A couple of years ago I remember first hearing about Project Zepher which was rumored to be VMware’s first attempt at a public cloud offering…though it wasn’t officially announced at VMworld 2012 it was the basis for what would later become vCloud Hybrid Services. Just after VMworld I wrote this post where I stated:

…VMware always being about the partner cloud ecosystem it felt like a shift in direction overnight one which is obviously driven by the fact the big boys of Amazon, Azure, Google and to a lesser extend RackSpace have all taken significant chunks of the market space.

With that I do understand VMware’s nervousness in the fact the vCloud ecosystem hasn’t grown as quickly as they would like, but I would argue that the pure public cloud space where vCloud offerings sit are completely different market verticals and. Extend that to my local market of Australia, we are only now just seeing RackSpace and Amazon show interest in availability zones locally to counter the huge data sovereignty issue that exists in Australia the big boys aren’t really here yet and hopefully won’t get established for a long time I also believe that Australian companies…be it a large corporate or an SMB trust and like to do business with local providers of whom there is an existing strong relationship.

Fast forward two years AWS (and to a lesser extent, Rackspace) are well established and growing strongly and Azure is about to drop in Australia officially in the next couple of months. My worry remains that the focus can’t help but shift from partner based Cloud offerings to vCHS for local VMware staff to push and there has certainly been a shift in company mentality where it’s very much ok to look at Public Cloud offerings now at the expense of traditional MSP and/or IaaS providers.

vCloud Powered Providers generally fall in a category that’s not Public Cloud, but not Managed Service Provider Cloud…most vCloud Providers “should” have a level of automation and self service and should be nimble enough to offer competitive pricing and reliable service. Certainly the best vCloud Powered partners have product offerings that complement basic IaaS services such as DR/RaaS and VPS products and in general most should have a locality advantage over the likes of AWS, Azure and now vCHS who can not put an availability zone in every state and city…there should be plenty of the Virtual Pie left.

One of the biggest questions that remains unanswered for me is how local VMware sales and support practices will react to vCHS arriving in their region. We recently had the first APJ (hosted out of Japan) vCHS datacenter open and by the end of the year it will arrive in Australia…my guess is that VMware will/have Partnered with Telstra (who have, rather surprisingly won Cloud Service Provider of the year two years running at PEXANZ) and be offered out of at least Sydney…if not Melbourne at launch. It’s not a surprise anymore and it’s something I understand VMware must do to complete with AWS and Azure here in Australia.

Working for the current largest vCloud Power Provider in Australia it does worry me that VMware will shift focus of sales towards vCHS and the backing and support that has been up to this date, tremendous…will start to decline. However I must counter this by saying that I don’t believe VMware will pull a Microsoft and look to screw partners by way of going out of their way to lure clients away.

So the elephant in the cloud remains…what impact will vCHS have on VSPP and vCloud Powered Providers?

I’m interested to hear of vCloud SPs in the US and Europe who have already had vCHS drop in their regions…Has it had an impact? Are you still getting the same amount of love from VMware? What have you done to counter added competition?

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