platform to build on. Whether those strengths translate into container market share depends on how effectively VMware can close the gap with developer communities that Red Hat and Kubernetes-native vendors have cultivated over years.
Key Takeaways
- VMware entered the container market later than Red Hat and Docker, resulting in a significantly smaller market share as of early 2020.
- A series of acquisitions — Heptio, Bitnami, and Pivotal — were VMware’s primary mechanism for gaining Kubernetes talent and tooling.
- Red Hat leads the enterprise container market, but its absorption into IBM introduced integration complexity.
- Docker’s Swarm lost out to Kubernetes; its enterprise business was acquired by Mirantis in late 2019.
- Containers and VMs coexist in many enterprise environments, which provides VMware an organic expansion path from its existing customer base.
- Execution on strategy, not just the strategy itself, will determine VMware’s long-term standing in the container market.