VMware: Enterprises Still Need Data Centers: Page 2 of 2

But what about price -- won't customers who opt for the VMware public cloud end up paying a stiff premium? Gelsinger himself contributed to such suspicions in an interview earlier this month when he said the VMware service will be priced at a premium over AWS. VMware will not join other public cloud service providers in a race to the bottom, he said.

When asked how VMware will price its hybrid service, Fathers was more circumspect. VMware is concentrating on the building the lowest-cost infrastructure possible in its four hybrid cloud locations. "If all I end up doing is selling infrastructure-as-a-service, I will probably get what I deserve," Fathers acknowledged. But the goal, of course, is to do more for the VMware customer than simply provision a virtual server. Additional services and workload management features will be offered on top of the infrastructure. Customers will be able to integrate their workloads with their on-premises operations in ways that other cloud providers will find hard to duplicate, he said.

One thing VMware can do easily with its like-to-like environments, Fathers pointed out, is "take the disaster out of recovery." It can handle the strain of supporting thousands of end users in virtual desktop -- especially BYOD -- environments.

The VMware cloud will be updated on a regular six-week basis, a pace that few enterprise shops can emulate. Virtualized networking, virtualized storage and advanced monitoring and management can be vetted by users in the VMware cloud before they implement them in their own environments.

And in Savvis, which has implemented the latest vCloud improvements in two of its own data centers, VMware has added a powerful ally. Savvis already offers its customers a vCloud-compatible environment, but in this latest agreement VMware will install, update and manage the service so that Savvis can provide its customers the latest version of the VMware cloud.

Other third parties that offer vCloud environments will manage these services on their own, although their ability to stay current will improve when VMware makes a service provider-oriented vCloud suite available in 2014. Third-party companies that install and manage the cloud services themselves will probably always be a few steps behind VMware and Savvis.

That could lead to changes if some of VMware's loyal service providers decide they would be better off casting their lot with OpenStack or another vendor's cloud. On the other hand, Fathers said, VMware is always striving to create new opportunities throughout the ecosystem via its innovations in virtualized networking and storage.

Other vendors will offer their own versions of virtualized networking and storage, but VMware has the advantage of adding features to the market-leading hypervisor that can recognize these attributes. Its vSphere 5.5 management system won't simply coordinate one aspect of the virtualized data center; it will expand over the next few years to coordinate all aspects of the software-defined data center.

At some point, some customers may say enough, if too much of their budget is going to the constantly expanding product line of their virtualization vendor. And some customers will evaluate the value brought to the data center by that product line and decide they can't live without it. Gelsinger, Eschenbach and Fathers are gambling that enough customers will decide the latter to keep VMware a continuing force in data center automation.