Cloud Hosting

VMware is exiting the hybrid cloud hosting business as the company sells its long-struggling vCloud Air division to French hosting company OVH for an undisclosed price.

Introduced at the VMworld conference in Las Vegas in 2008 with the hybrid service following in 2013, vCloud Air was pitched as an Infrastructure-as-a-Service cloud hosting offering that aimed to deliver enterprise information technology departments an edge in managing heterogeneous cloud environments versus competitorsthat mostly offered homogeneous solutions.

Competing directly withAmazon Web Services, Microsoft Azure and IBM Softlayer, vCloud Air failed to gain serious traction with a product offering that lacked key features offered by itsrivals, including pay-as-you-go pricing and even the ability to sign up to the service with a credit card.

In 2015, a year when Wikibon, SiliconANGLE Media Inc.s analyst group raised many doubts about the service, it was declared as pretty much dead. Rumors flew thatVMware had drastically scaled back development of the service and was considering pulling theplug on it altogether.

VMware had insisted the service was on track. In a SiliconANGLEinterview in August 2015VMware Vice President of Cloud Services Matthew Lodge claimed that the service was growing rapidly and that it had become one of the big three players in the space. The executive claimed the service enjoyed 80 percent year-on-year growth contributing $350 million to $450 million to VMwares revenues.

VMwares top cloud executive Bill Fathersstepped down as boss of vCloud Air in April 2016 when it was noted again that thefuture of the service was once again uncertain, this time in light of the then-upcoming merger between VMwares parent company EMC Corp. and Dell Inc.

OVH, which is one of the largest web hosting companies in the world according to figures from Netcraft, was naturally more positive about the vCloud Air business. It saidin a statement that with this acquisition, OVH will offer a very unique value proposition for larger enterprise deployments, including rich capabilities for migration and advanced hybrid functionalities for virtual data centers. This will benefit all our clients across the globe.

After the acquisition, which is expected to close in the current quarter,vCloud Air customers in the U.S. and Europe will be moved to OVH, which has 20 data centers in 17 countries with 260,000 servers. According to Forbes, the acquisition does not include the corehybrid cloud technology underlying the product, meaning that existing vCloud Air partnersincluding Rackspace Inc. and IBM Corp. will still have access to the technology directly from VMware itself.

The acquisition will not affect VMwares bottom line. The company reiterated its previously issued financial guidance for the first quarter and full fiscal year 2018.

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VMware exits hybrid cloud hosting business with sale of vCloud Air to OVH - SiliconANGLE (blog)