IBM Just Threw What Could Be A Knockout Punch At VMware

IBM Ginny Rometty punchIBM CEO Virginia Rometty

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IBM last week said that it was going to use a cloud technology called OpenStack in a big, big way.This has major implications for the cloud industry and could really hurt one player in particularly—VMware.

All of the cloud infrastructure IBM builds for itself and for customers will now run on OpenStack. This includes its own public “smart clouds” and every “private cloud” it installs for its enormous base of enterprise customers.

Cloud computing involves delivering computing power, storage, and other resources over the Internet, so developers don’t have to worry about maintaining their own hardware. Private clouds use similar technology, but run inside a company’s own data centres and hence aren’t shared by multiple customers.

IBM’s influence could turn OpenStack into the immediate frontrunner for cloud technologies, both public and private.

OpenStack isn’t owned by anyone. It’s an open-source project with contributions from more than 8,000 people at 1,000 companies, led by Rackspace. It was based on a project that originated at NASA.

Anyone can use it for free, though they usually pay some vendor for consulting services and maintenance.

With IBM pushing OpenStack, this encourages more enterprises and service providers to use OpenStack, too, instead of VMware’s vCloud or Citrix’s CloudStack.

“We dreamed that one day IBM might get involved and do for OpenStack what they’ve done for Linux and other open-source communities in the past,” Mark Collier, COO of the OpenStack Foundation, told Infoworld editor Eric Knorr.

Now IBM is doing just that.

Until IBM threw its weight behind OpenStack, VMware’s vCloud had a big advantage. Most big companies are already using VMware’s flagship “server virtualization” technology which lets multiple operating systems and applications share the same physical server.

It’s a smooth leap to a VMware vCloud private cloud from there.

But now, enterprises might think twice about vCloud. And once they bring OpenStack in the door, they may not stick with VMware’s flagship server technology either.

VMware is fighting back. It is rumoured to be working on its own public cloud service, which would compete with IBM, Rackspace, and, of course Amazon, reports CRN’s Kevin McLaughlin.

That’s a risky move for VMware. It has built vCloud into a success by selling it just to enterprises and service providers. More than 200 service providers offer vCloud. Now VMware will be competing with them, which could drive them into the arms of rivals running OpenStack or CloudStack.

At stake is every vendor’s piece in a market some are calling “the next Internet.” The public cloud market will hit $206.6 billion in 2016, Gartner predicts. And that doesn’t even include the billions that will be made from applications that run on those clouds.

We reached out to VMware for comment on IBM’s move but haven’t heard back.

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