VMware Looks to Increase its ‘Down-Market’ Appeal With New Offerings at VMWorld

It was a riveting Day 1 at VMWorld, with VMware CEO Pat Gelsinger and others making it clear that after years as the darling of large enterprises, it hopes its most recent product launches will position it for greater success among mid- and small-business players.

Not that large enterprises won’t find value in today’s launch of VMware Cloud for AWS (Amazon Web Services), but expectations are that providers of managed IT services will increasingly find opportunities to engage with VMware for customers who want access to the public cloud market leader.

Following a keynote during which “it’s all about the apps” was the overriding theme, Gelsinger, Dell founder Michael Dell, AWS chief Andy Jessy and VMware’s COO Sanjay Poonen talked extensively about how recent moves could help channel companies.

“I think customers are going to make very big decisions about this offering: ‘Do I renew the lease on that data center or do I move it to (VMware Cloud on AWS),’” Gelsinger said.

The main advantage of the new partnership – which currently only gives VMware customers access to AWS’s Oregon-based western U.S. region but is expected to spread worldwide by the end of 2018 – is the “consistent operations” concept.

VMware customers will be able to use their current toolsets and software interfaces to leverage AWS public cloud resources.

“Our view now is that amazon already has a piece, or a very large piece of our ecosystem,” Gelsinger said. “We are looking to opening up a resale program of our VMware Cloud on AWS.”

“Re-platforming applications and refactoring those, that’s not brining any value,” the VMware chief added. “We want to make it easy to run applications in a cloud-like way either on prem or in the cloud.”

Asked which company’s partner program would be the main beneficiary of the new relationship, Gelsinger said the offering would be a VMware service.

“It will be going through our partner program and our reseller programs,” he said. “We’re going to make this very visible on our site…That will become a critical aspect of our going down-market and broadening our global reach.”

“I think that customers are going start architecting their cloud plan in different ways. Now they don’t have build for peak capacity; they can build for average capacity.”

The head of VMware’s parent company, Dell, said he expects demand for the new VMware offering to trickle “all the way down to the smallest small business out there that needs that capability.”

“Companies are realizing that competitive advantage is really expressed through software,” Michael Dell said. “The fuel for that is the data. That’s a very interesting part of the infrastructure business.”

“There’s a requirement for a developer-friendly infrastructure,” he added. “We’ve been thinking very deeply about that.”

He advised that Day 2 of VMWorld would feature important announcements about initiatives related to containerization.

The larger the customer company, he said, the more likely it relies on hybrid and multi-cloud infrastructures.

“I think it is somewhat workload dependent and our job is to help the customers on their unique journey,” Dell said. “We think they are all (large and small firms) on that path to a hybrid, multi-cloud environment.”

VMware’s Poonen explained that his is a company with revenues of $7 billion-plus, with 500,000 customers, of which about a fifth are big businesses, while about 400,000 are SMBs.

“It’s always nicer in the early stages to get big brands,” Poonen said. “As we scale this, you can imagine it will be very similar to the split with VMware commercial partners.”

Jassy, the head of AWS, explained what his company expects to gain from the partnership.

“This decision was not come to lightly,” he said. “What carries the day and the way we decide what to resource is: What do we think customers want from us.”

“We kept talking to enterprises who are building their long-term cloud plans and they’re asking, ‘why aren’t you working with VMware,’” Jassy continued. “’We’re not able to work with AWS if we want to keep the same tools that we’re already using.’”

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