VMware's strengths include its partner ecosysytem. But those partners must stare down some risk as VMware itself ventures into hybrid cloud services.
A second partner, PeakColo in Denver, Colo., is even clearer that VMware is now a competitor as well as partner.
CEO Luke Norris acknowledged he "didn't quite understand that statement" that VMware needs to enter the public cloud business in order to understand it and build better products for cloud suppliers. VMware will need to carefully calibrate what it does or lose partners who conclude that "co-opetition" with VMware has descended into outright competition, he said.
"This move, with the lack of messaging and marketing around it, is definitely going to be watched carefully," he said in an interview.
That might happen, for example, if VMware decided it needed to expand its initial four public cloud data centers, adding many more that encroach more directly on partner territories.
Norris also noted uncertainty among VMware partners about whether VMware will maintain its dominant share of customer hypervisor use. If Microsoft's Hyper-V or Red Hat's open source KVM, the first choice of many OpenStack users, appear to be taking market share away from VMware, some partners may gravitate away from a focus on VMware's ESX Server to workloads based on other hypervisors.
Both PeakColo and CSC, another VMware partner, both have multiple hypervisors built into their business plans. VMware's cloud products tend to be oriented exclusively toward ESX Server, he noted.
The stakes are higher for PeakColo than other VMware partners because it converted away from co-location services into becoming a 100% public cloud services provider. It has specialized in serving as a white label host for value-added resellers and managed service providers. By turning to PeakColo, VARs and MSPs can offer their wares under their own brand on PeakColo without needing to build out their own physical infrastructure.
PeakColo has been rapidly expanding its business by catering to VARS and MSPs working with VMware, Cisco, EMC, NetApp and other major suppliers. Peak came up with a way of sharing support responsibilities and crediting each vendor that's involved in an integration deal or cloud stack-build out on its infrastructure. Peak assigns each one credits, which translate into a share of the revenue of the deal.
When they bring their business to Peak, the VAR or MSP is allowed to continue to own the direct customer relationship, even though Peak stands ready to support the VAR or MSP customer on infrastructure issues. For that reason, many VARS and MSP's have gravitated to Peak as a way to transition their businesses into cloud computing. "They're not cutting off their own legs as they do this," Norris noted. Peak's own business is growing at the rate of 100% a year, he said.
Some of this new business could gravitate just as easily into new VMware public cloud data centers as Peak's six facilities in the U.S. VMware has thousands of ISV, VAR and MSP partners of its own. Watching Peak's example, VMware executives must have wondered how much of their business would have gravitated into various public cloud suppliers if VMware itself didn't get into the public cloud business.
VMware has a great opportunity in front of it, if it can maintain a balance between its own interests and those of its partners, said Bluelock's O'Day. VMware's partners are constantly feeding industry expertise and specialized skills into the VMware ecosystem, allowing their customers to use more VMware products. But everyone has reached a point where they need to be able to tap into public cloud services. As a result, VMware "is seeking a little more control over its hybrid cloud destiny," he said.
E2 is the only event of its kind, bringing together business and technology leaders across IT, marketing, and other lines of business looking for new ways to evolve their enterprise applications strategy and transform their organizations to achieve business value. Join us June 17-19 for three days of 40+ conference sessions and workshops across eight tracks and discover the latest insights in enterprise social software, big data and analytics, mobility, cloud, SaaS and APIs, UI/UX and more. Register for E2 Conference Boston today and save $200 off Full Event Passes, $100 off Conference, or get a FREE Keynote + Expo Pass!
Multicloud Infrastructure & Application ManagementEnterprise 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.
Top IT Trends to Watch in Financial ServicesIT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Join us for a roundup of the top stories on InformationWeek.com for the week of September 18, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."