Partners: VMware's Public Cloud Too Expensive, Lacks Unique Services

VMware's vCloud Hybrid Service may yet fulfill its promise of being a "safe landing place" in the public cloud for customers running VMware server virtualization in their data centers.

But after nearly a year on the market, VMware partners say vCloud Hybrid Service -- also known as vCHS or "V-cheese" -- hasn’t been selling as well as the Palo Alto, Calif.-based vendor expected.

None of the half-dozen partners CRN spoke with for this story would speak on the record. But the consensus that emerged from those interviews is that vCHS, in its current form, is too expensive for the functionality it provides and also lacks unique, compelling features.

VMware began selling vCHS last September. Earlier this year, VMware started pushing disaster recovery-as-a-service (DRaaS) and desktops-as-a-service (DaaS) as marquee offerings for vCHS.

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But the DRaaS service, launched in April, is a bare-bones offering that only fits a small number of use cases, according to VMware partners who have worked with it.

One partner told CRN VMware's DRaaS on vCHS could be a fit for small and medium businesses that don't have any sort of disaster recovery in place.

"VMware's DRaaS is better than nothing, but until they make it more scalable and add some automation, like Site Recovery Manager, then it will remain a niche SMB play, in my opinion," the partner said.

Another VMware partner had a more blunt assessment of the service, describing it as "barely functional" in an interview with CRN. "If you have more than 10 VMs to fail over, it's not a workable solution," the partner said.

CRN reached out to VMware for comment and will update if the company responds.

In VMware's second-quarter earnings call last week, COO Carl Eschenbach spoke of "very good uptake" for vCHS with enterprise customers.

Eschenbach also noted that VMware's hybrid cloud business grew nearly 80 percent year-over-year in the quarter, but that number also includes sales from VMware's vCloud Service Providers, so it's unclear how much public cloud VMware is selling itself.

At VMworld, VMware is expected to talk about new features and services it's bringing to vCHS, including database-as-a-service, object storage and auto-scaling. This could help make the offering more enticing to enterprises, according to partners.

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Another issue stalling vCHS sales is that VMware hasn't done a good job of engaging with partners on it, an executive from a national VMware partner told CRN.

"I haven't even been approached by anyone at VMware about selling or using it," the partner said. "I would love to see it become more accessible to the partner community through enablement and incentives."

Moving into the public cloud market was a major business model shift for both VMware and many of its partners. On this front, VMware is already working to get its channel up to speed.

VMware launched in June its vCloud Hybrid Service program for partners in the U.S. and U.K., which includes training, incentives, promotions and support for selling public cloud and disaster recovery services.

Adding new features could make vCHS a more palatable option for enterprises. VMware, which currently sells vCHS on a monthly subscription basis, is also planning to introduce a pay-as-you-go model for customers in the second half of the year.

While new features, services and pricing could give vCHS sales a much needed spark, some partners feel that VMware, with less than a year under its belt in selling public cloud, may simply need more time to figure out how this market works.

Jamie Shepard, senior vice president of healthcare and strategy at Dallas-based VMware partner Lumenate, told CRN he doesn't think vCHS is priced too high.

The bigger issue VMware is facing, Shepard said, is that moving virtual machines back and forth between data centers and the public cloud isn't yet a big need for many of its customers.

"VMware's challenge is trying to identify the best use case for vCHS. It's a marketing challenge," Shepard said. "VMware is now playing with the big names in public cloud, which is a new market for them. But their virtualization install base is an advantage."