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As the public cloud market continues to gain traction, VMware is trying to carve out a viable, long-term role --...
an effort that has led the vendor to find an unlikely partner in Microsoft.
In September 2017, the VMware rival unveiled Azure Migrate, a service that moves private cloud VMware workloads to Microsoft's public cloud platform. Although initially opposed to this service, VMware has since changed its tune and is now developing support plans with Microsoft.
The move to migrate VMware to Azure comes as interest in the public cloud continues to rise. Gartner projects the worldwide public cloud services market revenue to grow 18.5% in 2017 and to reach $260.2 billion, up from $219.6 billion in 2016. As a result, data centers will continue to change as vendors develop new products and form new, surprising relationships.
VMware Cloud on AWS reveals new possibilities
Amazon Web Services (AWS) continues to be the leading public cloud supplier. According to Synergy Research, the firm's market share is close to 40% -- as much as its next five competitors combined.
Over the past few years, VMware has worked with AWS to support customers' public cloud needs.
"VMware has been trying to serve enterprise customers who want to close the chasm between their [on-]premises solutions and public cloud infrastructure," said Jay Lyman, principal analyst at 451 Research.
In August 2017, the two vendors released VMware Cloud on AWS, a service that enables enterprises to run a VMware software-defined data center -- which includes vSphere, vSAN, NSX and vCenter management services -- on AWS's public cloud platform.
Like many cloud services, this helps companies provision computing resources quickly.
"With VMware Cloud on AWS, a business can deploy a complete data center in a few hours," said Marco Alcala, CEO at Alcala Consulting.
Reticence to support the ability to migrate VMware to Azure
VMware initially ignored Microsoft when it designed its public cloud strategy, so the Redmond, Wash. vendor's announcement in September drew a good deal of attention. Microsoft designed Azure Migrate to help firms migrate VMware workloads to Azure. This service includes a free tool that accesses system resources, illustrates connections and dependencies, and provides organizations with a migration path.
Azure Migrate includes cost management tools that Microsoft acquired from Cloudyn in June 2017 that enable potential customers to determine if a transition to Azure is a sound financial decision. If so, a business can then migrate the workload to Azure and manage it with VMware management tools.
The service appeals to businesses that run Microsoft software on top of VMware virtualization services. In some cases, organizations have already moved some applications to Azure.
"Most of our customers who had Microsoft Exchange on premises have migrated to Office/365," said Alcala, whose firm is a VMware and Microsoft business partner that serves financial services, restaurants and nonprofit organizations across the U.S. These organizations might want to continue to migrate VMware to Azure.
Azure Migrate, which is in preview mode and is expected to become generally available in the first half of 2018, has been controversial. Microsoft originally developed the service independent of VMware, which meant that the vendor wouldn't have to share revenue with VMware if customers chose to migrate their VMware workloads to Azure.
VMware disapproved of what many saw to be a hostile move, and it made clear that if problems arose with Azure Migrate's software, customers would need to look to Microsoft for help. Azure Migrate "has been developed independent of VMware," said Ajay Patel, VMware senior vice president, in a blog post, "and is neither certified nor supported by VMware."
However, when faced with the reality that refusing to support Azure Migrate would result in a loss of potential revenue, VMware changed its stance. According to Patel's updated blog post, the company is now "in the process of engaging with the partner to ensure compliance and that the appropriate support model is in place."
Microsoft's approach to partnerships might also explain VMware's sudden reversal.
"Microsoft has come a long, long way in working with other vendors and taking more of an open source and less of a proprietary approach to selling its solutions," Lyman said. "They understand that today's market demands partnerships."
The two vendors are in negotiations for an agreement that could be similar to what is available with VMware Cloud on AWS; details should emerge in early 2018.
Cost and complexity trouble hybrid cloud management
VMware support comes with VMware Cloud on AWS, but at a high price. Costs run 50% to 70% higher than native AWS implementations. According to Alcala, none of his VMware clients have shown interest in the service because of that cost threshold.
Some firms might decide that VMware support makes it worth the premium. VMware support ranks high on customer surveys, so firms might pay for it if they move important applications to the public cloud, according to Lyman.
Hybrid cloud management often requires organizations to have two sets of tools: one for on-premises equipment and another for the cloud. Some organizations have invested significant resources to develop expertise and business processes to run on-premises systems efficiently and don't want to learn another set of tools, which would be necessary if they migrate parts of an application from on premises to native AWS.
This potential ability to migrate VMware to Azure is another sign that the rise of the public cloud is transforming the data center landscape.
"The idea that bitter rivals, like VMware and Microsoft, would be working cooperatively to develop hybrid and public services was unthinkable a few years ago," Lyman said. "But market conditions today are rapidly changing and creating some strange bedfellows."