After years dominating on-premise data centre deployments with its virtualisation and management tools, VMware has come under growing pressure to respond as enterprises begin to move workloads into the public cloud.
With the launch of its vCloud Hybrid Service in the UK and Europe last week VMware has finally made its move into the fast-evolving infrastructure as a service market. But as a relative late-comer to the market - can vCHS grab the attention of customers, and provide the push many need for wider cloud adoption?
It is a move some have labelled as defensive, with VMware finding its hand forced by the threat posed to its licensing revenues as enterprises take the public cloud ever more seriously and rely less upon on-premise virtualised servers.
Perhaps, but for customers of the vendor it opens another potential avenue for moving towards the cloud. vCHS provides a rival offering to the established players including Amazon Web Services, Microsoft Azure, Rackspace and increasingly other OpenStack-based clouds from traditional IT suppliers such as IBM.
VMware, has taken a slightly different approach to many of these cloud providers. It is hoping that infrastructure managers familiarity with its management tools such vCloud Automation Center and vCloud Director will give it an edge over competitors and provide the basis for cloud deployments which extending from the data centre outwards. This contrasts with AWS, for example, which has found popularity among developers in particular.
Hybrid cloud adoption
According to IDC research manager Spencer Izard, the investment that many large companies have already made in VMware makes vCHS a strong proposition for cloud deployments.
"For customers that have a large estate of VMware virtualisation right now and have committed to them quite considerably it make a lot of sense for them purchasing cloud Iaas to stick with VMware. One of the big things they are obviously pushing is the fact that what you do with them on-site is the same on their cloud, it is is highly portable and you can move servers back and forth.
"How much truth there is in that and whether there are any technical issues that need to be ironed out is another question, but that is a really big sell for a lot of customers."
Speaking at the launch of vCHS last week, VMware CEO Pat Gelsinger claimed that hybrid clouds are likely to be the primary type of deployment over the next "10 to 20 years", while analysts Gartner expect hybrid clouds will be deployed at around half of large enterprises by 2017.
By removing some of the complexity involved in moving workloads to and from public cloud providers - often cited as a major problem for businesses - VMware’s approach could offer a way to speed this process, particularly in Europe where adoption of public cloud has been slower than the US.
Forrester vice president and principal analyst, James Staten, expects that the initial workloads to be migrated off-premise by enterprises are likely to be 'engagement applications': websites, customer-facing promotional applications, mobile applications, batch applications, business intelligence.
"Right now we are still relatively early in cloud adoption by enterprises, but VMware certainly has a better opportunity [than competitors] to capture the more mainstream enterprise applications," he said.
Next page: Licensing costs
One of the challenges for customers looking to adopt the vCHS cloud is ensuring that they are on top of licensing.
Industry commentators believe that vCHS itself is unlikely to be a major revenue contributor proportionally to VMware's $5 billion business. It will however benefit the vendor in other areas, such as the sale of more lucrative cloud management software licences.
For enterprise customers it is important to be wary of spiralling costs on top of their existing VMware expenditure, with the potential to easily add VMs in cloud environments, said Staten.
"One thing for customers to bear in mind is that cloud management costs will probably just keep going up from here,” Staten said.
“If you look at vCAC and the other pieces of the management stack, you pay for those based on the amount of VMs under management, and obviously the more you light up in the cloud the more VMs you have under management.”
He added: "The main concern that we hear from customers about the public cloud is that they already spend more than they want with VMware."
Customers with existing enterprise licensing agreements covering virtualisation and management tools will also need to be confident they are not paying twice for workloads that are migrated into the cloud, warned Izard.
"They are selling large ELAs for uses of virtualised servers. For those existing contracts that enterprises have, how flexible is the new service with regards to pushing x percent of my servers onto the cloud platform, and how does that affect my pre-existing licensing model?" he said.
"If I bought enough licences to run 100 workloads, and then I decided to put 50 onto the new cloud platform mid-way through my ELA - will VMware reduce the payment that I paid VMware up front from 100 down to 50, so I can move the money I need to invest into the cloud, or am I essentially going to have to pay twice?"
Targeting IT ops teams
The popularity of its virtualisation and orchestration tools to support private cloud deployments have meant that many IT departments are already very comfortable with VMware's suite of software. This familiarity among infrastructure teams is likely to be a strong selling point for VMware's cloud tools, said Izard.
"The whole VMware sales pitch will appeal more to the IT ops manager. The ability to do something in the least complex way is the nirvana for most IT departments," said Izard.
"As an enterprise customer I would be looking very strongly at this because of the fact that you can move all of the workloads seamlessly as if it is vMotion-type behaviour.”
The challenge that VMware faces is in gaining the attention of the rest of the business, with AWS the platform of choice for developers wanting to quickly spin up servers with a swipe of a credit card. Forrester's Staten added that a lack of vCHS functionality on launch will also mean that the platform will be less appealing for these purposes.
"Over time it is the intention of VMware to provide all of the developer value propositions, so that developers be comfortable as well. But at the moment they have little beyond base IaaS," he said.
"They don’t have hosted databases, built-in auto-scaling, load-balancing, and a bunch of the built-in networking functions you would find on these other platforms. And they definitely don’t have the developer frameworks and the breadth of support that those platforms have today."
Staten believes that the differences between VMware and other public cloud providers could lead to an element of conflict between the two sides of the business, in terms of which provider’s cloud a company decides to invest in. This could come down to which department has more influence with senior decision-making staff, he said.
"It is really going to come down to how much sway the VMware administrator has within the organisation versus the developers, who may have a different path in mind. If the VMmare admin has significant sway and can make the most compelling case, then the VMware cloud is going to be really attractive to the company," said Staten.
"If the developers are looking for continuous integration services provided to them, an ecosystem of contractors, consultants and other who can help them be successful, then that is what AWS brings, and is real hard for VMware to match."