Cloud // Infrastructure as a Service
Commentary
3/14/2013
03:21 AM
Charles Babcock
Charles Babcock
Commentary
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Will VMware Challenge Amazon Head On?

VMware announces Hybrid Cloud Services unit. Does that mean VMware IaaS, competing directly with Amazon, or continued reliance on partners?

VMware told Wall Street analysts Wednesday that it is launching an approach to hybrid cloud computing that will enable its customers to use their VMware-based data center environments in conjunction with infrastructure-as-a-service providers in the public cloud.

In VMware's view, its virtualization management console will be the command post for both sets of workloads and will allow movement out to the cloud and back again. Before such a situation can become a reality, however, VMware must move further down the road to virtualized networks that act as an integral part of a software-defined data center.

A key building block for that, VMware CEO Pat Gelsinger said in an analyst briefing Wednesday, will be the Nicira Network Virtualization Platform, an OpenFlow-based approach to networking that VMware obtained with its $1.26 billion acquisition of startup Nicira last year. Nicira NVP will become VMware NSX as it's combined with VMware's vCloud Network and Security product line. The move will get VMware out of a proprietary rut of managing primarily VMware resources and give it a neutral networking platform from which it can deal with Red Hat KVM, open source Xen and Microsoft's Hyper-V, which are starting to occupy more of the data center.

VMware's vision for the future is that when a network fits the needs of a virtual machine, it can be assigned to the VM as the VM is created. In the future data center, that network will follow the VM around as it's moved from point to point, much as storage does in the current VMware vSphere environment. Security specifications will have to move the same way.

[ Want to learn more about what Pat Gelsinger recently told his partners? See VMware CEO Causes Public Cloud Stir. ]

By virtualizing the network, NSX "will allow customers to accelerate application deployment, lower both capital and operational costs, and transform network operations," said a company statement on the launch of NSX. It will also bring closer the day of hybrid operations, where part of the enterprise software runs internally and another part runs on a public infrastructure provider. Management techniques such as vMotion, where a running virtual machine is transplanted from one location to another without interrupting users, are in a pre-cloud stage today. But they could work across clouds in the future.

VMware's vCloud Hybrid Service will launch in the second quarter. It will allow customers "to reap the benefits of the public cloud without changing their existing applications while using a common management, orchestration, networking and security model," the VMware announcement said Wednesday.

Meanwhile, a debate broke out over whether VMware's statements mean it will launch its own public cloud service in the second quarter or continue to work with a broad set of partners who run their own public cloud data centers. Cloud expert James Staten, a Forrester Research analyst, explained it this way: vCloud Hybrid Service equals "VMware's public cloud service -- yep, a full public IaaS cloud meant to compete with AWS, IBM SmartCloud and HP Cloud, Rackspace. (It) won't be fully unveiled until Q2 2013, so much of the details about the service remain under wraps."

CRN, a sister publication to InformationWeek, and others interpreted the announcements as a sign of VMware's intent to plunge into infrastructure as a service based on its own software with its own data centers. But VMware maintained it will make vCloud Hybrid Service available "through its existing channel, working with its extensive partner ecosystem."

Thus far, VMware's own statements have stopped short of announcing such a service direct from VMware.

The dilemma for VMware is that Amazon is driving public cloud pricing down as VMware tries to bring up an extensive network of vCloud Director suppliers. It has primary suppliers, such as Dell, CSC and Bluelock in the U.S. and Colt in Europe, plus a long list of 175 regional suppliers." But in many instances, customers are not viewing them as the same bargain basement service provider that they find with Amazon, or for that matter, Rackspace, Google or Microsoft.

Gelsinger's recent urging of the ecosystem to take up arms against the growing presence of Amazon struck many observers as a sense of heightened competition.

Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Threaded  |  Newest First  |  Oldest First
Laurianne
50%
50%
Laurianne,
User Rank: Author
3/14/2013 | 4:17:04 PM
re: Will VMware Challenge Amazon Head On?
It will be interesting to see which Intel ecosystem lessons Gelsinger applies here. And to see how he chooses to compete with Amazon on cost.

Laurianne McLaughlin
InformationWeek
timwessels
50%
50%
timwessels,
User Rank: Apprentice
3/14/2013 | 5:25:47 PM
re: Will VMware Challenge Amazon Head On?
Well, yet another really excellent piece of tech writing from Mr. Babcock. VMware going head-to-head with AWS seems very unlikely. AWS is the gold standard for running Web-scale applications as inexpensively as possible. VMware is the gold standard for virtualizing legacy apps in enterprise data centers as expensively as possible. Their business models are fundamentally different. The friction comes as a result of AWS constantly introducing new services and lowering prices while actively soliciting enterprise cloud-era application workloads. VMware has had nothing to offer their customers, other than to point them to their vCloud partners. 175 vCloud partners do not equal AWS so VMware will have to do some heavy lifting. VMware is not interested in competing with AWS on price. It is interested in moving the legacy application workloads running in VMware virtualized enterprise data centers to its own VMware hybrid cloud service and hope that those customers will eventually build and run their cloud-era application workloads there too. The Nicira SDN technology will play in large VMware virtualized data center environments and in the VMware hybrid cloud. The DynamicOps technology will allow VMware to orchestrate more than just VMware environments. None of this will be offered at low cost to VMware's customers. The VMware hybrid cloud announcement is as much about keeping VMware's customers locked-in and the revenue stream flowing, as it is about the technology being deployed.
Andrew Binstock
50%
50%
Andrew Binstock,
User Rank: Author
3/15/2013 | 8:02:10 PM
re: Will VMware Challenge Amazon Head On?
Agreed, another great piece by Charlie. You wrote "VMware going head-to-head with AWS seems very unlikely." I agree that they won't make an obvious us vs. them play, but in all other respects, I think they have to go head-to-head with AWS, but not as you suggest. Their best chance, IMHO, is to convince companies that private/in-house clouds are better than using public clouds. This tack will work for fin svs and some highly regulated industries. But eventually, I expect, the tide will flow towards public clouds. Not quickly, but inexorably.
cbabcock
50%
50%
cbabcock,
User Rank: Strategist
3/14/2013 | 9:41:21 PM
re: Will VMware Challenge Amazon Head On?
Yes, DynamicOps is a cross-hypervisor technology that VMware acquired and that fits its hybrid cloud strategy. Good point by Tim Wessels. From my perspective, VMware has different, major constituencies: its customer base, in its partner ecosystem and on Wall Street. It can't say (and isn't saying) different things to each. But when it's stock is down and it addresses Wall Street analysts, you should expect VMware to say it has a brilliant cloud strategy and will have no problem coping with Amazon and other cloud vendors. Remember, its comments on hybrid cloud followed its projection that it will grow revenues faster next year (20%) and the years thereafter than it is this year. And it will do so in an expanding cloud market. It made a bold case, and in two days the stock has gained back 12% of the 20% value that it lost after its fourth quarter earnings report in January. Mission accomplished, as our fearless leader used to say. But it has yet to really explain what VMware Hybrid Cloud Service is or what the Pivotal Initiative will do. There's a wide range of opinion on what Jim Gelsinger's remarks mean. Why clarify when the stock is moving upside? Charlie Babcock, InformationWeek
Frankinca
50%
50%
Frankinca,
User Rank: Apprentice
3/19/2013 | 11:26:08 AM
re: Will VMware Challenge Amazon Head On?
Thanks for the article. I am a fledgling business software provider and recommender. As a contractor to a group of dentists nearby who have common and separate data distribution needs, a hybrid cloud scheme is the answer. Have worked with virtual at desktop level, can now see how it can be applied at the cloud or universe level. Articles like these wake me up to the future and the possibilities of providing a superior IT capability to my dental group. I am going to follow VMware's business services closely and would like to be a test bed for their new cloud products. Are you listening VMware?
timwessels
50%
50%
timwessels,
User Rank: Apprentice
3/19/2013 | 7:19:19 PM
re: Will VMware Challenge Amazon Head On?
Well, now that the VMware vCloud Hybrid Service has been formally announced, it is interesting to see what it is not. Mr. Gelsinger said that VMware is not building infrastructure to host the service and will continue to rely on its vCloud partner network of providers to deliver the service in cooperation with VMware. This is a far cry from VMware going head-to-head with AWS or announcing a plan to build its own data centers to deliver the service. I agree that VMware needed to make some bold announcement to re-inflate its stock price after seeing its value decline by 22% in one day, but vCloud Hybrid Service hardly looks like the "AWS killer" announcement everyone was expecting.
lleblanc951
50%
50%
lleblanc951,
User Rank: Apprentice
3/16/2013 | 1:18:09 AM
re: Will VMware Challenge Amazon Head On?
For VMware customers who want the flexibility to manage hybrid on and off-premise resources that includes Amazon EC2, they should check out the VMware Ready HotLink Hybrid Express (www.hotlink.com). It extends VMware vCenter to natively manage Amazon EC2 resources including cross platform administration, cloning, snapshots, templates, migration and bi-directional workload conversion. It won Best of Show at VMworld 2012.
Shawn Douglass
50%
50%
Shawn Douglass,
User Rank: Apprentice
3/20/2013 | 8:29:52 PM
re: Will VMware Challenge Amazon Head On?
From security and governance policies that follow entire application stacks to cloud portable services, the technology VMware is talking about as a future has been offered by at least one cloud management platform for a while now. However, a fight over IaaS is not a fruitful place to be without a discussion about how it supports the strategic endgame of increased business agility, faster time to innovation while decreasing operational costs. For a view of CMPs:
http://bigfatfinanceblog.com/2...
- Shawn Douglass, CTO, ServiceMesh
Multicloud Infrastructure & Application Management
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.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July10, 2014
When selecting servers to support analytics, consider data center capacity, storage, and computational intensity.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join InformationWeek’s Lorna Garey and Mike Healey, president of Yeoman Technology Group, an engineering and research firm focused on maximizing technology investments, to discuss the right way to go digital.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.