The question was raised when the company announced plans "to extend the software-defined data center with a hybrid cloud service offering, and the creation of a new Hybrid Cloud Services business unit."
The initial take is that this move foreshadows a head-to-head battle with public cloud behemoth Amazon.
Perhaps eventually, but it seems more directly aimed at thwarting defections to alternative private/hybrid cloud stacks like OpenStack and Microsoft Hyper-V/Azure, and establishing vCloud as the preferred enterprise hybrid cloud platform. As my InformationWeek colleague Charles Babcock wrote last week, it's unclear whether VMware intends on actually building its own infrastructure or will continue to use, as its press release states, "its existing channel, working with its extensive partner ecosystem."
In either case, by highlighting the term "hybrid" in the service's name, VMware is defending its traditional enterprise customers from Rackspace, Microsoft, HP, IBM and now Oracle, which just announced plans to acquire cloud software innovator, Nimbula, all of which have launched OpenStack-based services that could undermine VMware's dominance, as organizations choose architectures, technologies and suppliers for hybrid cloud deployments.
VMware COO Carl Eschenbach's bluster aside — "I find it really hard to believe that we cannot collectively beat a company that sells books" — it seems clear that the bigger near-term threat to VMware's enterprise cash cow is the OpenStack ecosystem, not a stampede of large companies moving their applications to an entirely cloud-based design at Amazon.
Indeed enterprise private cloud adoption, which is just starting to get traction, could be the type of disruptive event that topples VMware from its perch atop the virtualization food chain. As our InformationWeek private cloud survey found last year, half of respondents have either deployed a private cloud or are starting implementation projects, meaning 2013 is a big year for new adoption. Of those, over two thirds will also be using public cloud services, most of them in a hybrid architecture.
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But unlike hypervisors, where VMware has a lock on enterprise customers, cloud technology is still a fluid market as our respondents building private clouds seem much more open to other technologies. Yes, VMware is on the shopping list for 61% of respondents, but half plan on using Microsoft, 39% Citrix and 19% Red Hat. Throw in HP, IBM, Dell and Oracle, all of which have major cloud software pushes to go along with their hardware offerings, and the competitive playing field seems much less tilted in VMware's direction.
But there's perhaps a bigger reason that the vCloud service poses little immediate threat to Amazon's public cloud juggernaut: it lacks the vast array of add-on services that make AWS so enticing to developers.
For those that haven't been paying attention, AWS is really more a platform than infrastructure. Sure, the catalog is still anchored by the basics like EC2 (compute), S3 (object storage), EBS (block storage) and CloudWatch (resource monitoring), but now totals about three dozen pay-as-you-go products providing everything from elastic load balancing and worldwide content delivery to data warehousing (Redshift), video transcoding (Elastic Transcoder) and application orchestration (CloudFormation).
Need to convert a batch of raw HD MP4 video to a Web-ready format? No need for a high-end workstation when AWS will do an hour's worth for $1.80. Building a mobile-optimized multi-tier application with an asynchronous messaging backend? AWS has you covered with message queuing, notification and workflow products, along with a data pipeline service to create data driven workloads that can schedule and manage big data transfer and processing operations to improve reliability and performance.
Indeed, the comprehensive AWS catalog allows many SaaS startups to develop and deploy entirely in the cloud without a lick of internal infrastructure. Not only isn't this VMware's target customer, it's inconceivable they could replicate such broad functionality without a massive infusion of development resources, acquisition capital and plenty of time. Even mighty Google, which undoubtedly has all that AWS offers, and more, available internally, only offers a mere subset of this functionality in its Cloud Platform.
By contrast, vCloud looks more like just a way to move existing vSphere-based workloads onto someone else's infrastructure.
And we haven't even talked about price yet. While Amazon has historically been tardy at matching its rates to the realities of declining hardware costs, a series of price reductions in the past few months indicate that it is facing up to competitive threats and is ready to wield its economies of scale as needed. Given VMware's late entry into the public cloud market, even considering its stable of large service provider allies, it's hard to see them matching AWS in a price war.
VMware had no choice but to address the coming reality of enterprise hybrid cloud computing with the vCloud service, but make no mistake, it knows its core customer base isn't ready, either technically or emotionally, to embrace AWS-style services for core, mission-critical infrastructure.
No, the clash of cloud titans won't be VMware vs. Amazon, but VMware against the traditional server vendors now aligned in the OpenStack axis.