Joseph Tsidulko on August 29, 2017, 8:25 pm EDT Partners said the #VMwareCloud On #AWS offering is destined to reshape the cloud landscape with pricing that will appeal to customers evaluating #publiccloud and #privatecloud alternatives. The joint service beats on premises private cloud total cost of ownership, and is even in line with public cloud options including AWS, according to partners who have evaluated the pricing model.  #Datapipe, an AWS premier partner and VMware cloud provider, said an intitial analysis of the price sheet shows the new offering is "competitive with cloud native and cheaper than on prem (alternatives)," said Datapipe Director of Product Management David Lucky. "They kept telling us [pricing is] going to very attractive." [Related: VMware CEO Pat Gelsinger Describes The Virtualization Giant's New Mission To Be A Multi-Cloud Lynchpin] To be successful reselling the offering, Datapipe – which has been testing the offering for the last six months - needs to be able to show customers that if they use VMware Cloud on AWS to move workloads from their on-premises environments, they'll save money, Lucky said, noting the pricing is "in the band where it needed to be." Breaking the VMware Cloud On AWS pricing down for customers is no easy task, given the range of options, services and incentives. But Amazon and VMware have crossed the first hurdle with the new pricing model, he said. AWS CEO Andy Jassy, after joining VMware CEO Pat Gelsinger in a keynote Monday (the same day the pricing was revealed), said that VMware Cloud on AWS is "much more cost effective" than rival hybrid cloud options on the market. John Blumenthal, vice president of project management at CloudPhysics, a cost-optimization software developer with close ties to VMware, told CRN that by introducing the offering at a relatively low price point, VMware has created a market dynamic that might generate broader adoption of its on-premises software. The joint offering with Amazon should drive other "hypervisor-based vendors," especially those selling hyper-converged infrastructure, to commit to VMware so they can leverage the hybrid capabilities needed to remain competitive, Blumenthal said. CloudPhysics has analyzed against thousands of anonymized organizations stored in its IT industry data lake, comparing costs across public cloud providers and on-premises solutions, Blumenthal said. The conclusion: VMware Cloud on AWS "represents the best available cloud cost structure" for running VMware environments once discounts are applied targeting the virtualization vendor's existing installed base. The service costs $8.37 hourly per host, roughly $6,100 a year, according to VMware's price sheet. And there's a minimum of 4 hosts for any cluster. Each host offers 2 CPUs with 36 cores, 512 GB of RAM and a 3.6 TB cache, plus 10.7 TB of raw capacity flash storage. Once reserved instances come into play, at some unspecified point in the future, one-year contracts will offer an additional 30 percent savings, and three-year contracts would cut the bill by 50 percent, according to VMware. That's in line with the total cost of ownership of a generic "native cloud" from any major vendor, which VMware pegs at between 6 and 9 cents per VM, per hour. And it beats the 10- to 17-cent hourly charge for a VM on a comparable on-premises deployment, according to VMware. Rhett Dillingham, a senior analyst at Moor Insights & Strategy, crunched the numbers for himself after prices were revealed, in addition to conferring with the product's marketing team and AWS partner team to get a firmer understanding of the details on the approach to pricing. With VMware Cloud on AWS, VMware is clearly aiming to undercut the equivalent on-premises vSphere environment, especially for customers committing to three-year contracts, Dillingham, previously a product manager at AWS, concluded. There are "significant variables" at play when assessing how closely the cost difference between private verses public cloud infrastructure will align with specific customers with VMware's TCO projections, he said. But overall, when committing to the three-year reserved instances (not yet generally available), VMware users should save money over their on-premises servers, storage, and networking deployments, according to Dillingham. That said, compared to AWS EC2 virtual machines booked on three-year reserved instances – an easier calculation to make – VMware for AWS comes in almost 50 percent more expensive, after taking advantage of VMware's 25 percent "hybrid loyalty program" discount on reserved hosts, he said. The premium over native AWS EC2 "threads the needle of delivering an opening cost story," Dillingham told CRN. The price is "compelling enough to drive consideration by their installed base customers while starting high enough to allow testing how high their margins can be on public cloud pay-per-use and subscription models," Dillingham said. And the VMware software stack lends value beyond delivering an operationally consistent experience across cloud environments. VMware customers could achieve further cost efficiency by taking advantage of performance and availability benefits of features like vSAN to pack more VMs per host than the maximum 32 machines allowed by EC2's equivalent instance family, he told CRN. Eric Kaplan, CTO of Chicago's AHEAD, another partner in the inaugural channel bringing the solution to market, said VMware Cloud on AWS is coming to market at a good time. "We've seen a huge spike in enterprise clients looking for guidance around workload placement," Kaplan told CRN. That's a conversation that goes well beyond cost. It "must incorporate specific use cases, geographic availability, data governance, and accessibility to services beyond just compute, storage, and networking," Kaplan said.
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