VMware Wants to Maximize Hybrid Cloud Choice for Customers but Coopetition will be a Key Challenge

Summary Bullets:

• VMware and Microsoft Azure are making speedy progress to commercialize their joint hybrid cloud offering, Azure VMware Solutions.

• Azure VMware Solutions forms part of VMware’s push to offer its customers a hybrid cloud option with all of the major cloud providers.

Amid the inundation of announcements and discussions at last week’s VMworld conference in San Francisco, one piece of news that received comparatively less coverage related to Azure VMware Solutions, a hybrid cloud offering from VMware and Microsoft Azure. Already generally available in some U.S. regions, it was revealed at VMworld that by Q1 2020 Azure VMware Solutions would be offered in eight global regions and would include Azure NetApp Files as an option for storage-intensive workloads.

VMware first outlined plans to offer a hybrid cloud solution in partnership with Microsoft in April 2019; it is therefore making speedy progress to commercialize the offering – especially compared with VMware Cloud on AWS, the VMware-operated cloud service that runs on bare mental in Amazon Web Services data centers. Although VMware Cloud on AWS was announced at VMworld 2016, it required around two years of technical and commercial preparations before being ready for market late last year. Since then however, demand has been strong, with VMware reporting a fourfold year-on-year increase in the number of customers using the solution, which is available in 16 global regions. Enterprise customers are using VMware Cloud on AWS for a range of purposes, including as a platform for extending their on-premises data center environments, and for modernizing applications using AWS services.

The relative speed at which Azure VMware Solutions has been commercialized is partly a reflection of the different approach VMware is taking to deliver the solution. VMware is relying on certified cloud service partners, which already have a presence in Microsoft Azure data centers, and which will each offer their own variant of Azure VMware Solutions. The first of these, Azure VMware Solutions by CloudSimple, is now available in Azure’s East and West U.S. regions and will be extended to other regions in North America and Western Europe in the coming months. At VMworld, CloudSimple announced a partnership with cloud migration specialist RiverMeadow Software, which will help to accelerate onboarding to Azure VMware Solutions.

A second offering, Azure VMware Solutions by Virtustream, is earmarked for launch by the end of this year. In each case, the solution will be managed by Microsoft Azure, which hosts the VMware technology environment (comprising of vSphere, vCenter, vSAN, and NSX-T) on Azure bare metal infrastructure in Azure cloud regions. Customers can migrate or extend their on-premises VMware environments to Microsoft Azure, using the same management tools, and modernize their workloads using native Azure services.

Azure VMware Solutions and VMware Cloud on AWS both form part of VMware’s push to offer its customers a hybrid cloud option with all of the major cloud providers (VMware also has hybrid cloud partnerships with IBM and Alibaba and, in July 2019, announced plans to roll-out a hybrid cloud offering in collaboration with Google Cloud). For their part, public cloud providers have recognized the benefits of having VMware as a strategic ‘lift-and shift’ partner for on-premises workloads.

However, although VMware views these partnerships as a way of maximizing choice for customers grappling with where to run their workloads it is still early days for some of these solutions, and it is unclear whether they can secure the sort of customer demand being recorded by VMware Cloud on AWS. These different VMware-based hybrid cloud offerings will effectively compete against one another for enterprise workloads, and VMware customers will still need to make decisions about which offer the best features and capabilities relating to things like availability, management, support, and application tools and services. In addition, all of the major public clouds are forging partnerships with rival infrastructure vendors, including Red Hat, HPE, and Nutanix – some of which have more advanced strategies around multi-cloud enablement. Coopetition will be the name of the game, promising to make this a dynamic and uncertain market.

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