But does AWS really need VMware?

The big news coming out of VMware's annual VMworld event this week is that the company's promised VMw
ARCHITECHT
But does AWS really need VMware?
By ARCHITECHT • Issue #129 • View online
The big news coming out of VMware’s annual VMworld event this week is that the company’s promised VMware-on-AWS product is now available. This is probably very good news for VMware, which needs a viable cloud product after years of confusing cloud strategies that only got fuzzier as a result of the Dell-EMC merger last year. Letting customers run and manage their VMware machines on the Amazon Web Services cloud is an approach that seems to fit that bill.
However, it’s hard to see how this partnership is going to move the needle much for AWS. Look at the companies’ most-recent fiscal years—2016—during which VMware grew about 9 percent to just over $7 billion in revenue, while AWS grew about 45 percent to more than $12.2 billion in revenue. It’s on pace for about $16 billion in revenue in 2017, and an investment analyst at Jefferies predicts AWS will hit $55 billion in revenue by 2022.
All of this without running what will likely be a relatively small number of VMware instances. 
I might be wrong, but I look at this as essentially a larger (Nutanix does less than $1 billion in annual revenue at this point), and less container-focused, version of the deal Google and Nutanix announced in June. There, too, the on-prem partner of the hybrid cloud partnership is delivering workloads from existing customers to the public cloud partner, but I don’t see too much traffic going the other way. AWS and Google collect some additional revenue from partners’ customers, while the partners own the customer relationship and largely dictate the user experience.
I think the more interesting hybrid cloud approaches are the ones where the cloud—or cloud-native—side of the partnership is leading the charge. When and where companies want the benefits of the cloud, the whole idea for most is that they expressly do not want the status quo. Microsoft is able to do this by itself via the Azure Stack appliance, which brings the Azure experience and service inside a company’s data center. Container-orchestration companies want to abstract management, scaling, etc, to layers above the VM altogether, running wherever those machines happen to be hosted. 
There will continue to be a lot of big workloads running inside company data centers. If AWS and Google really want a shot at owning them, they’ll probably need to get their hands (and code) a little dirty by going to where those applications live and showing there’s a better way of doing things.

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ARCHITECHT delivers the most interesting news and information about the business impacts of cloud computing, artificial intelligence, and other trends reshaping enterprise IT. Curated by Derrick Harris.

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