UPDATED 10:25 EDT / OCTOBER 27 2015

NEWS

VMware’s Patel: Virtustream will be a top-five cloud service provider

EMC and VMware Inc. last week joined forces to combine their respective cloud capabilities with those of Virtustream Inc., the cloud software and services provider that EMC acquired in a $1.2 billion deal earlier this year. The companies said the move is meant to enable customers to move all applications to hybrid cloud-based IT environments using the company’s technology portfolio.

VMware will also form a new VMware Cloud Provider Software business unit support the VMware vCloud Air network of partners. Ajay Patel (above) was appointed senior vice president of the unit. He answered a few questions from SiliconANGLE in this email interview.

Why was the decision made to split the software and services businesses out? Why not have a single cloud division with a single leader that can offer an integrated solution – and then within that division have a group that sells to cloud service providers?

Cloud is the next platform shift in IT and we are aligning our people, resources and technology accordingly. With Virtustream, EMC and VMware are planning to establish the industry’s most comprehensive enterprise hybrid cloud portfolio. This move is about enabling customers to move all applications to hybrid cloud-based IT environments. At the same time, VMware’s Cloud Provider Software business unit will deliver cloud-enabling software and solutions to VMware’s vCloud Air Network, including Virtustream, to help them rapidly innovate and deliver cloud-based services for enterprise customers.

In approaching solution providers, how will you differentiate your cloud solution from Amazon’s and Microsoft’s?

We enable enterprises to move workloads between on-premises and off-premises and to create hybrid applications spanning cloud and on-premises with a compatible platform, which sets us apart from the industry. With cloud services built on VMware, organizations can provision new or move existing workloads between onsite data centers or internal private clouds to the public cloud, and back again as needed.

VMware already has a vast network of service providers–the VMware vCloud Air Network, with more than 4,200 service providers in 105 countries. This large technology ecosystem offers choice and flexibility for end customers requiring cloud services globally.

Where does Pivotal Software, Inc. stand vis a vis this new company? What will the preferred PaaS platform be?

With Pivotal CF, Pivotal’s commercially supported platform-as-a-service built on Cloud Foundry, customers can run it on-premises on VMware vSphere, in the cloud on VMware vCloud Air or in any of our VMware vCloud Air Network partner data centers. That is not going to change. The Pivotal CF operational model provides a clean separation of developer and operator functions. Development teams can rapidly update and scale applications that can be instantly expanded and upgraded with no downtime. Going forward, there will be a lot of key integrations and capabilities, including with networking and integrated containers.

Virtustream has its own xStream cloud management platform, as does VMware with vCloud Director and vRealize Suite. How will you harmonize them?

Virtustream and VMware vCloud Air are both built on VMware’s technologies, as are our VMware vSphere and VMware vCenter service provider clouds. They are complementary. For example, VMware vCloud Air enables hybrid networking and enables customers to have elastic capabilities, while Virtustream xStream cloud management platform enables tier-one mission-critical workloads. Bringing them together, with VMware technology at their foundation, is about enabling a broad range of workloads.

For customers, it’s about reinventing themselves without reinventing the wheel. With both VMware and Virtustream xStream cloud management platforms, customer organizations can deploy new applications while maintaining the value of existing infrastructure.

What do you say to criticism that this new EMC-VMware-Virtustream company is acknowledgement that vCloud Air is a failure?

VMware’s public cloud has continued to experience strong customer adoption since being launched 24 months ago. This opportunity with Virtustream is about accelerating our customers’ journey to the cloud by broadening the portfolio of cloud services being offered.

Virtustream’s model has been a high-touch sales and consulting model to migrate SAP applications. How will that be made more scalable?

Virtustream will scale up a robust sales organization, complemented by sales people from VMware vCloud Air and EMC Information Infrastructure, who will be moving across to Virtustream. In addition, Virtustream will leverage the core EMC and VMware sales forces for broader reach.

What is the status of the Google partnership announced in January and how might that be affected?

Since the announcement of VMware and Google’s collaboration, we have announced the general availability (GA) of two key services. At VMworld 2015 US, VMware announced the GA of VMware vCloud Air Object Storage powered by Google Cloud Platform, and at VMworld 2015 Europe a month later, we announced Google Cloud DNS. VMware vCloud Air Object Storage powered by Google Cloud Platform is highly scalable, reliable and cost effective storage services for unstructured data. Google Cloud DNS offers organizations access to a globally distributed, low-latency DNS service with high availability and scalability as well as ease of manageability.

Through this agreement, customers gain the benefit of both VMware’s public cloud and Google Cloud Platform in a single hybrid cloud service, supported by VMware, and fully compatible with their existing vSphere-based data center infrastructure.

How much investment will Virtustream get from EMC and VMware to remain competitive with the estimated $1B Microsoft and Amazon are reportedly investing per quarter?

VMware and EMC are fully committed to Virtustream. We anticipate investing heavily in global operations over the next few years, in terms of operating and capital expenditures. These investments will allow Virtustream to uniquely address customer needs for cloud offerings across hybrid cloud, mission-critical workloads and managed cloud environments.

What benchmarks should we look for (revenue, profit, growth, etc.) to assess your success?

Beginning in Q1 2016, Virtustream’s financial results are expected to be consolidated into VMware’s financial statements. Virtustream is expected to generate multiple hundreds of millions of dollars in recurring revenue in 2016, with an outlook to grow to a multi-billion dollar business over the next several years. We also expect Virtustream to become one of the top five cloud service providers globally.

Patel stopped by theCUBE and chatted with Dave Vellante and Brian Gracely at VMWorld 2015 last month to talk about the services that VMware Cloud Services offers, some recent announcements and its growth over the past two years (18:46).


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