Quo vadis VMware vCloud Hybrid Service? What to expect from vCHS?

In May of this year, with the vCloud hybrid service (vCHS) VMware presented its first infrastructure-as-a-service (IaaS) offering in a private beta. The infrastructure service is fully managed by VMware and is based on VMware vSphere. Companies that already have virtualized their own on-premise infrastructure with VMware, are to be given the opportunity to seamlessly expand their data center resources such as applications and processes to the cloud, to span a hybrid cloud. As part of the VMworld 2013 Europe in Barcelona in October, VMware has announced the availability of the vCHS in England with a new data center facility in Slough near London. The private beta of the European vCloud hybrid service will be available from the fourth quarter of 2013, with general availability planned for the first quarter of 2014. This step shows that VMware ascribes the public cloud an important role, but was especially made ​​to meet the needs of European customers.

Be softly with gleeful expectations?

During the press conference at VMworld in Barcelona VMware CEO Pat Gelsinger made ​​the glad announcement that instead of the expected 50 registrations even 100 participants have registered for the test of vCHS private beta. After all, this is an improvement over the expectations by 100 percent. However, 100 test customers cannot be a success for a vendor like VMware. Just take a look on the broad customer base and the effectiveness of their sales.

It is therefore necessary to ask the question how attractive a VMware IaaS offering actually can be and how attractive VMware technology, most notably VMware’s in the enterprise widespread hypervisor, will be in the future. Discussions with IT leaders arise more frequently that VMware’s hypervisor for cost reasons and sense of independence (lock-in) should be superseded by an open source hypervisor like KVM in short to medium term.

Challenges: Amazon Web Services and the partner network

With vCHS VMware is positioning itself exactly as about 95 percent of all vendors in the IaaS market: With compute power and storage. A service portfolio is not available. However, VMware sees the Amazon Web Services (AWS) as a main goal and primary competitor when it comes to attract customers.

However, AWS customers – also enterprise customers – use more than just the infrastructure. Every time I talk to AWS customers, I ask my standard question: “How many infrastructure-related AWS services do you use?” If I sum up all previous answers together, I come to an average of eleven to twelve services that an AWS customer is using. Most say that they would use as many services as necessary in order to have as little effort as possible. A key experience was a customer who, without hesitation and with wide eyes, said he is using 99 percent of all the services.

AWS is a popular and particularly attractive target. With the view on AWS only, VMware should be careful and not lose its network of partners and in particular lose the sight of the service provider that have built their infrastructures with VMware technology, including CSC, Dimension Data, Savvis, Tier 3, Verizon or Virtustream.

From first service providers there are already comments, to turn one’s back on VMware and support other hypervisors such as Microsoft Hyper-V. VMware sees these discussions so far relaxed as vCHS is intended purely for standardized workloads and VMware-powered service provider should take care of the specific customer needs.

Quo vadis vCloud Hybrid Service?

Because of its technology, which is used in a variety of cloud service providers, VMware operates passive for some time in the IaaS environment. However, the still in the beta vCloud hybrid Service is in direct competition to this partner network, so it will come to the question of trust between the two sides.

This is particularly due to the fact that vCHS offers more functionality than the typical vCloud Datacenter Service. This includes, among other things, the new vCloud hybrid service online marketplace, with which the user in accordance to VMware have access to more than 3,800 applications and services, which they can use in conjunction with vCHS.

VMware’s strategy consists primarily to build a seamless technical bridge between local VMware installations and vCHS – including the ability to transfer existing standard workloads between the own data center and vCHS. How much success VMware will have with this strategy needs to be seen.

One result of our exploration of the European cloud market has shown that most European companies like the properties of the cloud – flexible use, pay-per-use and scalability – but rather passed the construction and operation of their applications and systems to the provider (as a managed or hosted service).

These are good conditions for all service providers who have built their infrastructure based on VMware technology, but help customers with professional services on the way to the cloud. However, these are not the best conditions for VMware vCHS since vCHS will only support self-service and standard workloads.

As is typical for U.S. companies, VMware launched its European vCHS in England. The company has already announced plans to be active in other countries within Europe. The European commitment has mainly the background to appease the concerns of Europeans and to respond to their specific needs. Here VMware’s EMEA strategy envisages the points data locality, sovereignty, trust, security, compliance and governance. I do not want to appear too critical, but here the name is interchangeable: All cloud providers advertise with the same requirements.

Basically it can be said that the vCloud hybrid service in combination with the rest of VMware’s portfolio has a good chance to play a leading role in the IaaS market. This is mainly due to the broad customer base, a strong ecosystem and the many years of experience with enterprise customers.

According to VMware figures more than 500,000 customers including 100 percent of the Fortune 500, 100 percent of the Fortune Global 100 and 95 percent of the 100 DAX companies using VMware technology. Furthermore, more than 80 percent of virtualized workloads and a large number of mission-critical applications running on VMware.

This means that the transition to a VMware-based hybrid cloud is not an unusual step to scale without great expense. Furthermore, VMware like no other virtualization or cloud provider have a very large ecosystem of partners, resellers, consultants, trainers and distribution channels. With this ecosystem VMware has a great advantage over its competitors in the IaaS and generally in the cloud computing environment.

The situation is similar in the technical attractiveness. Organizationally VMware does not set on a typical public cloud environment, but either provides a physically isolated dedicated cloud per customer or a virtual private cloud. The dedicated cloud provides much more power than the virtual private cloud and provides the customers a physically separated pool of vCPUs and vRAM. The storage and network are logically isolated between the client. The virtual private cloud provides customers with the same design architecture of the dedicated cloud with resources, but these are only logical and not be physically separated.

With vCHS existing VMware infrastructures can comfortable be spanned to a hybrid cloud to move resources back and forth as needed. In addition, a company can thus build test and development or disaster recovery environments. However, this is for what a number of VMware service providers stand by, which could be the biggest challenge for both sides.


How to solve shadow IT and covered clouds #tsy13

The shadow IT or as VMware calls it, Covered Clouds (hidden used cloud services) are a major problem for businesses. According to a VMware study 37 percent of Europe’s leading IT decision makers suggest in their companies not covered expenses for cloud services. 58 percent of European knowledge workers would use unauthorized cloud services.

Pros and cons of shadow IT (Covered Clouds)

This unauthorized use has also its financial influences. In the affected companies, executives in the IT area believe that an average of 1.6 million euros will be spent without the permission of the company. This represents on average 15 percent of the annual IT budget of these companies.

However, this development is considered to be positive by many. 72 percent of IT managers see this as a benefit for their company. Because 31 percent of these are of the opinion that shadow IT and Covered Clouds accelerate growth and innovation. More than half reported that the company can thus respond more quickly to customer requirements.

However, there are major security concerns. Of those who do not advocate shadow IT, more than half feared a tightening of security risks. This insights VMware gave during the T-Systems Symposium 2013 in Dusseldorf.

A method: IT-as-a-Service

IT-as-a-Service is a business model in which the IT department is managed as a separate business unit and developed even products and services for the own company. Here, the IT department competes against external providers. Finally, at the present, departments have a limitless selection of other vendors in the market.

VMware has ​​it made to its mission to provide IT departments the technical means for this and sees IT-as-a-Service as a chance to balance the ratio of maintenance to innovation at 50:50 instead of investing the majority of the expenses in the maintenance. Today the ratio is about 80 percent (maintenance) to 20 percent (innovation).

VMware is right trying to establish itself as a leading provider of IT-as-a-Service solutions. As one of the few infrastructure providers on the market and with their abilities, they are able to provide the technical means for this turnaround in the enterprise. However, one must note, that IT-as-a-Service is not a technical approach, but must be anchored firmly in the minds of IT departments in order to be successfully implemented. Therefore, VMware can only show the technical means that are available to initiate the change.

Service portal as middleware for employees

IT-as-a-Service is not the ne plus ultra solution for the shadow IT, but may help to counteract this over the years grown phenomenon. The relevant concepts and technologies are available and need to be implemented.

Is an IT-as-a-Service philosophy emerged within the IT department, it should be started to establish an own service portal for employees, which controls the access to internal and external cloud services. This can be either used for infrastructure (virtual servers and storage) or software and platforms. The IT department becomes more and more a service broker and is able to ensure, through the use of external resources (hybrid model), that the employees can expect a high quality service. Thus, for example, a server can be provided to a developer within five minutes instead of several weeks. It should also be considered that developers are not only interested in computing power and memory but also need services to develop their own applications and services in a simpler way. This can be accomplished, among others, with the characteristics of a Platform-as-a-Service (PaaS).


Business in the Internet of Everything, Hybrid Cloud, A travelling suitcase #tsy13

During the breakout sessions at the T-Systems Symposium I visited three topics. One cloud, mobile and collaboration respectively The Internet of Things each. In the next days I’m going to write a comment or detailed analysis on each of these topics. However, I already would give a sneak preview, since these are really interesting use cases.

Business Transformation in the age of collaboration and The Internet of Things

Cisco sees its future as an enabler for the Internet of Everything (IoE). The difference to the today frequenty discussed Internet of Things (IoT) is in the amount of connected objects. Where IoT is connecting people with machines and machines with machines, IoE is on people, processes, data and things. This means there is a need for more connectivity. For this purpose, Cisco sees about 50 billionen smart objects in 2020 worldwide which are connected with each other. Here fog computing should help in the future what I’ve already introduced and analyzed.

Ready for Hybrid Cloud with T-Systems DSI vCloud = VMware vCloud Datacenter Services

A VMware study shows that 37 percent of leading european IT decision makers suppose not captured costs for used cloud services within their enterprise. In addition, 58 percent of european knowledge workers would use not approved cloud services. VMware sees a solution in IT-as-a-Service. Here IT departments position themselves as a competitor to external service provider. VMware also notes that historically arised IT silos like storage, network, server, Windows, Unix and Linux are the biggest challenges for IT-as-a-Service. Here the software-defined datacenter which is based on the components virtual server, software-defined network and software-defined storage should help. All together, this builds the foundation to migrate workloads on demand to a certified vCloud datacenter via a hybrid cloud.

Bag2Go: The modern suitcase on a lonely travel

With its Bag2Go, an intelligent bag, Airbus will separate people from their luggage. This means that a bag can have another route to the destination as the traveller itself. Therefore the bag offers various characterstics: self-weighing, self-labeling, self-travelling. Even the permanent tracking of the bag and its status is possible. Airbus promises that no changes are need to be made to the existing infrastructure of an airport. Airbus future goal is to establish fully interlinked transport capsules as a standard. An Internet of Things use case. Bag2Go uses the infrastructure of the T-Systems business cloud.


Dangerous: VMware underestimates OpenStack

Slowly we should seriously be worried who dictated VMware executives, what they have to say. In early March this year, COO Carl Eschenbach says, that he finds it really hard to believe that VMware and their partners cannot collectively beat a company that sells books (Note: Amazon). Well, the current reality looks different. Then in late March, a VMware employee from Germany comes to the conclusion, that VMware is the technology enabler of the cloud, and he currently see no other. That this is far from it, we all know, too. Lastly, CEO Pat Gelsinger puts another one on top and claims that OpenStack is not for the enterprise. Time for an enlightenment.

Grit your teeth and get to it!

In an interview with Network World, VMware CEO Pat Gelsinger spoke on OpenStack and does not expect that the open source project will have a significant reach in enterprise environments. Instead, he considered it as a framework service providers can use to build public clouds. In contrast, VMware has a very wide spread with extremely large VMware environment. The cost of switching and other topics are therefore not particularly effective. However, Gelsinger sees for cloud and service providers, in areas where VMware has not successfully done business in the past, a lot of potential for OpenStack.

Furthermore, Gelsinger considered OpenStack as a strategic initiative for VMware, which they are happy to support. VMware will ensure that its products and services work within cloud environments based on the open source solution. In this context OpenStack also opens new opportunities for VMware to enter the market for service providers, an area that VMware has neglected in the past. Therefore, VMware and Gelsinger see OpenStack as a way to line up wider.

Pride comes before a fall

Pat Gelsinger is right when he says that OpenStack is designed for service providers. VMware also remains to the leading virtualization vendors in the enterprise environment. However, this type of stereotypical thinking is dangerous for VMware. Because the tide can turn very quickly. Although Gelsinger like to see the high switching costs as a reason why companies should continue to rely on VMware. However, there is one thing to consider. VMware has its strengthen only(!) in virtualization – with the hypervisor. In relation to cloud computing, where OpenStack has its center of gravity, it does not look as rosy as it might look. To be honest, VMware has missed the trend to offer early solutions that make it possible to enable the virtualized infrastructure for the cloud, and serve with higher quality services and self-service capabilities to allow the IT department to become a service broker. Meanwhile, solutions are available, but the competition, not only from the open source environment, grows steadily.

This is also seen by IT buyers and decision makers. I’ve spoken with more than one IT manager who plans to exchange its VMware infrastructure against something open, in most cases KVM was named, and more cost-effective. This is just the virtualization layer which can break away. Furthermore, there are already some use cases of large companies (see on-premise private cloud) that use OpenStack to build a private cloud infrastructure. What also must not be forgotten is that more and more companies change in the direction of a hosted hosted private cloud or public cloud provider and the own data center will become less important over time. In this context, the hybrid cloud plays an increasingly important role to make the transfer and migration of data and systems more convenient. This is where OpenStack due to its wide distribution in hosted private cloud and public cloud environments has a great advantage over VMware.

With such statements, of course, VMware tries to suppress OpenStack from their own territory – on-premise enterprise customers – to place their own solutions. Nevertheless, VMware should not make the mistake of underestimating OpenStack.