This series on VMware cloud computing considers application agility and automation, as well as VMware hosting vs. heterogeneous software stacks. Part 3, our final installment, examines whether VMware knows what cloud computing should cost.
It's no secret that VMware has clashed with its virtualization customers over pricing, including the so-called vRAM tax. Although VMware repealed that vRAM pricing structure, some experts speculate that VMware's pricing decisions with vSphere 5.0 so damaged customer confidence that organizations will remain wary of VMware as a vendor that maximizes profits no matter what. With respect to cloud computing, VMware's current pricing structure might not align with cloud computing economics and potential users' wallets.
Some industry watchers dismiss Amazon Web Services' (AWS) cloud pricing structure as based on a commodity offering that is incapable of meeting enterprise IT requirements. The fact remains that AWS sets the market expectation in any cloud computing cost comparison, and is heavily courting the enterprise IT customer. Amazon prices AWS services on a per-use basis. Typical users will pay a base charge for machine image hosting, purchasing basic hosting or additional features. Cloud storage capacity and data transferred to storage add cost, sometimes more than machine hosting. Amazon's cloud offering, while it has drawbacks, offers highly flexible OS-independent proprietary APIs and downward-trending prices. Today, anyone charging more for cloud hosting services than AWS has to justify how they deliver more value.
VMware's history with cloud computing
Automation: vCenter Orchestrator
Management: vCloud Automation Center
Apps: vFabric App Director
Will CSPs open their wallets?
VMware's corporate customers appear to have made their peace with the company's current pricing, and are able to manage it within their existing budgets. The real challenge for VMware's cloud ambitions lies with public cloud providers, where the question of whether or not they can accommodate VMware hosting costs within their overall infrastructure budget is much less settled. VMware-based cloud service providers (CSPs) incur a significant cost to incorporate the technology; the jury is out on whether they will be successful with this infrastructure. And many VMware-based CSPs are now implementing a second offering based on the open-source cloud projects OpenStack and CloudStack. This indicates that CSPs are hedging their bets for users specifying a cloud computing purchase based on cost comparisons.
Cloud computing has unstoppable momentum as a technology platform. Much of what made VMware virtualization successful could hamper the company's cloud hosting products. In 2013, VMware's cloud suite pricing structure faces a market sustainability test. Expect ongoing discussions between VMware and its CSP customers about the company's prices.