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To VMware's service provider partners that have made large cloud investments to deliver hosted services to customers, the vendor's move to build a public cloud infrastructure-as-a-service offering is not a welcome development.
"We're in a state of shock," said one executive at a VMware service provider partner, who asked not to be identified. "VMware has been working closely with service providers on vCloud Director, including helping us with channel marketing. For them to turn around and do this would be bizarre."
Other VMware service providers reached by CRN Thursday declined to comment due to fear of repercussions.
VMware did not respond to a request for comment on the concerns its service provider partners have with the move, dubbed Project Zephyr.
As first reported by CRN Wednesday, VMware has bought a large chunk of data center space for Project Zephyr, which it is using both as a showcase for its cloud software stack and as the basis for a forthcoming IaaS service that will compete with Amazon Web Services, Microsoft Azure and Google Compute Engine.
VMware has been talking for the last two years about the benefits of getting its traditional infrastructure partners to work with service providers, but Project Zephyr, on the surface at least, looks like an acknowledgement that this is not happening quickly enough.
[Related: VMware's 'Project Zephyr' Challenges Amazon, Microsoft In Public Cloud Battle]
VMware's stance has been that traditional partners could steer their customers to public cloud service providers and collect referral fees. Alternatively, solution providers could resell a service provider's public cloud offerings to their own customers, or rent co-location space from service provider data centers, using it to offer white-label cloud services, according to VMware.
While plausible in theory, these options have apparently failed to gain enough traction for VMware's liking. Which isn't all that surprising: Channel partners aren’t keen on sharing customers with any third party, and service providers see the channel as an unnecessary drain on margins.
"We have had discussions with service providers which have channel programs where you can make money on annuity. The problem is, they compete with you -- it's like the old Ma Bell model," said one VMware infrastructure partner, who requested anonymity. "You find yourself wondering, 'am I really going to get preferred pricing from them?'"
NEXT: Why vCloud Director Adoption Is Sluggish
