Yesterday was a busy day, lots of announcements I would like to put down my thoughts on the fact the VMware will now get into the Public Cloud market in direct competition with Amazon.
We saw this coming - it started with the vCloud Service that VMware announced about 6 months ago - an open Beta - that actually was not free. In my blog post vCloud Service - I Asked Myself - Why? I explained why I think they started the service.
The Public Cloud market was too big for VMware to pass up. Every second, the sound of pennies/dollars dropping into Amazon’s pockets - is a big temptation. I guess that VMware are looking to grow, looking for new sources of income - and there are two major areas were this can come from.
The first is from the mobile market. VMware have already got a very big foot in the door with their Horizon Suite of products, again they are most probably the market leader in this emerging market. I guess that there main market and that is the hypervisor will continue to bring in business - but will not be their main source of income - as it has been for several years.
The second is the Public Cloud. VMware have been there pretty much since the beginning - you could even say the leader in the market - but not really. There is really only one real Public Cloud company - and that is Amazon. Azure also have their Public Cloud - HP, Rackspace as well. But the most feature rich, the most innovative, the most advanced is AWS - without a doubt.
VMware’s strategy was to enable their partners to compete and build their own Public Clouds, but as I said in the post above - it was not on par with what AWS has to offer. Really not the same.
So what does this mean for the End User?
- Choice. People now have more of a choice where they can spin up a workload - Amazon will no longer be the only significant player in the market. This could start a price war between the two companies - actually already has - AWS has been gradually reducing their prices over the past few months. And if not a price war - then it will be a feature war - take their announcement about VPC for everyone for example.
- Having the same infrastructure in house and the ability to expand to the cloud with the click of a button - without having to go through a lengthy process of signing contract with a provider is a huge plus for the Enterprise. This is a huge win for VMware. IT will find it a bit more difficult to swallow - if Shadow IT was becoming a problem - this opens the floodgates - wide, wide open. It will be even easier to bypass IT resources and control.
- On top the ease of purchase - the fact of having the same infrastructure within my organization and outside is something that Amazon never had - and was always to their disadvantage. I think that is where VMware is going to emphasize their added value. AWS does not have a private cloud solution - they never have, VMware do.
So either Amazon will continue to stress that a Private Cloud is not needed - everything and anything can run on AWS and to ensure that is true they will continue to innovate and try and make that a fact. The other option - Amazon will start to provide a private cloud solution as well. I do not think that this option is likely one - but the only way I see this happening is if they buy a technology that will do this for them.
What does it mean for VMware?
- A chunk of the market. which means more $$$. As soon as the service will be launched - VMware will have customers.
- VMware will now be the ones playing catch up with Amazon. VMware was always the market leader, but now in the Public cloud space - they are going to have to start to catch up, both on market share and on functionality - they are now in second place and will have prove themselves.
- Stepping on their partners toes. This is a big one. They will be going into direct competition with their partners that are already providing a Public cloud to their customers, on vCloud. It remains to be seen how this will fan out. I think that VMware might be burning some bridges here - but I guess the carrot is a lot bigger than the stick.
- Cloud outages are something that happen. the bigger you get the more complex that environment will become. AWS suffers at least 2-4 times a year from a major outage. Public outcry arises immediately there after. If VMware are to become part of that market - they had better be ready to deal with the outcry - because it will also be aimed at them, when it happens. Perhaps I will be pleasantly surprised and we will see a service that is robust and better than AWS. Time will tell.
- A huge initial expense - VMware will have to acquire a large amount of equipment to support this initiative - it will actually be interesting which way they go and who the vendors will be. Multiple locations across the globe, we will soon start to see new VMware datacenters popping up around the world.
- Supporting services - I do not think that current tools and technology that VMware sell to their customers will scale to such dimensions. vCOPS cannot deal with hundred of thousands of VM’s.
vCloud will probably have issues as well. They will need to either improve their products - or use someone else’s solution, which in turn then leads me to think what that will be - and how long it take until VMware acquires that technology.
- Going to a consumer model - they will have to deal with a whole new customer base. The Joe Shmoe’s that want to spin up a VM on the cloud - and get charged for the 20 cents they used. Not the same as selling vCloud Suite licenses to the Enterprise market. Amazon is historically much more geared towards the end consumer. This is something VMware will need to learn. And one more thing - as soon as they do go to such a model, only time will tell what other services they will start to sell - the first thing that comes to mind is the mobile market and Horizon. Again time will tell.
- Differentiating themselves in the market - Someone will have to explain to all those AWS customers - why they should jump ship to VMware - I am not sure that will be easy.
The move has been brewing for a long time within VMware, I remember speaking about this possibility on several occasions over the past year with a number of people in the community and the industry on when VMware would go to a Public Cloud of their own. There were opinions heated discussions, some agreed, some did not.
Yesterday it happened.
To summarize (as I see it).
VMware tried to get vCloud out there, the world was not ready for it, and was certainly not willing to accept a per-VM model - far too expensive. VMware acknowledged that, with the move to the vCloud suite - which brought back the well-known and accepted per-CPU licensing.
The public offering of vCloud started to grow, but not enough, not fast enough. Amazon was growing bigger and better, other clouds were starting to pop up - HP cloud, Rackspace, and they were not based on vCloud. Yes there was adoption of several SP’s that were growing nicely with vCloud but still it was not it.
VMware has made a strategic decision to go head on with AWS (and yes they are the real only competitor that I assume they are targeting) - something that at the moment I cannot foresee how this will play out.
I do think this will be a rough year for the new VMware Hybrid Cloud. They will be taking flak from all sides. They will get kickback (and I assume it will be verbal) from all their Service Provider partners that just got a huge kick in the teeth with announcement.
I am adding to my calendar a reminder to review the subject in 3 months.