Reports: VMware, AWS Join Forces in Battle for Enterprise Cloud Market

Given their respective dominance in enterprise data center software and cloud, the deal would give Microsoft and Google much to think about.

Yevgeniy Sverdlik

October 6, 2016

2 Min Read
VMware CEO Pat Gelsigner speaking at VMworld 2014 in San Francisco.VMware

In what may be the boldest step yet in VMware’s recently announced overhaul of the business strategy around cloud services, the company has partnered with its once arch rival in the cloud market, Amazon Web Services, multiple tech news sites reported, citing anonymous sources close to both companies.

Amazon and VMware are planning to announce the partnership next week in San Francisco, according to Fortune and SiliconAngle.

Details about the nature of the partnership have not been revealed, but if the deal is similar to the one VMware recently struck with IBM, it will create a disruptive combination that will make it a lot more difficult for AWS rivals, who are already far behind in terms of cloud market share, to catch up. The partnership with IBM is to provide VMware’s ubiquitous data center virtualization software stack as a service on IBM’s cloud. If the new reports are true, combining the most widely used enterprise infrastructure software stack with the world’s biggest cloud (AWS) will create a dominating force in the battle for the lucrative enterprise cloud market.

After attempting for several years to carve out a portion of the enterprise cloud market as a service provider in its own right, VMware in August announced it would no longer pursue that strategy. Its new game-plan is to partner with cloud market leaders and combine its technology with their services.

VMware and its cloud business have recently gone through some major changes. Last month, the company became a subsidiary of Dell Technologies, the giant that was formed after Dell acquired EMC, which owned 80 percent of VMware. Earlier this year, Bill Fathers, who ran VMware’s cloud business, left the company, and so did Simone Brunozzi, VP and chief technologist for VMware Hybrid Cloud.

Also recently, VMware sold its government cloud business to data center service provider QTS Realty Trust, which used to act as a partner, selling the services to government agencies and operating the infrastructure that hosts them. QTS announced the deal this week.

VMware’s new cloud strategy has a name: VMware Cloud Foundation. The foundation combines its vSphere, Virtual SAN, and NSX (software for server, storage, and network virtualization, respectively) into a VMware cloud stack sold as a service, either on-prem or in service provider data centers.

The idea is to enable enterprises to combine their existing VMware environments with cloud services in as seamless a way as possible. If VMware and Amazon manage to make it quick and easy for customers to extend their on-prem VMware infrastructure into AWS, their cloud rivals Microsoft and Google will have a lot to think about, given VMware’s enormous enterprise install base.

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