VMware: Monetizing the Hybrid Cloud

Watching the strategic and near perfect strategic pivot VMware has made since its failed IaaS venture has been nothing short of awe-inspiring.  Very few companies can make such a shift hence the graveyard of once high growth (and now walking dead) tech companies busy managing layoffs and pension expenses to extend their runways.

You’ve probably forgotten my take on the hybrid cloud meme and the entrance of Azure in Microsoft, Azure and the Hybrid Cloud Race from way back in June 2013.  Here is a highlight:

If VMware could get $2k/year for each server (traditional and x86), that would amount to an additional TAM of $60B based on a three year refresh rate. Yet that would represent a major business model shift and limit the amount of lock-in that VMware would have over its customers operating on its private cloud platform. It could face margin erosion for its core lines.

Who knows if those economic projections from the days of AWS hybrid cloud denial will come to fruition. I think thanks to VMware’s “immaculate hybrid cloud execution” we may find out that  hybrid cloud agility is the game changer of game changers.

That’s why today’s news announcing even cozier relationships between AWS and VMware (Amazon deepens its partnership with VMware to go after companies that don’t use the cloud) doesn’t come off as an anomaly or shallow PR proclamation but rather a careful, long game strategy grounded in execution. It is setting a bigger stage for the cloud, beyond, even, the incredible vision of Amazon. Time will tell, but so far VMware is vying for tech leadership on a new scale. Bravo!

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Indeed, while its competitors languish in swirling proclamations obfuscating business as usual and various flavors of entrapment, VMware shifts into higher gears and sets in motion the change it first promised with the lofty acquisition of Nicira and the declaration of the hybrid cloud promise.

Bravo VMware!