$30 billion VMware is cozying up to its greatest threat

VMware has built itself into a $30 billion company over the last 17 years by selling software to make and manage "virtual machines," a critical technology in the modern data center.

Virtual machines let companies run more than one full "computer" - operating system, applications, and all - on the same physical machine. They've become standard enterprise technology over the last 15 years or so, and VMware leads the market.

But a new challenger approaches. Since 2013, a technology called "software containers" has seen its star rise, with a push led by super-hot, billion-dollar startup Docker.

Docker's containers have the potential to scratch the same itch for software developers as VMware currently does, by making it easier to manage and move around applications - for a lot less cash.

Unlike a virtual machine, a container doesn't rely on having an operating system installed, which means that you can get a lot more performance with a lot less overhead. That eliminates one of the big reasons for using virtual machines in the first place.

Rather than try to fight the imminent threat of Docker and its containers, VMware has decided to embrace them instead. A year ago at VMware's annual Vmworld conference, VMware and Docker announced a partnership to make it easier for their mutual customers to manage virtual machines and containers, side-by-side.

Today, VMware takes that stance a step further with a pair of announcements at this year's VMworld, which started today.

First, VMware announced vSphere Integrated Containers, which makes it possible for customers of VMware's flagship vSphere suite to start making and integrating containers into their data center infrastructure without having to change a thing.

Second, the VMware Photon Platform is more aimed at the new wave of developers who are building apps using bleeding-edge technologies like containers from the jump. The Photon Platform is aimed at helping developers manage their apps and infrastructure, even at large scales.

Plus, VMware announced that the Photon Platform will integrate with Pivotal Cloud Foundry, a popular piece of software from VMware spinoff Pivotal Labs that helps developers make and run their applications in the cloud.

In short, VMware is slowly but surely trying to reinvent itself for a market that's changing around it. When VMware started, the idea of "cloud computing" was a pipe dream.

Now that it's real, VMware is facing a whole new set of challenges, and needs to move to make sure that it stays at the foundational level of data centers everywhere, or risk irrelevancy.