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AWS-VMware partnership remains a win-win -- for now

When AWS and VMware partnered up, it opened new revenue streams for each company. But does the deal mark a one-off collaboration or a long-term team-up?

The AWS-VMware partnership is still in its infancy, but with the start of the new year, it's a good time to shine a light on what the real objectives are for both companies and what they mean for enterprise IT.

While some experts scratched their heads about the deal, both companies could stand to benefit from the partnership, and their users hope for the same. Let's look at the deal as it stands from each company's perspective.

What's in it for VMware?

VMware attempted to build its own public cloud, vCloud Air, a few years ago but later sold it to focus on its core business, virtualization. But as AWS gained relevance in the marketplace, enterprises ditched VMware for AWS. This caught the attention of the VMware executive team and likely led to its interest in a partnership.

Let's not mince words: The deal essentially makes AWS a colocation provider for VMware, which is strange. VMware runs on bare metal within AWS, which means that, except for the underlying physical servers and network, it doesn't have any dependencies on Amazon.

The AWS-VMware partnership did come with a few key advantages for the virtualization giant. First, it slows the bleeding of those leaving VMware for AWS or other public clouds. VMware now has a strong cloud offering built on its own technology, and it rides on top of the most popular public cloud product.

Second, VMware has an aggressive sales force that can sell into cloud markets that weren't previously open to it only a year ago. Finally, this deal gives VMware some viability. Until the partnership, some experts and analysts bunched VMware in with other enterprise dinosaurs.

What's in it for AWS?

While the benefits to AWS aren't quite as clear, there are some advantages. VMware colocates with AWS, so there is an upside in cross-selling. AWS can also offer VMware services as part of its cloud platform, which can drive up sales. This enables AWS to potentially bring in more database, internet of things and machine learning customers, as well as sell dozens of other services.

While AWS has never been a fan of private clouds, the deal gives the cloud provider an on-premises and migration avenue. Some enterprises still aren't keen on moving all data and applications to the public cloud. They want to keep certain workloads local, which kept AWS out of some deals in the past. But now, the AWS-VMware partnership opens up those on-premises workloads as a potential revenue stream.

What's the future of the AWS-VMware partnership?

I suspect that AWS and VMware will keep some distance between each other, aside from a tighter coupling of sales organizations and cross-training. As sales and marketing teams at AWS and VMware more aggressively promote and sell VMware Cloud on AWS, sales could increase for both organizations.

Some other possibilities include one or both of the following:

  • Amazon could buy VMware or buy the rights to take the technology forward on AWS. This could mean that VMware moves from bare-metal services on AWS to running within AWS' native cloud infrastructure as an AWS-branded service.
  • In response to the Azure Stack private cloud, AWS and VMware could create an on-premises version of AWS that uses both VMware and AWS technology. This could enable workloads to migrate seamlessly between an AWS public cloud and an AWS-VMware private cloud.
This was last published in January 2018

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