Cloud Computing Format War

I recently published a whitepaper up to TechNet gallery comparing the cloud computing strategies of Microsoft and VMWare. The paper is available at

Here is a quick excerpt:

A growing number of enterprises have begun to consider how “cloud computing” solutions can provide their businesses with the opportunity to grow quickly and achieve goals more efficiently than would be possible with traditional computing methods. Cloud computing is foreign and mysterious to some. On the simplest level, cloud computing refers to a network of remote computer servers that are hosted on the Internet. These servers can store and manage data files, and the information in the cloud can be accessed at any time from any computer. There are several forms of cloud computing, such as public, private, and a hybrid of the two. The extent to which VMware and Microsoft, two of the biggest players in this arena, utilize these different forms of computing is at the core of their respective strategies. With this paper, we seek to discover how Microsoft’s Azure cloud offerings stacks up to VMware vSphere cloud offerings, and determine who we feel will win “the cloud computing format war.”

Cloud computing was built on virtualization, and over the years, VMware has contributed greatly to server virtualization, thus hugely impacting the IT industry. In fact, VMware leads the virtualization market and is the authority when it comes to automating data center operations and managing virtual machines. However, since VMware has owned the market share with its virtualization offering, it has been slow to react to the cloud offering.

Microsoft has responded to VMware’s sluggishness by nimbly jumping in with what it has determined to be the future of cloud computing: the hybrid cloud. Microsoft has restructured its company in order be the “first mover” when it comes to cloud offerings (Ballmer, 2013, One Microsoft). Microsoft truly wants to define and “own” the cloud. However, it must keep in mind that the cloud is built on the virtual platform, and therefore the company will need to be innovative when trying to beat VMware at the game it created.

VMware, while slow at the get-go, has not been idle in this cloud war. VMware has a different definition of what the cloud is and will be, and it does not feel it is the hybrid form. Its strategy relies on its reputation in the IT industry, and on the consistently great private cloud it produces. VMware is trying to hold onto its current model, while Microsoft is trying to redefine the current market to meet its own needs.

In this paper we will first break down the industry in which these two companies compete by analyzing the environment using Porter’s Five Forces. We then will compare VMware and Microsoft’s strategies around virtualization and the different ways the two companies utilize these technologies. Finally, using two separate scenarios, we will analyze the race to define “cloud” computing, and the pros and cons of the fundamentally different strategies that these companies have in place to set the standard of what the cloud is.

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