• 03/29/2013
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As The PayPal Vs. VMware Story Turns

PayPal is adopting OpenStack for its cloud infrastructure, but it's not necessarily dumping VMware for virtualization infrastructure. Here are some conclusions from this saga.
If you combine that obvious statement of support for VMware with comments from Mirantis CEO Adrian Ionel, you get a fuller picture. Ionel told IT Pro that Renski was "exaggerating the use case" of OpenStack at PayPal and that Renski's "knowledge of the project is secondhand and therefore limited."

Renski is an outspoken founder and executive VP at Mirantis and would have had a hand in hiring Ionel. You can imagine the tensions between Mirantis and its consulting client PayPal if Ionel is now issuing statements of this sort. But Renski's statements, describing PayPal's intentions when PayPal was unwilling to do so itself, hurt a PayPal business partner. For whatever reason, PayPal chose to stand by VMware. There was little else Ionel could have done besides countermand some of Renski's statements.

Renski, the last time I contacted him, was exercising a self-imposed gag order.

Which leaves me with two conclusions: It's a mistake to think VMware will not find ways to work with modern cloud services, especially OpenStack. That's true despite VMware COO Carl Eschenbach's intemperate remarks about the need for VMware partners to beat "a company that sells books." As Amazon CTO Werner Vogels tweeted afterward, as long as competitors believe that's all Amazon does, Amazon Web Services "will be fine."

VMware knows the public cloud is here to stay and is busy not only competing with it but accommodating itself to it as well, hence, its membership in OpenStack, support for the OVF format and ability to send workloads to EC2.

Second, Wall Street's and investors' ongoing confidence in VMware is shaky. Wall Street analysts don't have a deep understanding of virtualization or how central a role it will play in the data center of the future. Wall Street wonders if VMware's version of it is somehow now outdated. VMware stock suffered a similar plunge as it came out of its fourth-quarter earnings call, having missed analyst expectations on revenue growth. VMware has been and remains a results company. It got to where it is by providing software that ushered in both savings and a new era of managed, virtualized resources. It's still tuning up its approach to the next era, the era of mixed public and private cloud resources, but it's much too early to dismiss VMware.

And if I can add a third conclusion, it's that a sense of militant support on behalf of OpenStack is going to lead to momentary unsupported claims or reality distortions. Partisans are necessary to battle forward against opposition, but OpenStack is so broadly accepted that it's time to start guarding against any exaggerated claims being made for it.

Renski, you may remember, was the member of the OpenStack board of directors who voted against the admission of VMware to the board on the grounds that its proprietary interests were inimical to those of the project's. I disagree with that vote, but I respect someone who states his conviction -- plausible under the circumstances -- and acts on it. It is good, in my opinion, to have a critical, watchdog personality on the project's board.

On the other hand, I wouldn't turn to Renski for advice on whether to invest in VMware. I wouldn't even turn to him for advice on an OpenStack company. Cloud users are sorting out for themselves how they will operate in house versus how they will connect to the cloud. PayPal is one of those large Internet companies that will lead the way, but the uniform, online nature of its digitized services makes it a different case than the typical, mixed-application enterprise.

Much work remains to be done before anyone can be declared a winner or loser in the new hybrid cloud era. The customers paying the bills will invest little energy in who wins debates at this early stage, but plenty of energy with the parties willing to help them map the way.

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