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TechPointCloud

How IBM Stole Google’s Thunder

Barb Darrow
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Barb Darrow
Barb Darrow
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Barb Darrow
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Barb Darrow
Barb Darrow
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March 2, 2016, 2:33 PM ET
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IBM/vmware execs (Alan M Rosenberg/Feature Photo Service for IBM)Photo courtesy of: Alan M Rosenberg/Feature Photo S
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Last week, IBM trumpeted its new alliance with VMware loud and proud.

Under the agreement, the two companies are working to make it easier for businesses running VMware (VMW) vSphere virtualization on their own servers to move those workloads to IBM’s SoftLayer public cloud. Or if the customer prefers, to assure coexistence between vSphere running on-premises as well as vSphere running on IBM’s cloud.

It was a pretty strong win for IBM (IBM), which is seeking to build credibility in cloud computing in a market dominated by Amazon (AMZN)Web Services.

But behind the curtain, there was another player in the mix. Google (GOOG) was hoping to announce a very similar deal with VMware (VMW) within the same time frame, several sources told Fortune on condition of anonymity.

“Google really wanted to announce this and then all of a sudden IBM did a ninja move, and it was IBM’s deal,” said one source close to VMware who had knowledge of the process.

Google fields its own massive public cloud—a stockpile of shared servers, storage, and networking—that customers can rent instead of building more of their own infrastructure.

But like AWS, Google needs to show that its cloud can be a safe home for business data and applications and that it can work with on-site resources. Many business customers think they’ll save money by renting public cloud resources, but they still draw the line at putting their most precious information and transactions beyond their own firewall.

The hybrid cloud computing model that lets them mix public cloud and private resources that they can control is very attractive.

A good 80% of those companies now run VMware virtualization on their own servers, as noted by VMware CEO Pat Gelsinger on previous occasions. So you can see why cloud providers see those shops as the mother lode of potential new customers.

So why IBM and not Google? Well, for one thing, IBM has experience selling and implementing vSphere.

In advance of last week’s news, Jim Comfort, chief technology officer for IBM’s cloud unit, told Fortune that IBM’s services business is VMware’s largest distributor and that the company has already worked with VMware’s NSX network virtualization gear on SoftLayer.

That sort of experience is not something that Google, with its massive shared public cloud infrastructure, can claim—even though VMware co-founder Diane Greene has led Google’s enterprise group since November.

Read more: Google Means Business When it Comes to Cloud

It’s clear that Google, which is building out its own Google Cloud Platform as a competitor to Amazon Web Services and Microsoft (MSFT) Azure, still needs to show that it’s ready for the same kind of enterprise workloads that run on vSphere daily.

While a Google spokesperson had no comment on whether Google and VMware had discussed a hybrid cloud partnership, she did note that Google has been working closely with VMware to benefit mutual customers. She wrote via email:

We have added Google Cloud Platform services such as Cloud Storage, BigQuery and Datastore into vCloud Air. We’re also working with VMware​ in the containers space; VMware announced support for Kubernetes early on, and Google and VMware are co-founders of the Cloud Native Computing Foundation. VMware’s collaboration with IBM around SoftLayer is a natural evolution and good for customers.

IBM and VMware declined to comment on this story.

For more about IBM’s cloud strategy, watch:

IBM is hardly alone in wooing VMware users. AWS and Microsoft both have offered customers administration tools to help them bridge the vSphere-cloud gap. What made last week’s announcement special is that IBM is promising a way to actually move the work from on-premises server rooms to the cloud with the explicit help and blessing from VMware itself.

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To be fair, there’s nothing about this IBM-VMware partnership that screams exclusivity, and VMware will make alliances wherever they make sense. It’s conceivable, but not likely, that Google could disclose deeper partnership plans with VMware at Google Next later this month in San Francisco.

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Barb Darrow
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