5 Unanswered Questions About VMware's Hybrid Cloud Service12:00 PM EST Wed. Mar. 20, 2013
VMware's vCloud Hybrid Service, slated for launch in June, is designed as a way for customers to move private cloud workloads to the public cloud in a way that's palatable to enterprises. The service brings VMware's management, orchestration, networking and security model to the wilds of the public cloud, and the vendor hopes customers will gravitate to it as a "safer" alternative to Amazon.
While not an Amazon killer per se, vCloud Hybrid Service is VMware's bid to carve out space in a marketplace it has addressed exclusively through its partners. VMware has good reason to tread carefully, as it has spent the past several years building a partner ecosystem to deliver public cloud services, and would presumably want to keep that intact.
Last week's revelation looks like a major change in strategy, but VMware executives tiptoed around the most poignant questions. Following are five unanswered questions that are most pressing for the vendor's partners at the moment.
VMware executives have made it clear that vCloud Hybrid Service will be provided by VMware. Does that mean VMware -- which has been a software vendor from day one -- is going to start building data centers to run it?
CEO Pat Gelsinger (pictured) told The Wall Street Journal last week that VMware will run the service using partners' data centers. OK, which ones? VMware currently has 211 service providers offering vCloud services in 31 countries, so there are plenty of candidates.
It's also possible VMware could be building a subset of the infrastructure for vCloud Hybrid Service, like a test environment to show how it all works. Last August, when CRN first reported the existence of an IaaS-related initiative code-named Project Zephyr, sources said VMware had purchased a large amount of data center space in Nevada and was using it to run the service.
VMware isn't yet talking about pricing for vCloud Hybrid Service, other than to say it's planning to offer a fixed-capacity model and a variable consumption model. VMware is going to have to offer aggressive pricing in order to keep customers from succumbing to the low-cost wiles of Amazon, but VMware -- which has long billed itself as a "Cadillac" in the virtualization market -- doesn't want to set off a price war, either, as doing so could have a ripple effect on partners' pricing. In last week's meeting with investors, VMware COO and Co-President Carl Eschenbach engaged in some verbal gymnastics while explaining that the vendor is still working through pricing options. "We think we will be price-competitive with other, if you will, providers out there," he said.
Was Eschenbach talking about that company that sells books, perhaps?
In last week's meeting with Wall Street investors, Eschenbach (pictured) went to great lengths to paint vCloud Hybrid Service as a channel-friendly offering. "We're not going to do it alone," he said at the event. "We think it's critical for VMware and partners to bring this to market together."
VMware plans to offer a vCloud Hybrid Service SKU through distribution that partners can sell, and it's also planning to let partners handle billing and invoicing for the service. This latter point is hugely important to the channel, as Microsoft -- which only recently began letting its partners do this -- can attest.
VMware also plans to share its vCloud Hybrid Service intellectual property with service provider partners. No word yet on what VMware will charge for this, but it looks like a move calculated to keep these partners from getting peeved about VMware's entry to public cloud IaaS.
VMware says it will sell vCloud Hybrid Service through its channel partners. According to a blog post last week from Forrester analyst James Staten, many VMware partners "don't see more revenue at the end of the public cloud rainbow" and lack the expertise to help customers to make the transition from virtualized infrastructure to cloud computing.
"This requires consulting skills and real cloud experience, and most VMware partners don't have either," Staten said in the blog post. Larger service providers will have no problem making the switch. But if VMware wants its solution provider partners to get on board with its hybrid cloud vision, it will need to step up with training and enablement aimed at helping them make the transition.
VMware has created a new business unit, called Hybrid Cloud Services, and hired former Savvis President Bill Fathers to lead it. Fathers, who stepped down as Savvis' president in November, brings "deep ecosystem expertise from his years building partnerships across service provider, ISV and system integrator communities," VMware said in a press release announcing his appointment.
If VMware's public cloud IaaS is really run through partners, which ones will be granted the privilege? And what about the potential for channel conflict? These and other issues will be up to Fathers to work out on day one. It's a good thing he's got such deep experience in building ecosystems, because he's going to need it.