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VMware lays out prices for hybrid cloud offering — now customers have the ball

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VMware (s vmw) re-announced its long-awaited vCloud Hybrid Service as an Infrastructure-as-a-Service (IaaS) play for current vSphere customers to use. It will become available in an early access program in June and generally available in the third quarter of the year.

The company is pitching the platform for both legacy vSphere applications already running in company data centers  and for brand new applications designed from the ground up.  VMware execs up to and including CEO Pat Gelsinger promised “seamless” interoperability between on-premises implementation and vCloud Hybrid Services.

They promised it will let customers move data from on-premise infrastructure to public clouds on Layer 2 or Layer 3 networks and create the same virtual-networking infrastructure like load balancers and firewalls. Management will happen all inside current VMware software tools. Managing and moving virtual machines will be possible inside vSphere through a free-plugin. The idea is to help customers move existing applications around and develop new applications on the public cloud. Some customers will want to run specified applications on the public cloud and keep key data on premises, said Gelsinger, who will be a featured speaker at GigaOM Structure next month.

Bill Fathers, VMware’s senior vice president and general manager of hybrid cloud services, described vCloud Hybrid Service as the easiest public cloud to adopt. It will be available through current partners, so licensing won’t be different. And customers can get support for the vCloud Hybrid Service from VMware, just as they can for other services.

Partners that endorsed the platform included  Tibco(s tibx), Microsoft, (s msft) SAP, Puppet Labs (see disclosure) and Pivotal, VMware’s step-brother that is co-owned by VMware and parent company EMC(s emc). VMware  holds a significant stake in Puppet. “VMware will be the first and only cloud provider to provide SAP software, including HANA, as a subscription service on premise and in the cloud,” Fathers said.

The vCloud Hybrid Service actually has two flavors: a Dedicated Cloud mode has “physically isolated and reserved compute resources” for predictable workloads and a Virtual Private Cloud for seasonal workloads that require greater elasticity but are multitenant in nature. The former service will start at 13 cents an hour for a 1 GB virtual machine with a single processor on an annual basis, while the latter will start at 4.5 cents an hour on a monthly basis. But those prices will come as year-long licenses. Fathers said he expects customers to use both in parallel.

vmw annual prices hybrid 2

To provide the infrastructure for the vCloud Hybrid Service in the United States, VMware will pull from infrastructure in Santa Clara, Calif.; Las Vegas; Dallas; and Sterling, Va. Fathers said the plan is for “an asset-light model” in which the facilities in those cities are “third-party data centers.”

Beta customer, Julio Sobral, senior vice president of post production for Fox Broadcasting, said the movement of certain applications to VMware’s public cloud, particularly collaboration tools for dispersed employees, had, in fact, been “seamless.”

vmw monthly hybrid prices 2

Other beta customers include the state of Michigan, the city of Melrose, Mass.; and Planview. The question is how many of VMware’s roughly 500,000 customers will move onto the service too, rather than keep using IaaS providers such as Amazon (a amzn) Web Services for certain applications, as some customers have.

There could also be friction with existing VMware cloud partners. They have been underwhelmed by the offering and the service provider partners not selected to host the offering now feel they are competing with their supplier, as my colleague Barb Darrow has noted.

DisclosurePuppet Labs is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

This story was updated Wednesday with corrected pricing charts from VMware. The company originally posted to its website different pricing models for storage and bandwidth. Additionally, a sentence about the lack of information about storage and network prices was removed.

One Response to “VMware lays out prices for hybrid cloud offering — now customers have the ball”

  1. Perhaps the more broadly interesting aspect of this is the comments by Mathew Lodge, VMware’s VP of Cloud Services who said there was a “limited adoption of public cloud services, usually in a couple of applications; but there wasn’t broad adoption in enterprises.”[1]

    There is obviously some spin there designed to support the release of this product from VMWare but since they are much more of an enterprise company than AWS is, this is interesting insight. It perhaps shows that the likes of OpenStack are a real threat to AWS, if not as direct and obvious as Google Compute Engine.