VMware Vs. Cloud Partners: Think Hunger Games - InformationWeek

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VMware Vs. Cloud Partners: Think Hunger Games
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User Rank: Apprentice
11/20/2013 | 1:45:57 PM
Cost factor
--The key question has evolved from "Why cloud?" to "Which vCloud?"--

Agree with this. Organizations are clearly attracted by the convenience of using public cloud infrastructure but at the same time not clear on the the economic benefits or even the viability of using public cloud offering. This is getting more complex as the vendor choices are increasing. VMware's entry into this space is definitely interesting. Not everybody wants to fly economy, and not everybody can afford a long layover for cheaper flight tickets. This is why I think there is a clear need for expedia like service for cloud shopping.  Yesterday I posted a blog entry on this topic "Do Hybrid Clouds Make cents?" (http://blog.cloudphysics.com/blog/2013/11/18/do-hybrid-clouds-make-cents-free-cost-calculator-for-aws) - Having a easy to use cost calculator is one small step towards this direction, but there is a clearly lot more to do.
User Rank: Ninja
11/20/2013 | 8:12:34 AM
A different Hunger Games
I see the vCloud solutions less like the Hunger Games and more like all of the cupcake shops I've seen pop up and disappear over the past year.  When you have something that is new and trendy you tend to get a lot of people jumping in hoping to ride the wave but for those who barely now how to swim it can be a rough ride.  The shops that tend to close up tend to be either the types that were testing the waters to see if they really wanted to get in deeper like Dell or they were in over their heads from the start like many smaller companies.  Having VMware step into the market only makes the waves bigger and will push the less capable companies out but those with good business plans and solid offerings will adjust and keep on going. As the market matures it will be more predictable but for now anyone in the virtual server or cloud services market is going to have to deal with a constantly changing environment.
User Rank: Apprentice
11/19/2013 | 7:15:19 PM
Re: Undercutting?
Hi Lorna,

Establishing value through differentiation is the best path forward for non-giants as the market for "compute" continues to commoditize and forces prices down.   I believe this is also leading to the resort / hotel / bed & breakfast ecosystem that other posters are describing.  Perhaps more specifically it is helping to mature the large generalist providers and accellerate the evolution of specialist providers focusing on narrow but newer and highly valuable cloud use cases like pay for use Disaster Recovery, PII-PHI compliant data protection, etc..   as was already stated, both developments are great for the consumer!


User Rank: Author
11/19/2013 | 1:31:16 PM
Re: Room for more than VMware and Amazon?
I like the analogy of the big hotels and the bed and breakfasts. Think its very applicable. I don't think VMWare will fail, nor will they dominate.  Some of the smaller providers will fall by the wayside (the 'dead canaries'), though whether its because of VMWare's move or they would have fallen anyway would be hard to tell.
IW Pick
User Rank: Strategist
11/19/2013 | 11:17:05 AM
VMware doesn't do Crazy Eddy prices
Hey,  Lorna, it takes a special business psychology to try to take market share through price cutting.... and VMware doesn't have it. On the contrary, its a premium spread company. VMware is leaving the outlying areas of virtualization to Microsoft and Citrix but dominating the data center and charging a premium for it. It's whole problem with getting into cloud is that it has little experience in operating infrstructure as a service, it's opening its own data centers to get some, but as it learns, Amazon and Microsoft keep pushing the break-even point lower. VMware will damage its quarterly earnings if it tries to compete on price, so don't hold your breath waiting for that one.
User Rank: Author
11/19/2013 | 10:25:38 AM
Room for more than VMware and Amazon?
There is little doubt managing this coopetition relationship will be tricky for both sides. However, the cloud community has shown time and time again that 1. customers are afraid of lock-in and 2. customers know smaller companies can be nimble.

Our contributor, Cloudonomics author and Telx senior VP Joe Weinman used a good analogy with our cloud community editor Charlie Babcock earlier this year: "Will the Marriott, Starwood and International hotel chains exist in the future? Certainly. So will bed and breakfasts," he said.
Lorna Garey
Lorna Garey,
User Rank: Author
11/19/2013 | 9:38:51 AM
Do you get any sense that VMware is (or may at some point) use its size to offer these services at a loss to undercut the competition? Certainly we've seen plenty of tech titans lowball to clear the field of rivals, only to then raise prices once there were fewer options available to IT.

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