Cloud News

VMware Taking Fight To Amazon With Top-Secret Public Cloud Project

Kevin McLaughlin

March 01, 2013, 05:16 PM EST

VMware executives spewed fire and brimstone at Amazon this week, urging partners not to let their customers move workloads to its cloud infrastructure. As it turns out, this was more than just run-of-the-mill competitive rhetoric.

VMware is working on a project that will allow customers to move their on-premise private cloud workloads to public cloud infrastructure that's owned and operated by VMware, sources familiar with the plans told CRN Friday.

This is not Project Zephyr, the VMware infrastructure as a service CRN first reported on last August, but a new offering referred to internally as VMware Public Cloud, which is currently in beta, sources said.

VMware did not respond to a request for comment on its public cloud project, but has previously said it doesn't respond to rumors or speculation.

While few companies are moving mission critical workloads to the public cloud just yet, that appears to be where things are headed. Sources told CRN VMware Public Cloud is intended to slow Amazon's momentum and generate more revenue in areas that lie outside its core virtualization business.

VMware Public Cloud is also intended to showcase the strength of VMware's technology portfolio in the public cloud, sources said.

"Customers will require a bit less on premise, but they will be forced to use VMware technologies like Nicira and DynamicOps to address the security, agility and performance challenges in the public cloud," said the source, who requested anonymity because he's not authorized to comment on VMware's plans.

Organizations are increasingly looking to move workloads to the public cloud while maintaining governance and manageability. With tools like DynamicOps, and vCenter Operations' ability to monitor workloads in some public cloud environments, VMware is moving to address this need, sources told CRN.

In the management arena, VMware could potentially be the "umbrella" that covers everything, regardless of what the hypervisor or cloud is underneath, said another source with knowledge of VMware's plans, who also requested anonymity.

NEXT: Why This Is A Major Strategy Shift For VMware

All of this represents a major strategy shift for VMware, whose longstanding public cloud policy has been to allow its service provider partners to handle this business exclusively. Under this model, VMware channel partners are expected to steer their customers to public cloud service providers and collect referral fees.

However, as was evidenced first by Project Zephyr, and now with VMware Public Cloud, VMware isn't satisfied with how the strategy is working out.

Meanwhile, as Amazon's cloud business continues to accelerate -- Amazon Web Services had $2 billion in revenue in 2012 and is on track for $3.8 billion this year, according to Macquarie Securities Group -- VMware has apparently decided it's time to change its approach to the public cloud market.

At VMware's annual Partner Exchange conference in Las Vegas earlier this week, VMware CEO Pat Gelsinger urged partners to help battle Amazon EC2 on all fronts, suggesting that anything less could pose grave consequences for the entire VMware ecosystem.

"We want to own corporate workload," Gelsinger said at the event. "We all lose if they end up in these commodity public clouds. We want to extend our franchise from the private cloud into the public cloud and uniquely enable our customers with the benefits of both."

VMware COO Carl Eschenbach went a step further, telling partners he finds it "really hard to believe that we cannot collectively beat a company that sells books."

VMware holds a commanding position in the private cloud, but as several industry watchers noted this week in response to Gelsinger and Eschenbach's comments, the public cloud is a different animal.

"A cloudwashed vSphere environment that takes two days to deploy new workloads, fulfilling requests through the help desk and having no cost transparency will lose every day to a public cloud," Forrester analyst James Staten said in a Thursday blog post.

PUBLISHED March 1, 2013