So take a look at their products: the [[http://www.veeam.com/veeam_scanner.asp|scanner]] and the [[http://www.veeam.com/veeam_monitor.asp|monitor]]. Think about it — exactly what does their software do? It does some monitoring, presumably using VMWare API and/or existing OS tools and/or some inferencing. Its highly unlikely that they actually had to make //any// changes at all to VMWare source code itself. The scanning itself is almost VMWare agnostic. Atleast in the screenshot I can barely see anything which a regular network monitoring tool will not tell you. Even if there are some VMWare specific attributes, I would bet that they simply iterate through all the VMs using some provided API.

Where am I going with this? As far as I can tell, this software is only valuable because of its packaging. The nice GUI etc. For some reason that doesn’t often seem very compelling to me. But I’ve seen numerous examples of this elsewhere as well, where a customers found a product useful not because of revolutionary functionality but because of the packaging and presentation.

But the danger in building a business around these products is that the “big fish” (M$ or even VMWare) could one day decide that this is a cool feature that customers seem to be liking, and just start to bundle it with their products for free. Poof! Just like that, the small fish are endangered. The same thing happened with Google Calendar and Kiko. Or with M$ and thousands of third party software manufacturers back in the day.

//Differentiation// is important, but only when its not easily replicatable.