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Charles Babcock
Charles Babcock
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VMware CEO Causes Public Cloud Stir

Pat Gelsinger asserts VMware ecosystem must capture customers before public cloud does. Will this be his Mitt Romney 47% moment?

Ever since the Amazon cloud and its competitors took shape beginning in 2006, it has been an open question: Would the enterprise's use of cloud technology grow up from inside the data center, then proceed to a similar environment outside? Or would the public cloud architecture prevail and be imposed on commercial data centers?

These two models originated in different places. Google and Amazon offered the clearest examples of what scale-out architecture could look like. Compared to the typical enterprise, the Amazon model looked simple, uniform, highly automated and highly elastic -- more virtual servers could be added on command for a given workload, or physical servers could be added to the cloud's cluster itself, as needed. The fact that search and online retailing consisted of a few high-powered applications, designed to scale out, helped. They posed a completely different set of requirements than needed by the typical mixed-use enterprise.

Nevertheless, the new architecture appeared to offer an infinite capacity to expand; it could distribute seemingly endless amounts of compute cycles to a business or consumer. That was one of the distinguishing features of the cloud, along with its on-demand delivery and competitive pricing, compared to hosted services or other forms of outsourcing.

So why, then, would VMware CEO Pat Gelsinger sound so dead set against the public cloud model in his remarks to partners at VMware's Partner Exchange Conference in Las Vegas Feb. 27, as reported by InformationWeek's sister publication CRN. "We want to own the corporate workload," said Gelsinger. "We all lose if they end up in these commodity public clouds. We want to extend our franchise from the private cloud into the public cloud and uniquely enable our customers with the benefits of both. Own the corporate workload now and forever."

[ Want to learn more about VMware's tricky relationship with cloud? See VMware Earnings, Examined. ]

In saying VMware wants to "own the corporate workload," Gelsinger isn't disclosing anything new or particularly surprising. VMware has made it clear that it wishes to virtualize and manage all corporate workloads in the enterprise data center as part of its plan for the data center of the future. Given a chance to supply more context through a transcript or to modify the exact quote, VMware spokesmen have declined to do so. So Gelsinger's words have to stand as noted. What's different about them is the opposition to public clouds that don't bear the VMware label.

As Gelsinger's comments were aired, Forrester analyst James Staten and other cloud gurus pointed out that Gelsinger was saying VMware wants to prevent the enterprise from placing its application workloads in a commodity public cloud environment, such as Amazon Web Services. Its competitors have assumed as much, and feared VMware's growing power. But Staten said Gelsinger had taken the unusual step of "demonizing" public clouds.

Until now, VMware executives have been more circumspect. They have taken pains to say it won't be an all-VMware world, even if they'd like it to be, and they have plans to reach out to the non-VMware parts of it.

VMware's main public cloud play was to encourage some public cloud providers, such as Bluelock and CSC in the United States, Singtel in Singapore or Softbank in Japan, to be close partners. They could host VMware-based enterprise workloads in their public clouds, using a VMware cloud stack.

VMware has also made gestures toward supporting other public cloud providers. These have been half-hearted, such as supporting the OVF format from the DMTF standards body, which allows VMware workloads to be imported from ESX Server into Microsoft, Citrix Systems, Amazon Web Services and other environments. But VMware has refused to stand in the way of cooperation, until now.

However, VMware partners such as Softbank in Japan, Colt in Europe and Bluelock in the U.S. are not taking market share at the rate of Amazon Web Services. Amazon has many competitors but no equals, and it's unlikely to have a peer anytime soon.

The VMware strategy was only working for a few VMware customers, who agreed to play on the reservation, and it may have been this fact that prompted Gelsinger's comments. Customers are ready for the cloud before VMware's vCloud Director suite seems to be ready to provide it.

The ability to expand the service supplied on demand is one key feature. According to Randy Bias, a respected voice in cloud computing, VMware shields its cloud services' APIs from public view. It puts an easy-to-use front end on them, but the APIs behind them can be changed to not work as before, leaving customers who want to manage the connection on their own in the dark.

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Andrew Binstock
Andrew Binstock,
User Rank: Author
3/6/2013 | 7:04:35 AM
re: VMware CEO Causes Public Cloud Stir
Excellent article. This is a real problem for VMware. So, now that they can see the writing on the wall, can they innovate their way out of this?
Andrew Hornback
Andrew Hornback,
User Rank: Apprentice
3/6/2013 | 4:04:35 AM
re: VMware CEO Causes Public Cloud Stir
If that's the prevailing attitude at VMware (and I'm not quite sure that it is), I think they just downshifted from being a Windows-type commodity to being an OS/2-type commodity in that it'll get the job done and do it well in a very few specific roles in the future, but it won't grow beyond that niche once caught and surpassed by other technologies.

Come to think of it, isn't this similar to the same mindset that Apple corporate had in the late 80s? History repeating...

Andrew Hornback
InformationWeek Contributor
User Rank: Strategist
3/6/2013 | 2:48:16 AM
re: VMware CEO Causes Public Cloud Stir
Yes, VMware should embrace emerging public cloud infrastructure, It has shown a willingness to do so in the past. Gelsinger's comments at the Partner Exchange were out of character for a company that just joined OpenStack and pledged to continue to contribute code to OpenStack. Depends on who you believe in what setting. I think he made partisan comments to a partisan group. Think Mitt Romney at a rally during the primaries.
User Rank: Apprentice
3/6/2013 | 1:07:56 AM
re: VMware CEO Causes Public Cloud Stir
Charlie, it seems like VMWare is trying to build a lead by protecting the one it has, and while on one level that's understandable, it really feels like short-term thinking. That's too bad. For customers and them.
User Rank: Apprentice
3/5/2013 | 8:11:37 PM
re: VMware CEO Causes Public Cloud Stir
If anything, VMware should embrace the established and emerging public cloud infrastructures. VMware can capitalize on the IaaS market as their main business focus at this point in time is the embedded hypervisor. The VMware vSphere Hypervisor (ESXi) can be utilized on platforms such as Amazon Web Services (namely, the EC2), Microsoft Azure and even the IBM SmartCloud. The only real problem at this point lies in the fact that next to the PaaS market, the IaaS market is the second smallest.

The SaaS market is currently the largest sector of cloud computing, which is the main problem, aside from direct competitors like MicrosoftG«÷s System Center 2012 with Hyper-V or IBM WebSphere Application Server. Gartner just released a report on growing cloud trends which reflects that this will continue to be the case through 2016, at the very least. VMwareG«÷s products help the mainframe on which they are installed run like a well-oiled machine. The key to maintaining an edge over the rest of the market isnG«÷t in design or functionality G«Ű the problem is in business.

The SaaS market wonG«÷t be toppled, so finding a way to play nice with these services is crucial for companies like VMware. Hosted services like Google Apps have major appeal as do other business focused SaaS products, like those created for major organizations like TeamLeader (made in the SaaS Maker environment) used by NASA. VMware needs to find a way to become the preferred utility for infrastructure management on these environments where SaaS applications are hosted. Though chances are slim Google will adopt VMware, this will be a major component in sustaining profitability for years to come.
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Multicloud Infrastructure & Application Management
Enterprise cloud adoption has evolved to the point where hybrid public/private cloud designs and use of multiple providers is common. Who among us has mastered provisioning resources in different clouds; allocating the right resources to each application; assigning applications to the "best" cloud provider based on performance or reliability requirements.
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