Apologies if you've heard it before, but Airbnb is bigger than Hilton or Marriot, but doesn't own a single building. Uber is bigger than taxi companies but has never changed a tyre or burned a drop of gasoline.
And now VMware's new alliance with Amazon Web Services makes it (virtually) the world's biggest cloud without having to operate any data centres.
That's a pretty good trick and VMware has pulled it off with IBM, Century Link, OVH, NTT and Rackspace. And those are just the top-tier global cloud concerns signed up for the vCloud Air Network: there's thousands more out there running vSphere-powered clouds, too. And they all pay VMware for vSphere at the lovely fat margins enterprise software businesses are able to reap.
Acquiring a global, diverse cloud without building one means VMware deserves to be mentioned among – pardon the word – “disruptors” who have made a business out of a platform and in so doing found a way to make integrated businesses look archaic.
The AWS relationship is a little different, because this time VMware has also pulled off the trick of keeping the relationship with the customer, albeit at the cost of having to manage vSphere inside AWS. But that's a small price to pay for global reach, a relationship with the runaway leader in cloud and a new way to sell services. Which are of course also high-margin.
But VMware's clever cloud is no guarantee it's on to a winner, because it delivering an on-premises experience that now extends to the cloud. Microsoft, with Azure Stack, will offer a cloud experience that now reaches into the data centre. And that cloud experience – super-easy admin, limitless scale, instant provisioning – is rapidly becoming the new normal.
Gartner research director Michael Warrilow reckons that's a weakness for VMware. In conversation with The Register he said the AWS deal is “hybrid virtualisation” rather than hybrid cloud. Warrilow points out that cloud is a lot more than just VMs and that customers therefore expect that hybrid cloud will replicate that experience.
This deal leaves most of AWS' innovative bits out of the picture and therefore asks vSphere users to keep their vSphere investment walled off from the other parts of AWS' cloud. If they want cloud-style innovation, pure-play cloud will still be the place to go for that. Which means those who find VMware's containerised and cloud-native application plans distasteful may look elsewhere.
For today, at least, this deal looks valuable for both VMware and AWS. But VMware's continued diversification beyond vSphere looks more sensible with every passing day. So bring on Project Goldilocks and its new approach to security, the ongoing evolution of NSX and the Cross-Cloud architecture. ®