VMworld was last week and as usual there was a lot of announcements and news coming out of the conference. Of particular interest to IaaS providers is VMware’s emergence as a infrastructure-as-a-service provider with VMware now pitching its own cloud service to customers along with reselling Savvis’ offerings.
With the stunning growth rate of cloud computing and the huge valuations ascribed to cloud providers it’s not unexpected to see the rush of technology companies crowding into the cloud: VMware is simply the latest and won’t be the last. One of the key points we have seen with companies trying to become service providers is they often underestimate how difficult it is to maintain an always-on infrastructure and 24x7x365 support operation. The difficulty of this can be noted in Dell’s decision to recently abandon their efforts to launch a cloud platform based on OpenStack.
The interesting decision for cloud providers will be: what do you do moving forward? As a cloud service provider, why would you continue to build your business based on the technology of a company that wants to compete with you? With an ecosystem of tools from RightScale, OpenStack and Xen, cloud service providers have a nice selection of providers they can use, who also do not compete with them. I get it…there will be customers who have a preference for a specific hypervisor. In those cases you should offer them what they want, be it HyperV, VMware, or another platform. But if you are a public cloud provider using VMware to power your offering, you should ask yourself why.
I personally believe this is critical mistake for VMware; it should embrace cloud service providers and become our defacto arms dealers. Arming cloud providers to battle one another, while VMware ends up winning the war regardless of the outcome of an individual battle. Now providers are faced with the choice: buy arms from the enemy or get a new dealer.