Analysis

Can VMware capture the cloud with its software-defined datacentre strategy?

Archana Venkatraman

After capturing the server virtualisation market, VMware is eyeing the cloud market with its software-defined datacentre (SDDC) technology which, it says, can be evolved into a hybrid cloud to deliver IT as a service. Will its strategy help it capture the cloud market currently dominated by public cloud behemoths such as Amazon, Microsoft and Google?

“Our customers have saved $10bn in server virtualisation alone in 2012. If they automate and virtualise their entire datacentre, this saving can be increased by at least six-fold or up to $70bn,” said Joe Baguley, VMware’s chief technologist for EMEA at the annual VMware Forum 2013.

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According to Baguley, enterprise IT’s future lies in delivering everything as a service and a software-defined datacentre is the first step in doing that.

A software-defined datacentre is one where the entire infrastructure (server, storage and networking products) is virtualised, automated and managed by software.

It is essentially a private cloud set-up and enterprises can then shift selected workloads to a public cloud and have a hybrid cloud infrastructure where they can move applications and workloads back and forth for interoperability and efficiency.

“VMware is essentially having an inside-out approach – that is, urging users to develop a private cloud and then move to a hybrid model – and that is the only way it can do it,” said Roy Illsley, cloud computing and virtualisation analyst at Ovum.

“But I am seeing a big change in VMware’s attitude in the cloud era and that is what is going to help it survive in this era,” Illsley said.

According to Illsley, VMware has become “open” to other technologies and service providers. For instance, it has become a contributing member to open source cloud platform OpenStack. VMware’s vCloud Suite includes support for all private and existing public cloud set-ups and its hypervisor management suite includes support for hypervisors other than its own vSphere platform.  

“One of our key principles is to remain open, to help customers reach out to public cloud, support mobile devices and even open source technologies such as Hadoop and Openstack,” Baguley said.

“It probably realises that it cannot ignore other technologies in the cloud age like it did in the virtualisation age and hence it has started building support for other vendors and technologies in its tools,” Illsley said.

“Otherwise, VMware would have become the Oracle of its time.”

Selling the software-defined datacentre vision

According to Baguley, having just server virtualisation is not enough in transforming IT. “In the new world of IT, silos should not exist. Everything including servers, network infrastructure and storage must be virtualised and automated,” Baguley said.

“But the problem with today’s IT is that silos still exist. AWS is a silo, Windows is a silo.”

Illsley thinks this is part of the company’s changed ideology. “VMware itself is known to have created silos in the enterprise infrastructure by not supporting other server virtualisation platforms,” he said.

But he is also sceptical about the change. VMware became a member of Openstack only by virtue of its acquisition of Nicira, a networking supplier and a member of Openstack.

“It will be interesting to see if VMware actually becomes the platinum sponsor of Openstack and sees value in it. That will be a real change in making them relevant in today’s times.”

Currently VMware is pushing the enterprise benefits of having a software-defined datacentre and showing customers the vision of extending this automated datacentre to the cloud seamlessly.  

It is offering customers a choice: they can either use a traditional approach of individually virtualising other elements of the infrastructure (such as network and storage) to evolve their datacentre; or they can simply buy vCloud Suite licence – which includes all the SDDC components – and adopt a hybrid cloud.

Many who have adopted VMware’s SDDC strategy say they are  seeing the benefits. For instance, cosmetic company Revlon has saved $70.4m in expenditure with VMware infrastructure. “We have transformed IT with SDDC. VMware is core to our cloud infrastructure and has saved us money which can be used to grow the business,” said Revlon CIO David Giambruno.

And VMware has some statistics to prove that its strategy is working. “A majority of workloads on G-cloud and public cloud run on VMware,” Baguley said. He also quoted a Gartner report which estimated that, by 2016, 45% of cloud users will use a hybrid cloud.

In 2012, VMware grew 22% to $4.61bn. “Our sales and revenues increased last year and, while virtualisation is still a major contributor, sale and revenue from our cloud division is accelerating at a faster rate than other divisions,” David Parry Jones, UK regional director at VMware, told Computer Weekly.  

“In the cloud market, we see Amazon as the leader in public cloud and VMware as the leader in private cloud and hybrid cloud is everyone’s playground,” Parry Jones said.

In March, VMware chief executive Pat Gelsinger announced 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,. VMware also created a Hybrid Cloud Services business unit.

While the company remains tight-lipped about the cloud service, Gelsinger is likely to share the finer details of the service later this month, on 21 May 2013.

Experts believe a full standalone public cloud offering will be delivered to VMware customers through the new business unit, which will be VMware’s move to compete with public infrastructure as a service (IaaS) providers, including Amazon Web Services (AWS) and Rackspace.

“VMware definitely has a place in the cloud world but there is no denying that it is a late entrant and is playing catch-up,” Illsley said, adding that VMware needs to iron out a few more details in its cloud strategy. 

“One pillar missing in its strategy which includes software-defined datacentre, hybrid cloud and mobility is a tool for orchestration and management and that is quite important for enterprises,” he concluded.


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