VMware takes first step in the public cloud space with hybrid cloud offering

Analysis

VMware takes first step in the public cloud space with hybrid cloud offering

Archana Venkatraman

VMware chief executive Pat Gelsinger has told investors the company will launch a hybrid cloud service later this year to help its 480,000 customers “reap the benefits of the public cloud without changing their existing applications”.

He said the hybrid service, based on VMware vCloud suite, is part of the company's strategy to bolster its software-defined datacentre plans. But analysts think it is part of VMware’s move to capture the public cloud market and compete with public infrastructure as a service (IaaS) providers, including Amazon Web Services (AWS) and Rackspace.

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“If we look at the IaaS announcement, VMware is trying to have greater control of the ‘choice’ its customers get,” said Gartner research vice-president Chris Wolf in a blog.

Choice will mean a VMware-hosted offering that, in theory, will make it easy for customers to move VMware-based workloads in and out of the public cloud, he said.

“The aim is an inside-out approach where workloads between a private datacentre and a public cloud operate seamlessly,” said Wolf.

One of the biggest problems of the public cloud today is the lack of interoperability between workloads and applications. This means users cannot move applications from a private cloud to a public cloud or vice versa when needed.

VMware is making the new vCloud Hybrid Service available through its existing channel network and will work with its partner ecosystem to accelerate customers’ journeys to the cloud. To this effect, the company has created a new Hybrid Cloud Services business unit, and has appointed cloud services veteran Bill Fathers as senior vice-president and general manager.

“Bill understands how to drive adoption of enterprise cloud services and has a clear vision to build and strengthen our newly formed Hybrid Cloud Services business unit,” said Gelsinger.

Experts believe a full standalone public cloud offering will be delivered to VMware customers through the new business unit.

According to Forrester analyst James Staten, VMware's full public IaaS cloud will compete with AWS, HP Cloud, IBM SmartCloud and Rackspace.

“VMware is calling the service ‘hybrid’ to set expectations about how enterprises should view the solution and to reinforce its claims about vCloud Director, the software upon which this offering is based,” he said.

The second reason for the hybrid label is to prove to its loyal certified professionals that “the public cloud isn't the enemy, but is instead an extension of the datacentre, but one that is different from the static virtualisation environments they operate today”, added Staten. 

Reports about VMware’s public cloud strategy have been doing the rounds since last year, but until this announcement VMware had not confirmed them.

The aim is an inside-out approach where workloads between a private datacentre and a public cloud operate seamlessly

Chris Wolf, Gartner

When Computer Weekly asked VMware’s chief cloud technologist Joe Baguley about its public cloud plans at the Cloud Expo in January, he said: “We will have some cloud-based announcement towards the end of this quarter or early next.” But he did not deny or confirm the public cloud plans.

“Enterprise adoption of cloud services is ramping exponentially, and VMware is uniquely positioned to deliver on the promise of hybrid cloud,” said Fathers.

VMware’s public cloud roadmap full of challenges

But VMware’s public cloud strategy could be fraught with challenges, and it will need to show value quickly to gain momentum, according to experts.

One of the company’s biggest challenges in the public cloud space will be to differentiate. “If VMware is the ‘enterprise alternative’ to Amazon, it had better launch its IaaS solution with enterprise features,” said Wolf.

“In addition, it must offer serious tools for developers. The time for VMware to show the results of its investment in Puppet Labs should be when the public IaaS offering launches. Otherwise, Amazon and other providers will continue to win on features and the ease of experience that developers have on its platform,” he warned.

Another bottleneck to virtual machine (VM) mobility in the cloud is software licensing. “VMware can’t control the licences of the software that runs in its VMs, but it must make it easier for customers to license VMware management software in a hybrid cloud environment and allow licences to move with VMs between cloud environments,” Wolf advised.

Another challenge identified by experts was channel-related, as the service will be offered via its channel partners. 

Its partners will have to get with the cloud programme too, but many don't see more revenue at the end of the public cloud rainbow, said Staten. 

“Most channel partners don't have the skills or the trust level to help their customers move from static virtualisation to cloud – that's a culture change more than a product they can sell them. This requires consulting skills and real cloud experience, and most VMware partners don't have either,” he said.

But as the virtualisation market saturates, becoming a cloud IaaS provider is a move that VMware had to make, said experts. Microsoft is taking the same approach with Azure.

“VMware was losing cloud mindshare to its competitors, and its only choice to keep up with their rapid innovation pace was to be a provider itself,” said Wolf.

There is certainly an opportunity, but as a late entrant to the IaaS sphere, VMware success is far from guaranteed,” he said.

Gartner analyst Kyle Hilgendorf said: “VMware entering the public cloud IaaS market isn't bad news for AWS.”

It is tough news for second-tier cloud service providers such as RAX, Savvis (which was previously headed by Bill Fathers), TMRK and CSC, he said.

“Until I see more, I'll have to assume VMware will be years behind AWS. I hope not, but it’s hard to launch a new offering at AWS level today.”

VMware’s other priorities for 2013

In addition to its cloud strategy, Gelsinger outlined the company’s software-defined datacentre and IT consumerisation strategy to its investors.

To bolster its software-defined datacentre strategy, the company is merging the VMware vCloud Networking and Security product line with the Nicira Network Virtualization Platform (NVP) into a single product family based on a common technology foundation, to be named VMware NSX. The company acquired Nicira last year to enter the software-defined networking segment.

VMware NSX will work across VMware and non-VMware hypervisors and cloud management systems, as well as any underlying networking hardware, said Gelsinger.  

In relation to IT consumerisation, the chief executive said the newly released VMware Horizon Suite will help customers meet the needs of an increasingly mobile workforce without sacrificing control and security.


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