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By | Simon Sharwood 1st September 2016 07:30

VMware content to run a small and beautiful cloud, with friendly help

vCloud Air is now a going concern, and an R&D resource

VMWORLD 2016 VMware's own cloud is now profitable and spinning out innovations the rest of VMware can use, according to Ajay Patel, Virtzilla's exec responsible for all product development and operations for vCloud Air.

In the early 2010s VMware's cloud ambitions saw it pursue a strategy of a world-girdling bit barn build, albeit colocated in third party data centres, and a promise of super-easy hybrid cloud fun because its own cloud would just run vSphere. But in early 2016 it it changed course, scaling back its ambitions and instead doubling down on partnerships with other clouds that also thought they could make a buck with an easy vSphere on-ramp.

VMware's a US$7bn company but that figure is dwarfed by the big three cloud-builders AWS, Google and Microsoft. So the reversal was a bit of a shock but also eminently understandable. Not long afterwards IBM decided it would offer hosted vSphere, so at a stroke VMware achieved global scale and just about the best reseller imaginable, making its own scaled-back ambitions looking less like a loss.

This week at VMworld 2016 we've learned that IBM is all-in with this partnership, having signed up as the first cloud to operate with the new Cloud Foundation that offers vSphere and vCenter as-a-service to help build hybrid clouds.

Patel also said that a great many other vCloud Air Network (VCAN) members are thriving as VMware users look for different types of cloudy engagements. Some users want managed cloud whereby they run a private cloud inside a host's bit barn. Others want platform-as-a-service. Some want infrastructure-as-a-service. With over 4,000 VCAN partners operating clouds, Patel and VMware CEO Pat Gelsinger are confident they can run a small-but-beautiful cloud and still be relevant.

Indeed, Gelsinger said several times during the conference that VCAN partners collectively win several billions of dollars a year in Vmware-cloud-related revenue. AWS and Azure each do about US$10bn a year (and rising fast). If total industry-wide vSphere-derived cloud revenue is half that, VMware's a big cloud player and is doing it on fat software licence margins.

Patel said vCloud Air is profitable without the licence payments VCAN partners contribute. So VMware is winning at both ends.

vCloud Air also continues to provide VMware with a testbed for vSphere development, and a very large-scale customer that's only too happy to provide feedback. The Register understands vCloud Air has been running what will become vSphere 6.5 later this year, so is helping with product development on that front. Patel said vCloud Air's disaster recovery product has also been adapted for the new vCloud Availability for vCloud Director, disaster recovery as-a-service-ware intended for use by VCAN partners.

VMware therefore looks to have found a route to cloud relevance without having to do the nasty and expensive part of clouds by itself. It also looks to have a thriving hybrid cloud business to build on with its new Cloud Foundation product. Which is not to say VMware thinks it has this nailed: it knows it has to keep coming up with ideas to make vSphere relevant as more workloads head skywards and with the debut of Cross-Cloud at VMworld this week has shown us one way it plans to give plenty of organisations plenty to consider. ®

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