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Enterprises weigh VMware Cloud on AWS, as vendors pivot cloud strategies

After a nine-month beta period and lots of unanswered questions, VMware Cloud on AWS is finally available, and enterprises can now judge if the service fits their needs.

LAS VEGAS -- The highly anticipated VMware Cloud on AWS is finally available. For potential users, now comes the...

hard part.

The service that brings the leading private cloud provider's environments to the leading public cloud provider's platform has generated a lot of buzz, but the lack of details has kept many potential users on the fence. Important information about pricing and capabilities was disclosed Monday here at VMworld. And, now, VMware customers must decide if it's worth it to make the leap.

"I don't think the customer interest is fully baked," said David Lucky, director of product management for Datapipe, a managed cloud services provider in Jersey City, N.J., that works closely with AWS and VMware. "But it's getting a lot of attention from our customers."

Part of the allure of this deal is the ability to put VMware environments next to Amazon cloud services, such as DynamoDB and Relational Database Service. There are fast, private networks connecting the two services, but there are still functionality limitations.

"It's separate, really," Lucky said. "It's got its own portal, its own billing and pricing. You do link your AWS account into it and connect it, but I could see there's a lot more opportunity to build on that."

Pricing for the VMware-sold product is complex, and it deviates in some important ways from the standard AWS model. Purchases are made on a per-host basis and can be billed by the hour, or in reserved capacity on one- and three-year contracts.

The three-year contract costs $109,366 per host, which would save about 50%, compared with the on-demand hourly billing rate, according to VMware. Another program can cut costs by up 25% based on their on-premises VMware product licenses, as long as those on-premises products remain active.

There are separate charges for IP and data transfers, as the standard AWS egress fees still apply. Each host has two CPUs, 36 cores, 72 hyper-threads, 512 Gibibyte RAM and local flash storage.

If a company goes with the three-year contract, the estimated total cost of ownership for VMware Cloud on AWS is up to $0.09 per VM, per hour, according to VMware. That's comparable to native cloud instance costs and a savings of up to $0.08 per VM, per hour than the traditional on-premises setup.

Stay or go?

Whether the move is worth the cost will depend on an organization's in-house environments -- those that are less efficient or bloated are the best candidates, said Kyle Hilgendorf, a Gartner analyst.

Erik Anderson, a senior network engineer at a Midwest healthcare company, said his team works entirely on premises, but is looking at the public cloud to localize workloads in other parts of the globe. Where those workloads will land will depend on cost and other factors, but those decisions won't be made anytime soon, he said.

"If it turns out the stuff that VMware and AWS is doing reduces operational expenses and administrative headaches, that would be the ideal choice," Anderson said.

The service is built on bare metal, and VMware will carve out capacity within AWS data centers to then provide scalable infrastructure to its customers. It's the first time bare metal has been sold on AWS, and VMware's solid-state drive architecture is different from AWS', but executives for both companies don't foresee capacity issues beyond what users typically find when requesting resources on AWS.

For customers, adding VMware Cloud capacity as part of the service will be no different than any of the other instance types they sell, said AWS CEO Andy Jassy.

The service may even accelerate adoption among companies that already have a footprint in both environments, said Peter Scott, COO of DivvyCloud, a multicloud automation and management company in Arlington, Va., that is among the partner ecosystem for VMware Cloud on AWS.

IT shops, however, are wary of moving some workloads to the public cloud that are built on a different operating model and aren't easily or flexibly scalable, he said.

"You're essentially taking a whole lot of legacy workloads and sticking them in public cloud, which is ephemeral and by its very definition is very different," Scott said. "If you're going to take this stuff and put it in the public cloud that runs 24/7, 365 days a year, you'd be better off back in your data center."

There are limitations to the new capabilities. Customers can bring applications back and forth, but they will still have to pay the standard AWS egress fees. Amazon doesn't charge customers to bring data into the cloud, but the cost to pull data out is prohibitive for most users, and it's a main reason the public cloud is criticized for workload lock-in. Also, the VMware Cloud on AWS offering is currently limited to the AWS U.S. West (Oregon) region, and it won't be available in other regions until 2018.

About-face, march

AWS and VMware executives said this is just the first step in the partnership. And though they didn't provide specifics about future services, they listed tighter integration and migration assistance as items to improve.

"I definitely sense Amazon sees a lot of opportunity and investing more of their time going forward," Datapipe's Lucky said.

AWS and VMware executives went out of their way to characterize the partnership as more than just marketing, and observers said the product is surprisingly mature, despite the early limitations and the lengthy wait to bring it to market.

And though the deal was publicly discussed for nine months, the actual product release culminates a shifted cloud strategy for both companies. AWS was once borderline dismissive about the future of hybrid cloud, and VMware initially sought to build its own public cloud to usurp AWS and keep everything within its own ecosystem. Officials for both companies, however, effusively praised each other and cited huge potential to extend these capabilities to thousands of customers in the years ahead.

And now that some of the critical information about the service is public -- particularly the pricing -- customers will ultimately decide if the adoption will meet the hype.

"Without knowing the price, how attractive it is is relative, and we got a lot of questions about that," Lucky said. "Now, at least it's out there, so the conversation can move past that."

Trevor Jones is a news writer with SearchCloudComputing and SearchAWS. Contact him at tjones@techtarget.com.

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