VMware: "If Amazon Wins, We All Lose"

Someone has a problem, and it doesn't appear to be Amazon. In a somewhat shocking declaration, VMware CEO Pat Gelsinger told a group of VMware partners that if "a workload goes to Amazon, you lose, and we have lost forever," as reported by CRN. This is true so far as it goes: the more enterprises move applications to the public cloud, the less need they have for VMware's technology, or for other datacenter-bound infrastructure.

But where Gelsinger really tips his hand is addressing why he wants to keep customers out of the public cloud:

We want to own corporate workload. We all lose if they end up in these commodity public clouds. We want to extend our franchise from the private cloud into the public cloud and uniquely enable our customers with the benefits of both. Own the corporate workload now and forever.

To save customers money? To boost their productivity? To benefit the customer in any way? No, no and no.

Instead, VMware's plea essentially translates to "you have to help us lock customers into our platform," as Benchmark general partner Bill Gurley suggests. It's fine for VMware to say such things in the privacy of its boardroom, but on stage? In front of hundreds of partners and the press? Not wise.

Those familiar with the early days of open source will appreciate the similarities to Microsoft's attacks on open source. When Microsoft wrung its hands about the GPL being "bad for the world," it wasn't really worried about customers. It was worried about its business model. Microsoft knew how to compete with cheap. But free? That was difficult.

Now, VMware is up against a highly disruptive competitor, and by its own admission, it's not winning. VMware President and COO Carl Eschenbach said as much as he tried to rally VMware's partner troops: "I look at this audience, and I look at VMware and the brand reputation we have in the enterprise, and I find it really hard to believe that we cannot collectively beat a company that sells books."

And yet, it hasn't been beating Amazon. Not in cloud workloads, anyway, given Amazon may record as much as $3.8 billion in AWS revenue this year, according to Macquarie Capital. Yes, much of Amazon's volume thus far has come from test/development workloads, but that is almost certainly just a starting point. Remember when Linux was only used for edge-of-the-network, non-critical workloads? That didn't last long...

With any technology disruption, there will be winners and losers, but VMware might want to take a page out of IBM's book, which has somehow managed to weather and even thrive despite serious threats to its legacy businesses. Ironically, even old-school SAP might be able to show VMware the way. SAP now lets customers rent its in-memory Hana database as a service on Amazon.

Perhaps Gelsinger could take a page from his own company's PaaS offering, Cloud Foundry. Cloud Foundry, now part of the Pivotal Initiative, is emphatically open source and explicitly eschews infrastructure moorings. Cloud Foundry, in other words, is the antithesis of the lock-in Gelsinger appears to be advocating. "Lock-in to Amazon is bad," goes the reasoning, "but lock in to VMware? More, please."

Not that VMware is the only conflicted company on earth. Nor is VMware doomed. Not by any stretch. The company continues to have a firm hold on the enterprise CIO. But to keep that hold, it might want to be a bit less blunt about wanting to turn that hold into a stranglehold. After all, one big reason for enterprise adoption of first open source, and now the cloud, is precisely the flexibility to get things done without being locked into any company whose guiding principle is to "own the corporate workload now and forever."

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