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Shawn Mills, founder and president of Green House Data, a Cheyenne, Wyo.-based vCloud service provider, said while VMware's entry into the public cloud could add pricing pressure, partners can differentiate themselves by offering a superior level of service to end customers.
"VMware's public cloud will probably be less expensive than ours, and if I was out there selling on price, I would be concerned by that. But I'm not, so this doesn't bother me," Mills told CRN when informed of VMware's public cloud plans.
"VMware is backed by EMC, so their costs are going to be much lower. If they're going to have the same services model as Amazon, with no contract and the ability to use-at-will, vCloud service providers will have a tough time competing unless they have very specific vertical markets," said one service provider, who requested anonymity.
VMware's entry into the public cloud space could cause service providers to seriously consider alternatives such as OpenStack and CloudStack. But it's not as if VMware is abandoning its partners: In a Thursday tweet, VMware noted that it now has 211 service providers offering vCloud services in 31 countries. VMware is also still running its vCloud evaluation, which lets partners "test-drive" vCloud public cloud services delivered by an anonymous VMware service provider partner.
VMware was expected to announce its public cloud IaaS last week at its Partner Exchange conference, but that didn't happen. VMware did announce Cloud Credits, a program designed to get VMware's solution partners working more closely with service providers in selling public cloud services.
At the conference, VMware CEO Pat Gelsinger urged partners to keep their customers away from the allures of the Amazon public cloud. "We all lose if they end up in these commodity public clouds," Gelsinger said at the event. "We want to extend our franchise from the private cloud into the public cloud and uniquely enable our customers with the benefits of both."
This sounded like the sort of bluster that often emanates from partner conferences, but it could have been a foreshadowing of what VMware has in store. If there was any doubt that Gelsinger was brought in to lead VMware in a new direction, VMware's entry into the public cloud space would be the clearest evidence yet.