Deja Vu: PayPal Once Again Denies It's Dumping VMware For OpenStack

PayPal created a stir last week by raving about its OpenStack-based internal private cloud, with some industry pundits interpreting this to mean the e-commerce vendor is planning to dump VMware's server virtualization software entirely.

On Monday, a PayPal spokesman told CRN that isn't the case, explaining that VMware is still "a critical element" in PayPal's hybrid cloud infrastructure.

While PayPal "primarily" uses OpenStack for its compute virtualization needs, the spokesman said it uses a "combination" of VMware and KVM hypervisors. The spokesman declined to provide a specific breakdown for its usage of each hypervisor.

[Related: PayPal Loves Its OpenStack-Based Private Cloud, But Does That Mean It's Ditching VMware?]

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OpenStack, a set of open source cloud software tools for delivering Infrastructure-as-a-Service, works with VMware's ESX hypervisor, as well as Xen, Hyper-V and KVM, among others.

VMware has its own version of OpenStack that's optimized to run in VMware environments, but the PayPal spokesman declined to comment on whether the e-commerce vendor is using it.

"PayPal leverages the core strengths of multiple virtualization technologies in our hybrid cloud environment," the PayPal spokesman said in an email.

PayPal, a longtime VMware customer, has been testing the OpenStack waters in recent years, leading some industry watchers to view it as a kind of litmus test for OpenStack adoption in the enterprise.

In March 2013, an executive from OpenStack vendor Mirantis said PayPal was considering replacing VMware with OpenStack on 80,000 of its servers, but Mirantis later backtracked on that claim. PayPal, for its part, said it had no intention of "ripping and replacing" its VMware software.

Last week, Sri Shivananda, PayPal's vice president of global platform and infrastructure, said in a blog post that the vendor has converted "nearly 100 percent" of its traffic serving Web/API applications and midtier services to run on its internal private cloud.

PayPal said last year it served 162 million customers in 26 currencies, handling a total payment volume of $228 billion. If PayPal is running all the infrastructure to support this on OpenStack, and using the KVM hypervisor instead of VMWare ESX, this could be a problem for VMware, two partners told CRN.

But the bigger issue for VMware is that customers that want to use OpenStack aren't always willing to buy everything from a single vendor, said one high-ranking industry executive, who requested anonymity because he's not authorized to speak publicly about the matter.

VMware is now aggressively pitching its software-defined data center, which includes NSX software-defined networking and VSAN storage, as the best path for customers to follow. The problem with this approach is that some customers -- like PayPal -- prefer to mix and match technologies as they see fit, said the source.

"What VMware should be more concerned about is their increasing feeling that they have to own the whole stack," said the source. "OpenStack really gave VMware a wake-up call that the hypervisor is a commodity."