VMware, Inc. has said it wants to be a major provider of public cloud services, but its execution strategy around its vCloud Air offering has drawn a fair amount of criticism. Two years into deployment,  revenues from hybrid cloud and SaaS offerings (of which vCloud Air is a key component) were better than six percent of VMware’s second quarter non-GAAP total revenues, with a growth rate of over 80% year over year, according to the company. That makes it a $350-$400 million business. Wikibon analyst Stu Miniman recently said vCloud Air “isn’t considered a serious challenger” to the major public cloud platforms at this point.

With VMworld kicking off in San Francisco in less than two weeks, VMware offered us a chance to speak to Mathew Lodge (@mathewlodge, right), VMware’s vice president of cloud Services and the self-described “50 percent of the founding team for VCloud Air.”  Here’s what he said.

What should we expect around vCloud Air at VMworld? 

We’re doing a hackathon for the first time in the VMworld HangSpace. There’s a whole track associated with the hackathon around building apps around VCloud Air and using the Photon container runtime from VMware. We’ll demonstrate how they fit together.

We’ll also show Project Photon, which is a very small, lightweight Linux-based operating system for cloud-native applications. The project is optimized for VMware vSphere and VMware vCloud Air, providing an easy way for our customers to extend their current platform with VMware and run modern, distributed applications using containers.

A lot of people say vCloud Air is struggling to get traction. How do you respond to that? 

If you look at Gartner’s most recent Magic Quadrant, only three players made progress – Microsoft, Google and VMware. A lot of that had to do with sales and functionality. We typically win against Amazon Web Services (AWS) and Azure because of compatibility. We enable customers to get started more quickly and to modernize and evolve their apps.

VMware vCloud Air supports twice as many operating systems as Azure and AWS combined and VMware vCloud Air supports more versions of Windows than Azure and more versions of Linux than AWS.

Our challenge is building awareness around vCloud Air. There’s a lot of effort going into the marketing side right now. We’re seeing a lot of growth in people signing up for the service on our website. We’ve got VMware customers who want to use vCloud Air as a large test bed for software deployment. They can take software for internal deployment and run on vCloud Air. When they’re done they only pay for what they use.  We have about 500,000 VMware customers, including all of the Fortune 1000. That’s a good base to work with.

Are you winning much pure public cloud business? 

I would say the sweet spot is when you’ve got organizations with existing applications and you have to integrate with what they already have or evolve to the next level. With vCloud Air, those customers aren’t forced into re-platforming.

What are you doing to improve vCloud Air’s appeal to developers?

The upcoming hackathon is a good example of a shift VMware has made toward this audience. On vCloud Air side we’re spent a lot of time doing integration with Puppet, Chef, Ansible and everything else in the developer toolchain. We’re also working to make it very fast to run containers on vCloud Air.

Our new Project Bonneville initiative enables engineers to choose containers from the Docker Hub and run them inside virtual machines, thanks to a feature in vSphere called Instant Clone. The benefit is that containers retain the deployment speed of a container, but gain the full isolation and security, network and storage management that a VM offers. It’s the best of both worlds.

We also have an SQL database service that’s due out very shortly that can be deployed to developers. We’ll synchronize your database image and then use Puppet or Chef to deploy that software to vCloud Air. IT likes it  because they’re developing on the right image, and developers are happy because they can deploy quickly.  We’re initially supporting SQL Server with additional flavors to be added over time.

How do you want vCloud Air to be perceived in the market?

We usually compete against AWS and Azure, and we have a partnership with Google that lets you log in to vCloud Air and access your Google Services. The first application to come from that partnership was Google’s BigQuery high-performance query platform. You just pay for what you use. The second service is Google object storage, a very cost-competitive storage offering. So we’re going to have two object stores, one based on EMC VIPR technology and a Google offering at vast scale.

Does the coopetition arrangement with Google present any challenges?

The challenge for Google is they don’t have a hybrid play. We work with their sales teams so we can both be successful. The combination of vCloud Air and Google can be great for a lot of those hybrid opportunities. We don’t see a lot of price competition in the enterprise marketplace.

Is OpenStack a threat to vCloud Air?

We see most OpenStack deployments going into private cloud. There aren’t any really successful public OpenStack deployments – not to disparage Rackspace, whose main interest is in managed services. OpenStack has become private cloud technology for companies in which there are a lot of software developers.

How does the EMC Federation work to your advantage and also inhibit you?

We’ve done some very large deals where EMC was included. We couldn’t have done those without the rest of the Federation. In large accounts it’s very helpful to be part of the Federation. It doesn’t really inhibit us.

What’s are you doing to further enhance integration with vSphere?

One of the announcements we’ll make at VMworld is how to make it easier for customers to build hybrid clouds. More on that soon.

We’re also working with EVO:Rail [hyper-converged infrastructure] to make it easy to manage VMs on both sides from a single console. The other integration points are around vRealize automation so you can build out an IT service catalog and deploy that in vCloud Air, on premise or both on premise and in the cloud.

Anything new planned around container support?

We previewed Bonneville, which turns vSphere into a Docker host. When that’s ready to go, we’ll get that into vCloud Air, so you’ll get all the security and isolation of a VM while using the Docker API. You’ll also be able to deploy this new VM at the same speed as a container in a few seconds using Photon.

Are you planning anything innovative in pricing?

If you did a comparison today, you’d see that vCloud Air sits between AWS and Azure pricing, with Azure being more expensive. We’re moving prices down on efficiency in line with Moore’s law. I think pricing is less of an issue with customers. They expect we’ll move ahead with Moore’s law. Google is now the price leader. We’re happy about that, because you can buy Google services on the vCloud Air platform and pay the same as you’d pay on Google.

Wikibon Analyst Brian Gracely says “Many Questions Remain for VMware vCloud Air.” Read his analysis.

Watch the interview with Mathew Lodge on theCUBE from VMWorld 2014 (12:18)