A decade after the launch of the Amazon Elastic Compute Cloud (EC2), Amazon Web Service (AWS) is still the leader in Infrastructure as a Service (IaaS) cloud computing. However, ten years into a market, companies are expecting more than cheap infrastructure. Cloud conversations have shifted to business agility and advanced services. With cloud computing emerging as a fundamental component of next generation IT architectures, Microsoft, Google, and IBM battle to topple AWS from its throne.
The Google Cloud Platform team made numerous announcements to prove that it’s serious about growing a cloud business, including hiring Diane Greene, the founder of VMware. In the past year, Microsoft has also made tremendous inroads across the enterprise with a combination Office365, Azure Active Directory and Azure cloud infrastructure services. By most counts, it’s the number 2 cloud provider.
IBM has also bolstered its Softlayer cloud platform with acquisitions such as private cloud company Bluebox, Mobile API firm Strongloop, and Resilient Systems for cybersecurity. Hence there’s no shortage of large vendor options as IT look to cloud-enable the business.
Meanwhile, VMware struggles to maintain growth and find its position in this new cloud landscape. As a result, it released several products to address the shift to cloud such as vCloud Air. In February, it also inked a well-received deal with IBM to move VMware workloads into the cloud. The IBM deal enabled VMware customers to move their workloads to IBM’s cloud from their data centers without rewriting or repackaging them. In this deal, IBM sells and manages the service. At this point, the current combination of VMware cloud products is confusing, and it's difficult to gauge the success of its cloud efforts.
A surprising turn of events
This week, VMware created more confusion and more opportunity around its cloud future by announcing a new partnership with Amazon Web Services (AWS) called VMware Cloud on AWS. It’s a vSphere-based cloud service that brings enterprise-class Software-Defined Data Center (SDDC) software to the AWS cloud. According to VMware, “Customers will be able to run any application across vSphere-based private, public and hybrid cloud environments. It will be delivered, sold and supported by VMware as an on-demand, elastically scalable service and customers will be able to leverage the global footprint and breadth of services from AWS."
While the tie-up between a leading cloud provider and a leading data center software provider makes sense, it was surprising after VMware’s string of cloud announcements. The new VMware on AWS offering will compete against the IBM-VMware as well as help AWS compete more effectively against Microsoft's Azure. VMware has a long-standing co-opetition relationship with Microsoft where it supports Microsoft services such as Windows 10 desktop virtualization services but competes with Microsoft in areas such as identity and unified endpoint management. Pat Gellsinger, CEO of VMware, noted the co-opetition with IBM and Microsoft comes down to enabling customer choice. He said that the clients that want IBM will have a solid offering and those that want AWS will also have a pre-integrated offering.
Should businesses care? Yes.
Most organizations are formulating strategies to integrate data and applications that run on-premises with those that live in the cloud. At the beginning of the cloud computing journey, companies faced a binary choice of moving to the public cloud or using their existing data center. Today, this decision is more nuanced. The industry has broken into three categories that include public, private and hybrid. The hybrid cloud is loosely defined as a mix of an on-premises data center and public cloud services with a set of tools that helps move data and apps between the platforms. (It could also potentially integrate a private cloud where IT services are provisioned over private IT infrastructure for the dedicated use of a single organization). By allowing workloads to move between on-premise and public clouds as computing needs and costs change, a hybrid cloud gives businesses greater flexibility and more data deployment options.
While hybrid cloud deployments sound like a good solution to enterprise IT’s cloud migration issues, it hasn’t typically been easy to deploy. This new VMware on AWS offering aims to solve the this by eliminating some of the mundane set up tasks and allowing a customer to use tools it already understands. For example, if IT is familiar with VMware’s set up and management solutions, these features look and feel the same in the new VMware on AWS service, eliminating the need to learn a new way how to provision everything from virtual machines up to a complete software defined data center in the cloud.
This partnership bodes well for the VMware and AWS because the vendors are offering the service at a time when companies are seeking a simpler way to move to the cloud. Some of the secret sauce in creating the solution also makes it easier for businesses to move workloads seamlessly back and forth between on-premise data centers and the cloud. The companies believe the initial enterprise applications will include easily adding development and testing environments as well as certain aspects of disaster recovery. They expect the workloads will quickly migrate to other applications based on IT’s familiarity with virtualizing these workloads on-premises.
Will it change the cloud landscape? Slightly
Enterprises will favor the presence of at least two to three strong players. Many companies are considering using two infrastructure providers. For example, at the GCPNext conference, Google announced wins with Coca-Cola and Disney. Both of these companies also use AWS, indicating that large customers are second sourcing or splitting cloud deployments by business unit. Hence a tie-up with VMware and AWS doesn’t automatically spell doom and gloom for the other providers.
The war for cloud computing dominance isn’t an easy battle to win. It’s a set of skirmishes. With this latest announcement, there are a clear set of short-term winners and losers. Amazon wins big with a large enterprise sales team from VMware supporting the new joint offering. Despite what VMware says, IBM loses because the partnership makes it easier for customers interested in VMware to choose AWS. Google also takes a hit because it will be difficult to rival the enterprise sales reach of VMware plus AWS. Meanwhile, VMware wins in the short-term because it gets a chance to be built into the AWS client base.
The announcement highlights that the cloud platform battle is far from over. There’s plenty of growth left in the market because companies haven’t fully embraced the cloud. Additionally, the IoT cloud marketplace is still a wide open, and there are many vertical and regional clouds emerging as well. It will be interesting to see where the next battle is waged. Perhaps it will be in the machine learning and cognitive arena.
