VMworld 2017; VMware Cloud on AWS Comes into Focus

 

I was fairly critical of VMware’s (lack of) cloud progress and their announcements at VMworld 2016. They were quite nebulous in talking about the AWS partnership at that show and it was difficult to see what was actually going to be built and delivered. At VMworld 2017, I must admit that VMware has made a lot of progress and both the technical capabilities and business dynamics are coming into significantly sharper focus. Although I am not completely on board from a business perspective, I do think the technology makes sense and will gain traction at least among the most committed of VMware’s enterprise base.

First let’s cover the technology. Contrary to what I thought a year ago, VMware Cloud on AWS is actually running vSphere on a new flavor of AWS. Amazon is providing a new capability – physical servers on demand.  This enables VMware to provision servers and boot the vSphere hypervisor at Amazon data centers. This is new and different; it is distinct from the AWS public cloud VM-based offering that is the basis of AWS’s dominant position in the cloud market.

These ESX servers running at Amazon are managed by VMware technology and are highly compatible with on-premise VMware infrastructure. They utilize VMware’s vSphere companion technologies such as vSAN and NSX. They are managed using vCenter and it has an “Elastic DRS” capability, that is able to add ESX hosts when required based on workload demands. Networking has some interesting wrinkles – the physical servers at AWS have virtual networking built into the server NICs and this network stack is now accessed directly by ESX with NSX layered on top. It is using an Amazon VPC and although it sounds like nested network virtualization, it looks to be better integrated and hence more efficient than that. AWS networking is underneath and it uses AWS direct connect. Traditional AWS services, such as their PaaS stack and S3 are accessible efficiently, without having to go back out over the general purpose internet. ·

What this offering delivers is physical servers that are hosted at Amazon and can now be added to on-premise ESX clusters as resources and used very similarly, hence an integrated hybrid cloud. This is elegant from a purely technology perspective and certainly a very easy on-ramp to the “cloud” for current VMware customers.

That said though, I think it will be interesting to watch the business traction. In this new offering, Amazon is really just a hosting provider for VMware customers. The offering does not allow you to add scale-out capacity on demand by automatically provisioning VMs (or containers) just when you need them. This is one of the fundamental and desirable business characteristics of the cloud. Instead, it allows you to add ESX servers on demand into distributed clusters in a hybrid cloud fashion and migrate VMs to them. It will be sold from VMware by ESX host with a 4 node minimum. This is not the dynamic, flexible capacity on demand that is expected from the dominant public cloud offerings, but it will be interesting to see how VMware’s installed base adopts it and makes use of it.

What’s in it for Amazon? Even though VMware will be selling this, Amazon will have indirect access to VMware’s enterprise customers and the vSphere installed base, as well as better access/incentives for those customers to use other AWS services, such as PaaS, RDS, S3 or Lambda. And it jointly gives VMware and Amazon a credible hybrid cloud offering to compete with Microsoft Azure and Azure Stack.

In summary, I think this is a fairly elegant technical offering that appears well thought out and should give VMware a much more compelling offering in the cloud. However, technical elegance and compatibility with pervasive, on-premise vSphere may not be enough when vCloud on AWS is not really offering the economics or business flexibility that is expected in the cloud.

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