Amazon deepens its partnership with VMware to go after companies that don’t use the cloud

Editor’s Note: Another example of Amazon listening to what the users need instead of telling them why their solution (in this case AWS) is the only right solution. Technology companies built to support the business always seems to be more responsive and agile than those who had a brilliant idea about a technology and want businesses to use it–regardless of whether it is the right fit.

Published on CNBC AUG 27 2018 byJordan Novet

Amazon Web Services has emerged as a dominant force in cloud computing by hosting other companies’ technology infrastructure in its massive data centers. But AWS is also rolling out services for companies that do it the old way.

On Monday, Amazon and VMware introduced a version of Amazon’s cloud-based database management software that’s meant for companies that still use on-premises data centers.

The announcement at VMware’s VMworld conference in Las Vegas is the latest example of Amazon’s shift in strategy to support corporate computing outside its own facilities, even as more business moves to the cloud, where AWS is the market leader. The move strengthens AWS’ so-called hybrid-cloud offerings against rivals Microsoft, Google and IBM.

The software, which will be available in the next few months, is designed to make it easier for network administrators to run their databases across more servers, regardless of whether those machines are stored in house or hosted by Amazon. The product — Amazon Relational Database Service on VMware — supports popular databases from Microsoft and Oracle, as well as open-source options like MariaDB.

Amazon and VMware started working together on a combination of cloud and on-premises technology in October 2016. The partnership is helpful for systems administrators who are familiar with VMware and want to take advantage of cloud.

VMware shares have more than doubled since that deal was announced. The company has rolled out several updates, and hundreds of VMware customers are using its technology on AWS, VMware CEO Pat Gelsinger said on the company’s quarterly earnings call on Thursday.

The new technology could pose a threat to Microsoft’s Azure Stack, on-premises software tools that mirror what’s available in the company’s Azure public cloud.

“Amazon reps today, when they hear Azure Stack, they bring in VMware Cloud on AWS,” Sanjay Poonen, VMware’s chief operating officer, told CNBC last week. “The partnership with VMware is the best alternative to Azure Stack.”

It could also represent a new challenge to Oracle, which operates its own public cloud. Amazon has been working to move off of Oracle’s database software entirely.

Gelsinger has told analysts that VMware’s work with AWS would not result in a material amount of revenue this year. Stifel analysts wrote in a note last week that they don’t expect material revenue from VMware on AWS until at least VMware’s 2020 fiscal year, which begins in April 2019.