Is EMC cloud strategy a victory for customer choice or just confusing?
EMC, the diversifying storage kingpin, wants you to know it’s fully aboard the cloud computing band wagon. Last week’s $1.2 billion acquisition of Virtustream put an exclamation point on that. But it also raised questions about EMC’s cloud strategy as in: Is there such a thing as too many clouds?
Virtustream specializes in public cloud applications tailored for corporate customers who really care about regulatory and compliance issues. As of last week, EMC (EMC) already fielded its own Atmos storage cloud and had purchased Cloudscaling for its OpenStack cloud expertise. Project Caspian, open-source software built to run new “born-to-the-cloud” applications, came out of that purchase and is slated to ship in the fourth quarter, said Cloudscaling Co-founder Randy Bias, who is now EMC’s VP of Technology.
But that’s not all: Don’t forget VMware’s two-year-old public cloud vCloud Air, which targets big accounts. EMC owns a majority stake in VMware (VMW), which is thus a crucial part of the EMC Federation forged by EMC Chairman and CEO Joe Tucci.
Federation or no, there is bound to be overlap between the big customers EMC will pitch with Virtustream and the big customers VMware will pitch with vCloud Air. And, to put it mildly, neither EMC nor VMware salespeople are known for pulling their punches when it comes to competitive situations.
EMC chairman and CEO Joe Tucci acknowledged the issue on the conference call announcing the Virtustream buy but also sugar-coated it:
“There is slight overlap with VMware [and Virtustream] and I emphasize slight. If you leave seams, that’s where competition will pry in,”
VMware’s cloud chief Bill Fathers put his own spin on the deal in his own blog post, pointing out that Virtustream is already a big VMware customer for example, so co-opetition lives.
And, to be fair, EMC is not alone in its fight for cloud validation. Hardware rivals IBM (IBM) and HP (HPQ)have also used acquisitions to accelerate their pace on various cloud fronts. The downside of assembling all these piece-parts is that they give the vendor a sort of stitched-together “Frankencloud” image.
Forrester (fortune-stock symbol=”FORR”] Research’s Principal Analyst Dave Bartoletti summed up EMC’s situation via email:
Virtustream gives EMC an accomplished complex enterprise app cloud hoster and managed services team. They could have built this organically via vCloud Air, but that would have taken longer. No details yet about how or whether they will integrate Air and Virtustream offerings, services, and/or data centers – we expect that be coming in the next month or so.
CloudScaling gives them a crack OpenStack-savvy private cloud building team, vCloud Air gives them a commodity IaaS platform, Pivotal gives them a PaaS entry point, and VirtuStream gives them a hosted private cloud proven in the field. It’s fleshing out to be a broad portfolio—integration and lines between the services will take time.
For those who aren’t immersed in the terminology, public clouds put shared resources to work for multiple customers as exemplified by Amazon Web Services, Google (GOOG) Cloud Platform and Microsoft Azure. Private clouds offer customers dedicated resources of their own. And hybrid clouds mix the two models so that sensitive information stays on company-controlled resources but other jobs run on an inexpensive public cloud.
And that brings us to EMC’s Enterprise Hybrid Cloud, yet another piece of the company’s cloud jigsaw puzzle. This product combines EMC hardware and software into a private cloud infrastructure but also works with vCloud Air to form a hybrid cloud. Similar integration with Microsoft (MSFT) Azure and OpenStack-based clouds is due later this year. Oh, and there will also be some interoperability with public cloud market leader Amazon (AMZN).
This array of cloud options can be seen as a customer-pleasing menu of choices or just plain confusing, depending on your point of view. In an interview with Fortune after the Virtustream news, Howard Elias, president and COO of EMC’s Global Enterprise Services Group, tried to sort things out.
The long and short of it, is that customers really do need different cloud varieties depending on the task at hand, he said. “They may want on- or off-premises; managed or unattended; production or test-and-development; mission-critical or otherwise clouds,” he said.
Virtustream’s strength lies in providing “up-front professional assessment services, service level agreements, reliability, availability, response times, all mapped with the customer and those applications migrate to Virtustream along with all the associated automation,” he said.
Service Level Agreements, or SLAs, specify what level of performance is expected by the customer from the provider and what sorts of payback or remedies there are if performance falls short.
Elias acknowledged that vCloud Air could run the same workloads, but “you won’t get the self-provisioning, and there’s an SLA for the underlying infrastructure capability, but not in terms of resiliency, performance etc.” That is, vCloud Air is positioned to work very well with an existing VMware workload running in-house but “you won’t get the curation and attendedness” that Virtustream provides, he added.
That sort of makes sense, except it seems like EMC is splitting the hairs pretty finely and there is bound to be contention in joint accounts. There will have to be plenty of customer education about which cloud is which, and the exact features offered with each cloud’s attendant SLA. In the meantime, Amazon is wooing more and more enterprise accounts with cheaper base computing and storage services, along with high-end enterprise-focused features and functions, by the minute. Tick tock.
One cloud analyst, who requested anonymity, said of EMC’s cloud game plan: “There could be an overarching strategy here, I just don’t see what it is.”
This story was updated at 6:08 p.m. EST with Forrester Research comment.