Andy Jassy and Pat Gelsinger say their customers win, but here's who's taking it on the chin.
When Amazon Web Services and VMware executives officially unveiled their cloud collaboration on Thursday, they said that the beneficiaries will be businesses that want to run some computing jobs in their own data centers and others on Amazon’s shared public cloud infrastructure.
The pitch is that the promised VMware Cloud on AWS, to be available in mid 2017, will let companies easily provision VMware vmw software to run on Amazon’s worldwide network of data centers and buy it using their existing corporate VMware accounts.
Both of the major parties, represented at a San Francisco event by AWS chief executive Andy Jassy and VMware chief executive Pat Gelsinger, could claim a win.
The pact, previously reported in Fortune, gives Amazon amzn a better hybrid cloud story, which means companies can run some workloads in their own privately-controlled data centers, and put other components in a shared public cloud (AWS). For all Amazon’s talk about fielding tools like a storage gateway that facilitate hybrid use, its business plan has been to get as much corporate data and applications into its data centers as possible. Almost anyone not on the cloud giant’s payroll sees these tools more like one-way on-ramps to AWS.
But this deal, in theory, makes it easier to keep some workloads running in-house, with AWS acting as a big backstop. So if a company has a sudden need to run a big computing job that might outstrip its own data center capabilities, it can easily run it on Amazon instead.
And VMware, which tried and failed to build an AWS-like cloud on its own, sometimes demonizing Amazon in the process, gets “a strategic and long-term partnership” with the world’s largest public cloud. It was portrayed as a win-win scenario.
So who loses? Here are some guesses:
1: Microsoft. The software giant has long held that businesses running Microsoft msft software internally can more easily share workloads with the company’s Azure public cloud. This new AWS-VMware pact promises that the many, many customer data centers that already run VMware software have an easy way to split some of those workloads with AWS, rather than Azure.
As IDC analyst Al Gillen put it: “AWS gets access to customers that Microsoft would really like to retain.”
2: IBM. Up till this week, IBM ibm was VMware’s bestie in public cloud. In February, the two companies said that IBM would run VMware software on the IBM public cloud and in the intervening months, IBM says some 1,000 shared IBM-VMware customers have gone that route.
There are some differences in the two VMware partnership deals, however. For one thing, IBM is selling VMware running on its infrastructure, whereas VMware will sell VMware Cloud on AWS itself. That basically gives Amazon more feet on the street, provided VMware’s sales team and partners are given the right incentives to offer the AWS option.
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3: Google. Poor Google goog which lost its bid to partner with VMware to IBM last year is now the odd man out again. Google fields its own public cloud and, like AWS, needs to convince companies it has a hybrid cloud strategy. A VMware hook-up could have come in very handy there.
This must be particularly galling, since Google senior vice president, Diane Greene, who leads the Google cloud push and was tasked to win more big business customers, was formerly VMware’s chief executive.
“Greene is supposed to be the most enterprise-y person alive and she founded VMware. Why couldn’t she do this deal?” said a former VMware exec who requested anonymity.
He also said to expect Google to come back with news of a deeper partnership with Red Hat rht , another enterprise software player, to show it’s in this game. Red Hat had no comment on that notion and Google could not be reached for comment.
For more on Amazon and VMware, watch Fortune’s video:
4: Other VMware cloud partners. VMware has long pushed and prodded third-party telcos and other big service providers to run vCloud Air, a set of its own software. By spreading vCloud Air around to third-party data centers, VMware hoped to build a federation of partners that would, in aggregate, compete with Amazon. But now, guess what? These partners must contend with the biggest cloud player on the planet, which now also runs VMware software. It doesn’t take a genius to see they won’t be pleased about this.
As Forrester Research analyst Dave Bartoletti summarized Thursday’s news in an emailed statement: “AWS gets to scoop up more VMware-based workloads from corporate data centers and VMware offers a path for their core customers to more easily take advantage of AWS, the most popular global public cloud platform. VMware’s existing vCloud Air Network Partners just got a very big new competitor.”
And for all the talk about VMware and AWS both coming out ahead, just remember that under this deal, Amazon will now have VMware salespeople, once sworn enemies, peddling its services. That’s a pretty clear advantage for the cloud giant over everyone else in this story, including VMware.