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VMware takes hybrid model to Europe with public cloud warning

Stuart Lauchlan Profile picture for user slauchlan February 25, 2014
Summary:
VMware's vCloud Hybrid Service sets up shop in the UK with plans for expansion onto the continent. But the switch-on comes with warnings about public cloud that might border on the FUD front.

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Pat Gelsinger

Thirty one floors above a rainy London is no place for any sensible soul to be at 8.30 on a Tuesday morning, but that was the chosen location and time for VMware to throw the switch on the expansion of its  vCloud Hybrid Service offering into Europe.

Or at least into Slough, just outside of London, for the time being.

The Slough operation will complement VMware's existing US data centers, and, says VMware, will:

“provide customers with a European location that addresses UK and EU compliance and data sovereignty demands.”

Bill Fathers, vice president of VMware's recenty formed Hybrid Cloud Services Business Unit, explained the pitch to European customers in a post PRISM scandal world:

"Customers need to control if data is held on premise or not, and if they go to public cloud, they need to know where that data is. We let them control which data center it is stored in.

“In terms of underlying needs of clients being able to control which data remains in their own data center, or if it does go into the public cloud, they need to be able to explicitly control whether that cloud will be in France, Germany or the UK.

“That is hardwired into the vCHS service: as we roll out into other jurisdictions in Europe, we need to be able to give the clients an absolute guarantee that the data will only reside in the data center they specify. We think that is very unique.”

Two speed Europe?

So far, so eminently sensible. But if I'm honest, I wasn’t entirely sold on some of the messaging following on from this premise, which seemed to me to leave a suggestion of a two-speed (at least) approach to European cloud adoption.

Gavin Jackson, VP cloud services EMEA, made the case that concern about public cloud - and I think might safely read Amazon Web Services into this - is holding back European cloud adoption, citing what he called the “adolescence” of the public cloud model:

“The public cloud as a business case is compelling to everybody. Of course businesses in Europe want to benefit from speed, and agility and...bring products and services to market faster than their peers.

“Of course they want to eliminate all the wasteful expenditure, like IT, where typically they might provision for peak times and this leads to a massive overhanging waste burden.

“Why then are European companies lagging behind their American counterparts? For conservative customer buyers, a leap into a black art is a step too far.

“Customers believe that data location is really important. There are over 100 borders in EMEA. That’s before you get into the conversation about compliance - where is your data at any given time.

“European customers can be forgiven for thinking nothing is set in stone, where you can’t point to where your data is and can’t guarantee whether you’re compliant or not.

“It is important for us to be a global company and to have consistency of user experience everywhere you go. That starts with the UK. We knowingly know where our data is. We know we have sovereignty. Customers can point to where their data is.”

That’s true - up to a point.

Bill Fathers
Bill Fathers

If you’re in the UK, you now have an in-country offering that allows you to know where your data resides.

If you’re in France or Germany or any other EU country, well, not so much - yet.

The yet is important. This is just the start. The plan is to roll out similar data center operations in France and Germany in short order, certainly within 2014, as well as second UK data center south of London for disaster recovery purposes.

The ghost of DEC

Such is the importance attached to the international expansion and the UK switch on that VMware CEO Pat Gelsinger flew in to open the proceedings. He argued that this is

“the most disruptive time in the history of IT - period!”

To make us all feel a bit older than we might comfortably acknowledge, Gelsinger resurrected the ghost of Digital Equipment Corporation - DEC to those who there - which 25 years ago was the number two IT company in the world behind IBM. He reminded us:

“DEC’s CEO Ken Olsen made the statement that the PC was a toy and would have no relevance to business ever. Nine years later, DEC was bought by one of those ‘toy companies’.”

We live in the interesting times of the Chinese curse, was the basic thrust of his message, followed by some evangelising of the VMware hybrid approach:

“We are seeing a shift from the client server era to the mobile cloud era and right now we are starting to see minor tremors in the market before we get a dramatic shift.

“Companies like Nokia, Blackberry, IBM selling its x86 unit - there will be winners and losers as part of this shift and VMware wants to position itself against these changes.”

Cloud spend is where it’s at as far as growth in the IT sector is concerned, he added:

“Overall, if you look at IT growth (market growth for vendors), that whole IT stack was somewhere between 0 to 5% and some analysts would say it is between 1 to 2% for the total industry last year.

“But off premise business IT [spend] is growing 30 to 35%. This means if you [as a vendor] are not where the market’s going your business will not grow and your only opportunity to grow is to take market share from others.

“Customers have made substantial on-premise investments. How can we enhance those values with an off-premise service.

“How can we deliver more value from what they’re doing? That's a unique position we see ourselves [delivering] in the marketplace.”

Fifteen minutes with Pat Gelsinger

After the formal pitch, diginomica had the chance to sit down with Gelsinger for 15 minutes to go over a few outstanding issues that arose during the launch. The highlights below:

On the response to the beta program for vCloud Hybrid Service in the UK:

"We were pleasantly surprised by the more aggressive response. We went out to ask for beta customers. We wanted to get 20, but we had 200 register interest. That was more then we expected.

"The market was probably more mature than we expected and customers were more sophisticated in their inquiries - sophisticated in terms of their knowledge and asking much more detailed consumption questions.

"Just more sophisticated and detailed than we’d expected."

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On the impact of the NSA spying scandal and the questions being asked by customers:

“Every customer is more sensitive post-Snowden, but our answers are very good. We are running in the data center. You’re already running VMware in the data center. We have a UK data center in the UK. Our software is already certified.

“It’s not that people aren’t asking questions - they’re asking questions of every US technology provider. But our answers and our positions in the marketplace are better than Microsoft’s, better than Google’s, better than Amazon’s."

On the European Commission’s plans for a pan-Europe cloud computing strategy and the need for in-country data centers.

“Europeans should decide what Europeans need. It’s not my job to say what European policy should be.

“Our job is to meet the needs of our customers. We’re in a million data centers today. The idea of having a German data center or a French data center or an Italian data center is no big deal.

“Our strategy is to have a sovereign database in France and Germany this year. Do we need to be in every country? I hope not.”

On who the ‘Big Bad’ is for VMware:

“The companies who are competing in the hybrid cloud space are numerous. You have Amazon and Google and Microsoft and IBM and then you have some European players.

“Amazon is the leader and the biggest competitor, but we think of them as being over there and we’re over here. They are trying to serve customers born in the cloud which need to be scalable, like Netflix. The only thing [Netflix] cares about is scale and cost.

“I’m interested in the enterprise needs - sovereignty, security, service level agreements, compatibility with today’s applications and tomorrow’s, the things that enterprise customers care about. Amazon believes that the enterprise should rewrite their applications and host them on their proprietary cloud. We want to build a bridge. I’m aiming for differentiated.”

On whether the ‘public cloud not so good’ messaging might inhibit wider cloud adoption if not handled with care:

“Businesses have very different requirements and are at different points of maturity with respect to cloud. If you’re the Bank of England you have a very different perspective to [online gaming site and UK beta customer] BetFair.

“Each has its own set of needs. BetFair is all in to the cloud and ‘Let’s move 100% of our workload onto the cloud’. The Bank of England is more ‘What am I going to do? The regulators are going to be here next week’. It’s a dramatically different set of needs and demands. The Bank says ‘let’s do some test and dev on the cloud to start our journey without sending the regulator through the roof’.

“It’s our job to guide the enterprise user through the journey to the cloud. Some will go very fast; some will go very slow. But we go to the CIO and say ‘We’re not asking to move anything or rip anything out - we’re helping you to enhance what you have’.

Verdict

The next step taken on the journey to evangelise VMware’s hybrid philosophy on a global scale.

The essential pitch to the CIO is sound and thought-through and, from the feedback from early beta program participants, compelling.

I have a few wobbles still about the ‘public cloud bad’ messaging - that could do with perhaps one more iteration to road test it and a 'handle with care' assumption on delivery to avoid accusations of FUD spreading.

But once France and Germany follow in the UK’s footsteps with their own in-country data center operations, the international story from VMware is going to look increasingly strong.

As Gelsinger himself put it, there’s a three year journey between creating a new idea, explaining it to customers and channel partners, and seeing it delivered. The UK just joined year three.

 

 

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