AWS' Terry Wise: Public Cloud 'Better Economic Value' Than Private Cloud

Terry Wise On Public Cloud, VMware And Innovation

The answer to the heated public cloud versus private cloud total cost of ownership debate is clear to Amazon Web Services' leader Terry Wise.

"I have yet to run into a customer, when you really dive into the details, where public cloud is not a better economic value proposition," said Wise vice president of global alliances, channels and ecosystem for AWS, in an interview with CRN.

Wise, who has over 25 years of IT sales leadership experience, says the public cloud cost benefits exceed what software-defined private clouds can offer. He also says that VMware Cloud on AWS has "changed" the debate on public versus private cloud. In an interview with CRN, Wise talks about slashing the price of VMware Cloud on AWS in half, the technology roadmap ahead with VMware, and why public cloud reigns supreme over private cloud.

What trends are you seeing in public cloud pricing versus software-defined private clouds?

I have yet to run into a customer, when you really dive into the details, where public cloud is not a better economic value proposition. When you take everything into account from just the no CapEx and moving to all OpEx, you're getting this massive amount of elasticity, you're spinning up and you're spinning down –those are all attributes you can't get in a private cloud world. Although we fully recognize and respect the fact that some companies need to run in a hybrid cloud and have their own data centers, I think that's as much from a comfort and regulatory compliance perspective versus a total cost of ownership perspective.

How has VMware Cloud on AWS change the cost debate of public versus private cloud?

VMware Cloud on AWS is more cost effective. … It's changed the conversation in the fact that, you were making customer make a binary decision. If you wanted to go public cloud, you come to AWS. If you wanted to go private cloud, use VMware on-premise. We both had these kind of crummy little utilities that sort of made integration easier, but they were sub-optimal. By bringing this whole thing together, it has just changed the engagement and customers are the ones who told us we had to do this. We both had the thesis that VMware Cloud on AWS made sense, but the customers were the ones saying, 'Hey stop making me make this choice. You're making it harder. It's taking longer. It's inefficient.' So all of those barriers have really come down.

For specifically AWS public cloud, what buying trends are you seeing in corporate environments in 2018 compared to 2017?

The biggest thing is in the enterprise and public sector side, adoption is just accelerating. We saw this trend happening three or four years ago where pretty much everybody was in project mode, so they might be doing one off here or there. Then they kind of went into program mode saying, 'Okay, the cost model works. The security model works. Now I'm going to start roll out against maybe a dozen applications.' Most of that could have been net new, but in the last year what's really picked up is, 'Hey we're going all in.' This is going to be over the next three to seven years. It's not going to be net new, it's going to be migration. [Businesses] really want to get out of the existing environment and get onto the foundation of the future so that they can innovate faster. That's been a big trend in how quickly that can happen now. Before it was a little bit cumbersome. Partners now have the ability to go and say, 'We can do it now in a much shorter space of time.'

Where is VMware Cloud on AWS winning?

The use cases we're seeing from customers is them getting out of the data center for whatever reason – a hardware refresh cycle, a lease that's expiring, they just want to shrink their CapEx footprint – so migration is a big use case. Some customers don't want to start with disaster recovery and are saying, 'Hey I don’t want to stand up a separate site for disaster recovery.' It's an easy, kind of risk free way to get started with a strong value proposition behind it and not having to go all-in to a new environment they might not be familiar with.

Application refactoring is another growing trend. If you're going through a software upgrade, this is a chance to keep the software stack on VMware but also go through application refactor and upgrading. So why not move it at the same time? You get a lot more flexibility, agility, attach it to RDS or data warehousing so you can really extend it that way. Those are the use cases that are driving the bulk of customer demand.

Where do you see the biggest growth for AWS regarding the VMware Cloud on AWS partnership?

It's all industries. It's all segments of the market: the enterprise and the public sector. In fact, the public sector in many perspectives is out ahead. Partners recognize the opportunity in the commercial space as well. … It is a global play. You see the availability in Sydney and we're in Asia now. We're going to be everywhere by the end of next year. It's a very aggressive rollout. When we roll these things out, there's cost associated with it for both VMware and us, so we don’t do that unless there's demand to support that. We are accelerating our global deployment of the offering based on interest and demand. For partners in the local regions and territories, the AWS and VMware sales teams are working really well together with the partners. Sometimes getting two companies to work well together – us and a partner -- is not always easy. When you bring three companies together the degree of difficulty is exponential, but I will say we are getting really great feedback from the partners that the engagement model works.

Talk about the 50% price slash for VMware Cloud on AWS and what markets partners should now attack?

We've seen it at AWS for years. We've always cut prices, it's part of our DNA. When you cut price, you actually just open up the platform to more use cases and a bigger customer base which drives more experimentation and more production applications. The great thing about partners is we are just lowering that barrier for entry for these customers and get them do to more, faster. When those customers do more, faster, they need help and this is where the partners come in. It's a great opportunity for them.

What new sales opportunity does AWS RDS for native VMware environments open for partners?

If you look at what we were doing originally, it was, 'Hey take the VMware environment, migrate it to AWS and extend it with native AWS services.' This goes the other way, we're taking native AWS services and extending it to the VMware environments. So it creates tighter integration and more opportunity for partners. On the database side, relational databases power every application, so whether it's Oracle or SQL Server or PostgreSQL or MySQL – it's database agnostic. Our partners have the ability to deploy new apps on RDS, on VMware, on-premise – most of these apps will be new applications. It gives partners choice. This opens up so many doors for partners to really say, 'Hey, now I have a solution that is agnostic to database platforms that I can go and monetize on.' So if you think about the opportunity to just build and deploy new applications in a cloud world for all of these customers, it really does extend the business opportunity for our partners and certainly the landscape for our customers."

What positive partner trends are you seeing with VMware Cloud on AWS?

Since we've launched the [VMware Cloud on AWS] Solution Competency in March, we have about 156 global partners participating who have attained the Competency, which is not easy. One of the differences in cloud is that the partners aren't just handling the transaction, they own the customer experience to a large extent, so we have to make sure that we're putting in a rigorous competency process. It's not just checking the box, there's real rigor behind this because both of our brands are on the line. More importantly, customer success is at stake here.

What does the VMware-AWS partnership look like in the future? What can partners expect over the next 12 months?

We'll continue to mature the relationship by building joint solutions. So a lot more solutions come to market. We're taking a lot of the infrastructure complexity away and we're letting the partners focus on the higher-level solutions so things around IoT and edge – regardless of what industry your in, whether you're in connect car and automotive or 5G and Telco, if you're in connected mining, automated factory, etc. Partners can focus on the actual use case and the business outcome for the customer versus having to worry about all wiring. That's what customers are willing to pay a premium for. We don't want to pay a whole lot of extra money for someone to drop off hardware and get it wired up – we'll pay for that. But what they really want to pay for is driving that business outcome, so this is edge and machine learning. I think you're going to see a lot more innovation between the two companies higher up the stack.

Talk about that VMware-AWS technology roadmap moving up the stack?

Devices. If you look at when VMware talks about any device, any application … when you just move up the stack, it is the analytics piece. This is why the RDS announcement is so important because when you look at the business, business outcomes tend to be driven by data and analytics whether it's IoT and edge, machine learning, vertical applications, etc. So having RDS live in VMware natively just puts database at the core of this whole partnership. That is the driver of really these business outcomes and higher-level innovation. The most exciting thing for me is when you turn these capabilities over to the ecosystem and you do it in an open and flexible way. It's the ecosystem that innovates.