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Summary:

VMware, the king of in-house server virtualization, wants partners to help it defeat Amazon for corporate cloud workloads. One problem: VMware has its own issues with its partners.

VMware's new CEO Pat Gelsinger.

VMware has gone to the mattresses —  telling its reseller and systems integration partners that if corporate workloads go to the Amazon cloud, everyone else is dead.

vmware-logoI’m exaggerating, but not much. Accounts out of VMware’s partner conference in Las Vegas this week really lay it out: CRN‘s Steve Burke quotes VMware CEO Pat Gelsinger telling VMware partners that “if a workload goes to Amazon [Web Services], you lose, and we have lost forever.”

Gelsinger continued:

“We want to own corporate workload … We all lose if they end up in these commodity public clouds. We want to extend our franchise from the private cloud into the public cloud and uniquely enable our customers with the benefits of both. Own the corporate workload now and forever.”

So who really loses or wins here? Would it really be everyone or would it be VMware? No one is blind to the fact that Amazon Web Services’ growing power is of huge concern to legacy IT vendors and even to some of AWS’ own partners, but VMware hasn’t exactly covered itself in glory when it comes to partner relationships. Long-time VMware partners always complain about having to compete with VMware sales in the field. And, Gelsinger’s verbiage sounds very much like Microsoft whining a few years ago that Microsoft partners lose when customers go to Google Apps.

logo_AWSIt’s a never-ending story: vendors love their VAR and integration partners until the vendor hits critical mass and business matures. Then those partners — and the margin they take from vendors — become an albatross and it’s time to go direct or to cut partner margin. Guess who loses then?

Conflating your own vendor-specific interests with those of your partners (and  users) is tricky stuff, as Matt Asay writes in ReadWrite.

CRN also quoted VMware President and COO  Carl Eschenbach telling conference attendees: “I look at this audience, and I look at VMware and the brand reputation we have in the enterprise, and I find it really hard to believe that we cannot collectively beat a company that sells books.”

To which, Amazon CTO Werner Vogels responded on Twitter:

The problem VMware has is that many of its own partners don’t see huge value in selling vCloud Director: Many will provide it but they often offer other options — OpenStack etc.– as well.

VMware’s advantage is that nearly every company of any size runs vSphere in-house, but parlaying that virtualization dominance into the public cloud has proven difficult. Fair or not, VMware is seen as the expensive, proprietary option while AWS has become the go-to plan, at least for  test and development environments. Now Amazon is pushing hard  to win production workloads as evidenced by its big AWS: Reinvent show last November.

Here’s the thing: Gelsinger’s a smart guy. If he really wants VMware partners to fight its battles, the company has to start being better to its partners and stop competing with them in the field. Oh, and it has to offer a public cloud strategy that people want to buy into.

  1. Yeah, I really like VMware solutions. I really liked Novell Netware too but when Windows better met my organization’s needs from a technical and support infrastructure perspective I switched. VMware is no different. When they stop meeting my technical and support needs I’ll switch to some other solution I’ll love. It maybe AWS or OpenStack or ….

    VMware is now in the position they put other infrastructure companies when they became a disruptive solution. AWS and OpenStack are disruptive and VMware needs to innovate its way forward. Otherwise, I have a post that talks about VMware going the way of Novell over the long term.

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  2. David Williams Friday, March 1, 2013

    why will anyone want to use VMWare when they can slide in KVM under OpenStack? One less check to cut to a vendor.

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    1. Two completely different use cases and solutions. Plus it’s extremely difficult to find OpenStack expertise and support. It took a long time for people to trust their entire infrastructure to VMware why would they all of a sudden trust it to OpenStack?

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  3. I support idea of VMWare to become as some of the alternative in enterprise computing as compared to companies like Amazon.

    I think Amazon still need some improvements in their cloud operations to avoid major down times we are seeing in the recent past. We do not see major outages in google cloud, Rackspace and Microsoft!!!

    Recently i did symantic analysis of Amazon’s cloud outages http://goo.gl/fYstp. As per my analysis Amazon may need rigor in SDLC and cloud operations.

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  4. What a joke. Are we pretending vmware didn’t acquire Dynamic Ops, once of the best Hybrid Cloud Management tools on the market last year and already release an update that integrates it even further into vSphere? Hello?

    They get it.

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  5. VMWare are right to be worried but quotes such as calling Amazon a bookstore don’t help. Sort of like Bill Gates saying all those years ago that “Apple was leading the way in colors”.

    Amazon are leading the way in a new generation of computing and VMWare are one of the companies that stands to lose the most. Disruptors eventually get disrupted and most times they are unable to prevent it because all the original “disruptive talent” has long ago left the building.

    This is a major dilemma for so many tech companies; how to stay relevant in the face of disruptive competition while still maintaining your revenue and EPS performance that Wall Street demands.

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