Amazon and VMware Are Now Best Friends When It Comes to the Cloud

October 13, 2016, 10:52 PM UTC

It’s official: Amazon Web Services and VMware are now partners when it comes to cloud computing.

The two technology giants and former rivals said Thursday during a press event in San Francisco that they are now partners and are collaborating on new technology that will let customers use VMware data center management software on Amazon’s cloud computing service. Fortune’s Barb Darrow reported on the partnership last week.

As part of the deal, Amazon (AMZN) will be VMware’s “primary public cloud partner” while VMware (VMW) will be Amazon’s “primary private cloud partner.” The public cloud refers to a cloud service like AWS in which companies can buy computing and storage resources on demand. The private cloud, on the other hand, refers to a company’s internal data center that’s been outfitted with specialized software that mimics some of the flexibility and features of the public cloud.

AWS CEO Andy Jassy said that some of Amazon’s big business customers wanted a way to more easily use their existing data center hardware in conjunction with Amazon’s cloud service to power their existing corporate software.

Get Data Sheet, Fortune’s technology newsletter.

Jassy said that these customers wanted to use the same VMware software they use to run and manage their data centers to also manage their Amazon cloud services.

Amazon’s customers didn’t like that they had to essentially choose to either use AWS or abandon their existing VMware software and internal data centers, Jassy explained.

Currently, it’s possible for businesses to tweak their corporate infrastructure so that they can run both AWS and VMware software together, although it takes some clever software engineering and know-how. The new “VMware Cloud on AWS” service, to be available in the second half of 2017, presumably makes this task easier and will include VMware support staff services as well as let VMware customers pay for the service using their existing contracts.

Although both Amazon and VMware engineers worked together to create the new service, VMware will be responsible for selling it, with plans in the works for Dell (DELL), VMware’s parent company, to also sell it as well, VMware CEO Pat Gelsinger said. Customers will also be able to access the new service from the AWS online store where they can purchase cloud services.

Amazon and VMWare Plan to Announce New Partnership

Earlier this year, VMware announced a similar partnership with IBM (IBM), which also sells a competing cloud computing service to AWS and Microsoft’s (MSFT) Azure cloud service. Gelsinger said that this deal is different because VMware will be responsible for selling and offering support for this new “VMware Cloud on AWS” service.

“Obviously the integration with Amazon is a big differentiator in the services,” Gelsinger said about the current deal versus the IBM deal. “IBM is a huge and important partner for us—We are very committed to continuing to deliver the initiative we announced with IBM.”

Jassy said the new service will let VMware customers “use their existing licenses and existing billing services” to purchase Amazon cloud computing resources. The companies did not say how much the service would cost, but Gelsinger said it would be a “very compelling offering.”

Amazon, which has sold a cloud computing service for more than a decade, is seen by analysts as the biggest cloud computing provider in terms of how much customer data it holds, as well as how much computing capacity it delivers to clients. Although the AWS service has been popular with startups like Airbnb and Netflix (NFLX), bigger, more established businesses have been increasingly using its service instead of buying more data center hardware.

Exclusive: VMware Will Team With Former Nemesis Amazon in Cloud Pact

When asked whether Amazon’s startup clientele are interested in building out internal data centers and using VMware software, Jassy said that these companies have built “their entire business on the cloud” and he doesn’t “see that reversing.”

“This very much for us, this is an enterprise move,” Jassy said in regards to AWS using the deal to capture bigger businesses.

Gelsinger, however, said he disagreed with Jassy’s assessment on startups only using cloud services. He said that as startups get bigger and want to gain older and more established customers, they “are very interested” in possibly building internal data centers to accompany their cloud infrastructure.

“We think there’s a good value proposition for those customers as well,” Gelsinger said of startups.

Read More

Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward