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Puzzle Solving for Hybrid-Cloud, Multi-Cloud, and Containers in a Virtual World
The IT news headlines are as buzzword heavy today as they ever have been. In reading dozens of email headers with the terms “private cloud,” “public cloud,” “hybrid cloud,” and every combinatorial variant one can think of, how should IT leaders consider the “cloud” space? There has been plenty of research published around how to develop a “cloud strategy,” but the challenge has grown into a larger headwind where cloud-based services can no longer be evaluated in isolation.
There is no denying the trend towards the adoption and use of cloud-based services within organizations across all industries and size. IDC’s 2016 CloudView Survey estimates that IT budgets are currently allocating 53% of total IT spend to traditional datacenter and outsourcing services. By 2020, a dramatic shift in IT spending forecasts that 54% of the IT budget will be spent on hardware and software in support of cloud services to the tune of $500 billion. Cloud is clearly here to stay.
The question then shifts from “What is my cloud strategy?” to “How do I integrate the cloud into my IT strategy?” Let’s start with the assumption that the overall objective of IT is to enable business growth and transformation. The first step to creating that strategy will be to identify the business problems and opportunities that IT can impact to help the organization achieve its goals.
Without a doubt, most organizations are going to see the economic, scale, efficiency, and functional advantages of many cloud-based services as an integral part of the IT strategy. However, IT leaders must be cautious and methodical in the selection of cloud services and vendors. Vendors offering cloud technology have ramped up their marketing and sales machines and bring an entourage of sales and product specialists. They will demonstrate the ROI through “value engineering,” providing use cases to “transform the enterprise” along with very compelling arguments about how their solutions will own the marketplace and sustain your needs for years to come. I love clichés, because more often than not they are true. Remember the saying, “If something is too good to be true, it usually is”?
In reality there are a few enterprise IT vendors that are seeking to build out true platforms to meet the majority (and eventually all) of your IT infrastructure requirements. The pitfalls are significant, and IT leaders need to take an “eyes wide open” approach to the evaluation of any “platform” solution. The financial and skills impact to IT is significant and requires equally significant investment to be successful. This research note will provide a brief overview of how two of these platform vendors, Nutanix and VMware, are each approaching IT infrastructure management that enables both on-premises datacenter operations and workloads operating in a cloud environment.
The industry has already seen VMware fail in the public cloud space via its vCloud initiative launched in 2008, and then later re-branded vCloud Air product, sold as a hybrid IaaS. This is not a knock on VMware, as Verizon, HPE, and Cisco have all tried and failed at this as well. The decision to abandon the full-scale cloud provider aspirations was likely a prudent one made by CEO Pat Gelsinger. The long-term investment required to scale, coupled with the juggernauts of AWS, Microsoft, and eventually Google, would have resulted in lower profits and a distracted R&D team (at a minimum).
The “cloud” remains an issue for VMware, as IT departments want the ability to run their vSphere workloads both on premises and in a private or public cloud. How does VMware prevent a catastrophic scenario where the virtualization business, for which it holds ~71% market share, starts to evaporate as more and more workloads are born or brought to the cloud? It just wouldn’t do to have $7B in annual revenue start to slowly fade away!
VMware has not been resting on its laurels. In fact, it is taking an approach of coopetition, primarily with AWS, as a means of building out a cloud management platform functionality. Most IT professionals may not think of AWS as a direct competitor to VMware, viewing it as distinct from others like Microsoft’s Hyper-V, Citrix’s XenServer, KVM, or Red Hat Virtualization. As this article from The Register aptly puts it, “The technology world of 2017 is broken into Amazon and Not Amazon.” Dig a little deeper and it quickly becomes apparent that every AWS instance raised is actually just a virtual machine initiated atop AWS’s massive physical infrastructure. While data on the total number of active AWS instances is not readily available, the AWS services are generating $13B in annual revenues…and growing! What to do?
Coop-itate! The anxiously awaited general availability release of VMware Cloud on AWS was announced in August 2017, after being pre-announced in October 2016. Customers can now purchase VMware on Cloud directly from VMware and start to build in hybrid cloud scalability and flexibility, launch new cloud environments, or migrate application workloads bi-directionally. A major benefit to IT shops is that the VMware Cloud on AWS utilizes the already existing technical skill sets that have seen heavy training investment over the past decade plus. The success of this partnership remains to be seen, but it will likely bear fruit for both Amazon and VMware. It is almost too easy for organizations with an already heavy investment in VMware to look the other way; and that is the problem. There are many questions to be answered at this stage to understand if this option will provide promised benefits and cost efficiencies. Interested companies should have a well-established strategic partnership with VMware that can help overcome inevitable bumps in the road.
While the AWS-VMware partnership should be a win-win for both companies, VMware appears to have even broader cloud broker ambitions. The technology underpinning the VMware Cloud on AWS product is the VMware Cloud Foundation, which is the software-defined datacenter (SDDC) solution, which currently integrates VMware SAN, vSphere, VMware NSX, and vCenter management. VMware Cloud Foundation is set to be the central component in VMware’s cloud strategy, which is not limited to running vSphere workloads on AWS. VMware is partnering across the cloud landscape with the apparent aim of enabling vSphere workloads to run anywhere, any time. An example of this is the HPE-VMware partnership to deliver “composable infrastructure” for clouds by running VMware Cloud Foundation integrated with HPE’s Synergy converged infrastructure offering. This addresses one on-premises datacenter/hybrid cloud scenario.
At the other end of the spectrum, VMware is partnering with Google and Pivotal to bring the Pivotal Container Service (PKS) and Kubernetes to existing VMware workloads running on premises or in the Google cloud. While virtual machines encompass the full OS-application stack, containers are application specific and offer increased flexibility and scalability higher up the stack. An easy way to leverage containers would be to run containers within virtual machines instead of investing in a container-specific PaaS platform. VMware is providing a means to continue using and expanding the vSphere functionality at the top and bottom of the cloud-datacenter spectrum and everything in between. It is conceivable, but not certain, that the pure-play VMware Cloud on AWS will be the only IaaS direct to consumer (DTC) product for now, as there may be some exclusivity tied to the AWS deal that has not been disclosed. At a future point in time, we can expect to see this offering duplicated across Azure, GCP, IBM, and AWS.
As a matter of fact, at VMWorld 2017, Nick King, VMware’s VP of cloud product marketing stated, “We can act as cloud Switzerland.” This underscores the overarching goal to support VMware’s customers in their choice of any cloud platform, while maintaining the familiar and embedded VMware toolsets as an anchor point to facilitate ongoing workload migrations and integrations between cloud and on-premises applications. To that end, VMware is unveiling a suite of tools that manage cloud monitoring and resource consumption, performance monitoring and health, compliance, cost optimization, network management, security and analytics, and multi-platform application management. All were free until November 30, 2017 (check with your account rep. on current status). These will be on-demand services or term commitments with discounting. A key takeaway here is the ability for VMware to drive “down market” and really start to absorb SMB market share. Where these companies are looking to cloud solutions or for the flexibility to leverage a hybrid solution, the VMware Cloud on AWS option is a lynchpin to enable organizations to plan for average capacity instead of peak capacity. Andy Jassy, head of AWS states that, “We kept talking to enterprises who are building their long-term cloud plans and they’re asking, ‘why aren’t you working with VMware,’” and then concluded, “We’re not able to work with AWS if we want to keep the same tools that we’re already using.” Powerful customer feedback indeed.
The bottom line for VMware is that enterprise clients are comfortable with the VMware virtualization functionality, so the prospect of extending that into the cloud is inherently appealing. Coupled with VMware’s forays into networking, container and VDI solutions integrated into its SDDC platform, and VMware is offering the “holy grail” to IT leaders: an end-to-end virtual infrastructure managed from a centralized and unified management console.
The hyperconverged infrastructure (HCI) space is comprised of numerous vendors providing solutions that are software driven and tightly integrate the compute, storage, virtualization, and networking resources in a compressed footprint running atop commodity hardware. Nutanix is a leader in the HCI market, which includes competitor offerings such as HPE’s acquisition of Simplivity, NetApp’s pending launch of SolidFire HCI, Cisco’s HyperFlex, and VMware’s Hyper Converge products. Credit Suisse estimates the Total Addressable Market (TAM) for HCI at ~$32B and recent channel surveys conducted by KeyBanc Capital Markets estimate that Nutanix will capture 5% market share this year while growing to 11% market share by 2021.
While VMware attempts to bridge the gap between the on-premises and cloud worlds via the use of tried and true tools of the IT trade (vCenter, vSphere, vSan, etc.), Nutanix is a disrupter and innovator that provides new options for the inevitable rise of the hybrid cloud enterprise.
Nutanix has developed a completely organic Enterprise Cloud OS that is the backbone of its hyperconverged solutions offering. The Enterprise Cloud is comprised of three components called Prism, Acropolis, and Calm. Prism can be viewed as the control panel, or management plane, that aggregates data and generates insights on the overall system operation via a unified console. Acropolis is the hypervisor, similar to vSphere for VMware, that builds atop the core HCI by adding native virtualization, virtual networking, storage services, and cross-hypervisor application mobility. Calm provides application orchestration and lifecycle management for the control of applications migrating between on-premises and cloud platforms.
Note that a native component within the Nutanix HCI system is the AHV or Acropolis Hypervisor. It is a direct threat to VMware’s virtualization product. Nutanix contends that VM sprawl has led to unsustainable loads, adds stress to storage resources, and ultimately cannot meet demands in a “Web-Scale world.” With a software-defined HCI platform that is now offered through its own branded hardware and through most commodity hardware via channel partnerships with Dell, Lenovo, Cisco, IBM, and HPE (even though it competes directly with these vendors’ products), Nutanix offers a compelling alternative and opportunity for enterprise IT shops to start the process of migrating off VMware altogether. This is big news for IT leaders as they have been beholden to the ever-increasing price of VMware support subscriptions.
As innovative a solution as Nutanix has brought to market, it would not be enough to attract significant market share as an on-premises solution alone. Nutanix revealed more of the plan to become an enterprise cloud platform at its recent .NEXT 2017 conference, where it announced a new partnership with Google Cloud that will allow customers to migrate application workloads between on-premises datacenters and Google’s public IaaS cloud.
This partnership, along with Nutanix’s intention to support the hybrid structure in AWS and Azure clouds, serves as notice that Nutanix will become a leading choice for hybrid cloud applications. To this end, Nutanix also unveiled Xi Cloud Services and Calm cloud orchestration software at its recent event. Xi Cloud Services will be managed by Nutanix on its public cloud with the first service being a disaster recovery (DR) service that integrates with the Prism management plane, allowing customers to protect their applications and data wherever the application resides. The Xi Cloud Services can be viewed as the counter to VMware’s Cloud on AWS, whereby each offering seeks to provide its own private cloud that can integrate with the customer’s on-premises environments to create a hybrid cloud environment that is directly controlled by the customer.
In ironic fashion, Nutanix is demonstrating the “value engineering” model to its customer base, just as VMware originally sold the ROI of virtualization. The ability to reduce the clutter of virtualized clusters and thousands of VMs to manage, while increasing throughput and lowering overhead costs is guaranteed to get the attention of most CIOs.
The extent to which Nutanix will be a VMware disrupter remains to be seen. The vendor segment comprised of virtualization and HCI offerings may even be disrupted by their newest commercial partners, the public cloud titans themselves. There is undoubtedly enough business to go around for now. The real question I urge you to ask is, “What is my application workload strategy?” The answer to this question will dictate IT budgets, resource allocations, and most important, the ability for the enterprise to meet the needs of a web-scale world.
- Research your options. There are new and innovative alternatives to legacy virtualization and hybrid cloud management solutions.
- Build a long-term hybrid cloud strategy. While the technologies discussed in this paper are compelling in many ways, they all still come with a version of vendor lock-in. The decisions made today will impact your IT budget for years to come.
- Test the waters. IT leaders should lean in or “ooch” into testing the various technology solutions now available on the market. A small investment in the solution shortlist will provide an unparalleled first-hand opportunity to test the performance aspects and installation process, and assess the amount of required training to successfully deploy and manage a new technology solution.
Most enterprises are seeking a cost-effective and efficient means to move to a hybrid cloud operating environment. It is critical to take a long-term strategic outlook that considers the many new alternatives to the status quo.
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