Dell and Amazon are starting to make a positive impact on VMware. Once we learned about the Dell acquisition of EMC, there was a lot of speculation on how this acquisition would affect VMware moving forward. I believe we are starting to see some of the positive effects of this acquisition.
VMware has made an adjustment and changed the reporting dates of its calendar quarters to align with Dell’s. There have been some reports and indicators that VMware and Dell may be handling some of the larger enterprise licensing agreements (ELAs) directly and are driving mixed results from Dell’s partners. However, those partners are reporting a positive momentum with license renewals and new license sales of other applications in the VMware portfolio, especially in the cloud space.
At the same time, Dell’s contribution within the sales force has been ramping up ahead of schedule, and faster then what was expected for VMware, since some incentive adjustments have been put into place. These incentives offer a potential profitable path for the channel partner community itself. The biggest “buzz” for VMware in 2017 is the anticipation of the VMware and Amazon offerings that should be available later this year. These offerings are expected to be another boom for VMware, NSX, and vMotion technologies.
I believe that once VMware has perfected the ability to vMotion in and out of AWS at will, it will result in huge opportunities and foster growth for both Amazon and VMware. Amazon has been looking for a bigger footprint and presence in the corporate world, and this partnership presents a world of new opportunities as well as a depth of new use cases. It will also play a part in helping corporate customers looking to solidify and finalize their cloud strategies, which in turn should help to drive growth for both VMware and Amazon for at least the next five years, as well as for the cloud strategies that are being implemented. I also believe we will see some sort of internal AWS resource migrations. AWS vMotion should help companies regain control and accountability for resources currently deployed on AWS. This transparency and insight should encourage future migration of resources to AWS.
In multiple conversations with some of my peers, I have heard a repeated theme of the corporate push to the cloud. This has been the mantra for the last couple of years. Unfortunately, for some corporations, while this was a task that looked great in a PowerPoint presentation, the implementation was something else entirely. One of the most common themes of these conversations was companies’ lack of understanding of and control over the company resources that have been deployed to AWS. Companies get their bill from Amazon and in some cases are left wondering what kind of data they have in the public cloud now. Add to that the new security issues as of late, such as the WannaCry ransomware.
Are corporate resources in compliance with corporate IT standards and procedures? How many rogue resources are there? What kind of risk does this bring to the corporation? These are some of the reasons why I believe corporations will be willing to jump on the VMware and Amazon bandwagon sooner rather than later. This has the potential to reshape or at least be responsible for adjusting some of the cloud strategies that are currently being implemented.
I have heard rumors that the first two AWS/VMware regions will launch in mid-July. VMware customers appear to be requesting the product and wish to be part of the initial rollout, migrating existing legacy on-site workloads into the cloud, with greater scale opportunities and better control and insight than is available for preexisting application.
The sale opportunity for this partnership is expected to result in additional bundle creations, with notable opportunities for the growth of NSX (networking application) and the ability to vMotion current compute resources at will in and out of the private and public cloud spaces. Two of the five North American availability zones—Oregon and Northern Virginia—will be the starting points, and an expansion to Europe is expected in 2018. I have also heard that the initial sales opportunities from this partnership will be largely direct to Amazon and/or VMware. An indirect channel strategy should be coming to light in 2018, with services offered in a manner similar to that for vCloud Air, with ELA opportunities and service credits. I have also heard that there will be at least an initial high price tag for the partnership services, and this may limit initial adoption to the larger enterprises.
All in all, it appears that the course that VMware has charted with Amazon, as well as the course that was charted for VMware due to the Dell acquisitions, appear to offer VMware a solid future well into the next decade. It has become easy to see how both Dell and Amazon are starting to make a positive impact for VMware.