Cisco and VMware Eat Their Anticloud Words

Compete with Amazon Web Services is difficult. Just ask Cisco and VMware, both of which have been made to eat humble pie rain in recent days.

The two companies AWS derided for being a weak or no product margin player a few years ago, one that would never touch their "most valuable" products. Now? We will talk with them themselves.

 Cisco sells millions of networked computers and has been the dominant network provider it seems centuries. It is a great company with a glorious past. It also runs the serious risk through AWS, Microsoft Azure, and other public cloud providers to encourage businesses to hire critical infrastructure.

There are two years, Cisco has hired Nick Earle as senior vice president of sales and cloud-to-market. At that time, Earle was not worried about the AWS. "Goods rabble!" It seemed to be the thought that entered a statement he made to CRN:

"If you look at what [AWS is] doing is clearly a perforation line and are price and will lose money strategically cutting. Cisco does not believe in wasting money strategically."

 Instead, Earle asked, "ACI programmability and dynamic network allows us to provide differentiated services and value-added." Apparently providers like AWS low margin are "shaking because this is a very expensive game. To continue building and data between continue lowering the prices are not the strategy we believe."

Unfortunately, it is a strategy that AWS customers, Microsoft Azure and Google Cloud believe. Oh, and it is difficult enough profitable, with AWS notched healthy margins are large enough to carry all Amazon operations and in the dark.

 Cisco, to his credit, he realized.

The last week of European Cisco, Middle East, Africa, and Russian President Edwin Paalvast took the stage at Canalys Forum canal and told them to dig for niche markets because "undoubtedly [AWS] is won the mass start [] markets as very large data applications. They are standard and can not be beaten more. "Hmm," can not be better "? This does not look good.

However, Cisco remains convinced that the model of AWS is likely unsustainable. Paalvast says: "AWS is a bet If you really look at their financial statements, was hired for all, if they continue to grow as they are today, will win.". However, he continues, "If they have a hiccup, they will be bankrupt."

With all due respect, Cisco, I would not bet on a strategy based on prayer for hiccups. VMware did not work for, after all.

Beat the bookseller

 First, he was president and chief operating officer of Carl Eschenbach VMware, which in 2013 took stock of the brand and the ecosystem of the strength of VMware and said. "I find it very hard to believe that we can not overcome collectively a company that sells books "not to be outdone, CEO of VMware Gelsinger went further and insists that the victory of AWS was to defeat all if the" burden of Amazon work is lost, and lost forever. "

The "we" Gelsinger was called VMware and its partners. It sounds an alarm about the threat to public cloud domination of VMware data centers:

"We want to own the workload of the company. We all lose if they are in these fine public clouds. We want to extend our franchise in the private cloud and public cloud only allow our customers the benefits of both. Owning corporate load work now and forever. "

 Gelsinger finally decidedly changed his mind last week when he came on stage with AWS chief Andy Jassy announce a partnership in which VMware software is offered as a service on AWS. The Register snarkily titled as follows: "Amazon AWS". Hi VMware. 'We submit Please save us! "

Gelsinger, a little more humble now, and said: "This is the result of our customers tell us what they need," You're right, it would have been just as well admit that three years ago ..

The reason VMware actually fought for so long it is self-preservation. As suggested InfoWorld Eric Knorr, "This is ultimately a ramp [AWS public cloud] without a detour." It's a great way to extend the private cloud, VMware that control public cloud, which is the strength of AWS. Do not expect AWS to pave the way back to the private cloud.

A cloudy Hotel California

 This is the problem of all these old trucks, these wired-called "dead works". They can not explain the gravitational attraction of public clouds like AWS or Microsoft Azure, but they have no way to stop them, either.

Chowdhry chip analyst, speaking of the holders of materials, it is clear that something profound is happening throughout the IT environment of the company, a trend that is not only key equipment providers:

"We are seeing 8-11 technology conferences every month. We have not come in a single customer increasing their spending on hardware company. In fact, all customers are talking about is the decline of its equipment business spending. All guests talk continues to increase their workloads on AWS and Microsoft Azure more than 100 percent. "

That will accelerate. At least now Cisco and VMware support, however, can be painful.