VMware's new CEO Pat Gelsinger said in a press conference last week at VMworld 2012, VMware's user group meeting in San Francisco, that VMware, Microsoft, and OpenStack open source code vendors are all offering business data centers a "private cloud in a box."

Unlike Microsoft, however, VMware is preparing for a world of multivendor clouds where customers wish to move across environments with different workloads. Its acquisition of network virtualization startup Nicira for $1.26 billion is aimed at giving VMware customers the ability to move from their internal private clouds out to Amazon Web Services, Rackspace, Google Compute Engine, or other public clouds, including OpenStack-based clouds.

"Everybody knows now you can't compete with Microsoft on price. You compete with Microsoft on value," said Paul Maritz, the outgoing CEO of VMware at VMworld's opening. Maritz became chief strategy officer of VMware's parent company EMC on Sept. 1.

At a press conference shared with Maritz, Gelsinger said it's his belief that most companies will get acquainted with public clouds and use them for limited, low-risk workloads. But what they really want is a public cloud-like infrastructure in their own data centers.

As Microsoft builds out its Azure cloud data centers to work with Windows Server 2012 on premises, VMware is building out an ecosystem of public cloud suppliers that offer compatibility with its VMware workloads. There are 8,500 such suppliers, many of them small, regional services, said Steve Herrod, VMware CTO, during VMworld's opening day keynote.

VMware has commissioned a handful as its top-tier suppliers using vCloud Suite with data centers around the world. They include BlueLock, Dell, CSC, and AT&T in the U.S.; Singtel in Singapore; Softbank in Japan; and Colt and Deutsch Telekom's T-Systems unit in several European countries. CSC, Dell, and T-Systems are new additions to the top-tier suppliers.

Microsoft claims its approach to the cloud, both private and public, is five times less expensive than VMware's. VMware, in turn, says its data center-wide and cross-vendor point of view will be less expensive in the long run, when customers are serious about using both public and private clouds.

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