VMware Announces New Hybrid Cloud Service

So VMware is not afraid of the public cloud after all. With the announcement of a forthcoming (later in 2013) VMware vCloud Hybrid Service, the virtualization leader reboots its cloud message for the enterprise. VMware will offer its own public cloud infrastructure service built on the same technology stack it offers to vCloud Datacenter service provider partners. That includes the vSphere foundation and the vCloud Director (with vCloud Connector) multi-tenancy and on-boarding tools, plus vCloud Networking and Security. VMware will add on a new public-focused portal and additional provisioning tools, and promises to share those capabilities with service providers as well, but it's not yet clear how and where VMware will differentiate and compete. If VMware offers better access controls and financial management tools, for example, than its partners, on the same platform, why would the partners not look to an open source alternative? That’s certainly a risk.

But it’s a risk VMware is willing to take to reclaim its credibility as a cloud (not just data center) infrastructure management leader. The company is betting on a shift in who buys cloud services and what those new buyers want – and wants to both enable and accelerate that shift. Most public cloud buying in the enterprise has been driven by business-aligned development teams who use public clouds like Amazon AWS to build quickly, test, and deploy new web-centric apps. Once cloud apps are in production, however, someone’s got to operate them. That’s where VMware’s traditional buyer, the I&O professional, comes in. I&O buyers want to use the tools they know and love to provision, maintain, secure, optimize, and control cloud apps, and for many that means VMware VMs and management tools.

Basically, VMware’s strategy is to take out some provider friction by becoming a cloud provider itself. They want to broker the conversation between application development teams (“I want a simple, pay-per-use cloud to build and deploy quickly and cheaply”) and operations teams (“I can offer you my skills to manage your cloud workloads whether they run in our data center or a public cloud”). As cloud apps become business-critical, traditional data center operators need to become cloud operators, and VMware wants those operations tools to stay linked to VMware infrastructure. Today, ops teams who want to encourage developers to build on VMware infrastructure have to push them toward a vCloud Datacenter provider and hope that provider can compete with AWS for developer love.

It's not clear how licensing will work yet. There will be hourly pricing in the vCloud Hybrid Service, yet existing customers will naturally want to extend VMware ELAs to include cloud workloads. If you own rights to run VMs on a certain number of CPU's today, what will you pay to run them hourly in the VMware hybrid cloud? Unclear. Even though there are details we need to see, this is a bold bet. VMware is risking some provider partnerships for the chance to enable more of its loyal VMware administrators to take control of how their enterprises leverage cloud services.

For more on this, check out James Staten’s post as well. 

Comments

Dave, nice piece. I am a

Dave, nice piece. I am a little unclear hear. Are you saying VMware will start owning datacenters and creating public cloud offering that it will sell under its own brands? Or are we saying that it will make VMware partner (e.g., Bluelock) offer public cloud IaaS based on VMware technologies? I doubt VMware will become a hosting company and will continue to be a software product organization. So is this strategy more about making the datacenter providers (e.g., vCloud Datacenter) offer public cloud service based on VMware solutions?