Summary Bullets:

• VMware revealed what many suspected at a meeting of institutional investors: the company will enter the cloud fray with its own vCloud Hybrid Cloud Service later in 2013.
• The offer promises what others have not quite been able to deliver yet: a seamless path between private on-premises clouds and hosted public offers.  However, big questions remain about what VMware will deliver – and how.

Depending upon your point of view, VMware’s official announcement of its intent to launch its own hybrid cloud offer could be either a game-changer for the cloud or a muddled effort from VMware to stay relevant in what continues to be a fast-changing segment.  VMware’s decision to introduce its own cloud service represents an unwelcome distraction from the company’s recent focus on a return to the fundamentals.  What is clear from the (limited) details VMware provided in the announcement and the immediate, almost always passionate reaction to the company’s plan to provide a hybrid offer is that no matter how many competing hypervisors and cloud platforms emerge, the vendor remains a significant force in virtualization and the cloud. 

While phrases such as ‘Amazon killer’ are overkill, VMware’s potential to provide a relatively straightforward mechanism for customers to migrate application workloads between their own privately managed cloud environments and a hosted public cloud environment is tremendous, starting with the fact the company provides the cloud infrastructure platform for literally hundreds of service providers now offering public cloud solutions.  Add this to the company’s substantial position in private clouds run on customer premises and the company’s Nicira software-defined networking (SDN) technology, which could lay a better path to a hybrid cloud, and it becomes readily apparent why rivals might see a looming threat.

However, before we can make any kind of a real prediction on what (if any) role VMware’s future hybrid cloud will play in advancing the model, we really need more detail about not just what the company will deliver but how.  Even before the official announcement, some service provider partners expressed concerns about potential channel conflict if VMware entered the space, which the company is now clearly ready to do.  While VMware was clear that it plans to leverage its partner ecosystem to deliver the service, there are still questions about which partners will play a direct role in delivery and how the company will diffuse the worries of other providers that are left on the sidelines.

With no plans to support OpenStack in the hybrid offer, VMware may face some client concerns about vendor lock-in.  That said, rival Amazon Web Services is growing its own competitive hybrid offer with partner Eucalyptus, also without OpenStack support.  So, for now, we will wait for more details and watch with anticipation as the market gears up to welcome its newest provider/competitor.