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
Within the service provider space, adoption of vCloud Director, a management tool for pooled compute, storage and networking resources, is not proceeding as quickly as VMware had hoped. This is due in part to the high level of technical expertise required to get it up and running, sources told CRN recently.
"We've deployed vCloud Director with a few customers. It is really complex to do and requires a strong engineering effort because it has a lot of things in it that integrate with other technologies," said a source, who requested anonymity.
This is why VMware's acquisition last month of DynamicOps, a Burlington, Mass.-based startup, is being hailed as a strategically shrewd move. DynamicOps extends vCloud Director's management reach to other vendors' public and private cloud resource pools, a capability it did not have previously.
For VMware partners that do not offer services, the vendor's entry to the cloud services market could be a positive because it could drive down prices, according to Robert Germain, vice president of engineering at Hub Technical Services, a South Easton, Mass.-based VMware partner.
"My initial reaction [to the Project Zephyr report] was, 'oh great, another choice,'" Germain told CRN. "But there is still huge money to be made in the hybrid cloud market."
Rand Morimoto, president of Convergent Computing, an Oakland, Calif.-based virtualization solution provider, sees similarities between VMware's Project Zephyr and Microsoft's Surface tablet. Both cases can be interpreted as a vendor breaking with tradition to illuminate the path forward that it deems best.
"On one hand, I can see how these companies can have better control over production, delivery, and service and that the OEM or partner model limits an organization’s agility in action," Morimoto told CRN. "But on the flip side, it puts these organizations in competition with their partners and gets them into business models that are new or different that they haven’t done before."
related stories
Video
trending stories
sponsored resources

Cysurance
Cyber Insurance 360

EPOS
EPOS

Fujifilm
Fujifilm

Dell Technologies
Dell Technologies Storage Learning Center

Mimecast
Mimecast

Carbonite
Cloud Storage 360

Application Integration 360

Hitachi Vantara
Hitachi Vantara

Dell Technologies
Dell Technologies Cloud Learning Center

Tenable
Cyber Risk 360

Webroot
Webroot Learning Center

NPD
Industry Trends 360

BlackBerry
BlackBerry Learning Center

Symantec
Symantec Business Security Learning Center

Sherweb
Sherweb

Acer
Remote Workforce 360

APC by Schneider Electric
Digital Services for Edge Learning Center

Channel Chief Showcase

StorageCraft
Disaster Recovery Learning Center

Vertiv
Edge Computing Learning Center

Wasabi
Wasabi

Dell Technologies
Dell Technologies Hybrid Cloud Learning Center

Cradlepoint
5g for Business 360

Comm100
Collaboration & Communications 360

Veeam
Veeam

Smart 3rd Party
3rd Party Maintenance 360

Sophos
Sophos Cybersecurity Learning Center

Trend Micro
Trend Micro Learning Center

VMware

Dell Technologies
Dell Technologies Server Learning Center

HubStor
Cloud Backup 360

eSentire
Managed Detection and Response 360
