Why VMware's hybrid Cloud announcement could be a big deal

VMware's newly announced hybrid cloud strategy could be a game changer in the infrastructure as a service (IaaS) market

Perhaps the biggest selling point for VMware's newly announced hybrid Cloud strategy -- and the reason it could be a game changer in the infrastructure as a service (IaaS) market -- is because of the common platform VMware customers will now have between their private Cloud internal systems and this new VMware-operated public Cloud.

Consistency across the private and public Cloud environments could make it easier for users to achieve what some consider the nirvana of the Cloud: a hybrid Cloud that incorporates an on-premises private cloud with a hosted public cloud, allowing applications to scale between either environment based on resource need.

That's what VMware's hoping to offer customers, analysts say. Whether that becomes a reality, is still the big question.

[ MORE VMWARE: 5 questions about VMware's virtual networking product ]

The idea of having a common platform between your public and private Clouds is not new. Microsoft, for example, offers Windows Systems Center to manage behind-the-firewall IT, and Windows Azure as its public Cloud - it's all within the Microsoft family. OpenStack has this option too; Rackspace, for example, has a private cloud offering that lets customers deploy the same OpenStack platform that the company uses for its public Cloud on their own premises. Even Amazon Web Services - the giant in the IaaS market - has partners, like Eucalyptus, which claim to be the private-Cloud equivalent of AWS.

In announcing a public Cloud, VMware is smoothing the path for customers to get to that "hybrid Cloud nirvana" of having public and private Cloud resources dynamically working together, says Forrester Research virtualization guru David Bartoletti. So is this an Amazon killer then? "Absolutely not," says Gartner analyst Chris Wolf. "It's more of a VMware survival tool, allowing them to live another day." VMware had to make this move, he says: "Operating like a traditional software vendor in the Cloud era is not a recipe for long-term success."

But that doesn't mean customers will immediately gobble up infrastructure as a service (IaaS) from VMware. The company has some challenges rolling the product out, Bartoletti says. For one, Amazon Web Services has made its hay appealing to developers who jump ship from IT to get fast, cheap access to virtual machines and storage.

VMware will likely be going after a very different audience: the infrastructure, virtualization and ops folks in IT shops. But how do they feel about embracing the cloud? Some see cloud computing as a threat to their own jobs and have questions about security, compliance and whether the cloud is ready for mission-critical apps.

In some ways, VMware has an advantage over other IaaS cloud providers because of the common management platform, though. "They can go to the infrastructure operators in IT shops and say, 'hey, all your management tools are right here,'" Bartoletti explains. VMware has had public cloud offerings through its vCloud Director partner ecosystem, but that's garnered disappointing market adoption; a VMware-owned and -operated public cloud could have a different market presence, he says.

Providing an infrastructure stack with a common management platform between the public and private cloud isn't enough to win in the IaaS world, though, says Wayne Pauley, a researcher at Enterprise Strategy Group. "Having the infrastructure is sort of table-stakes for the IaaS market now," Pauley says. "There has to be a service catalog on top of that." That's where VMware could face steep competition from Microsoft, he says. Microsoft has Systems Center, Azure Cloud and Office 365 apps all integrated in its ecosystem.

VMware does have some opportunities in services, though -- most notably its virtual networking strategy it acquired from Nicira and that it announced along with the hybrid cloud plans this week.

Another big question about VMware's hybrid cloud is what it means for VMware's partner network. The company continually claims to be a partner-focused company, but its new IaaS offering could be quite a snub to existing vCloud Director ecosystem partners. But there are some ways the company could smooth over partner relations, analysts say.

For one, partners can differentiate on service offerings geared specifically at various industry verticals. There can be a VMware HIPAA-certified Cloud provider, another focusing on government clients, for example. Another way to assuage partners is to use their resources.

VMware is traditionally a software company, not an infrastructure management company, so unlike other big-name companies that have rolled out a major IaaS offering -- think of HP, Dell, IBM -- VMware doesn't have a ready set of massive data centers all around the country ready to host this offering in.

"Using VSPP partner's datacentres and white-labeling existing infrastructure would both soothe hurt feelings and give VMware an ability to source and deploy new Cloud locations extremely quickly, with minimal investment," 451 Research Group analyst, Carl Brooks, says.

VMware is still in the very early days of its IaaS rollout, though. Even though it's been rumored for months, the company just confirmed its plans this week, which is a little late compared to many of the other providers that have jumped into this market. The devil's in the details, Bartoletti says. VMware is not releasing information about how the service will be set up or priced. Until more details emerge, it's a wait and see.

Network World senior writer Brandon Butler covers Cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.

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