VMware's Cloud Foundry Splits; They Say It's Pivotal

By | Dec 14, 2012

VMware's Cloud Foundry gained fame as a way for companies to build open source platform-as-a-service (PaaS) solutions. Now, the virtualization leader - along with storage provider EMC - has announced a spinoff of this ecosystem into a new effort known as the Pivotal Initiative. So far, only a teaser blog post has been released, and interested parties are advised to "check back" in 2013 for further details.

Mum's the Word

Despite the closed mouths of both VMware and EMC, some details about the split have emerged. As a GigaOM article reports, the Pivotal Initiative will have Paul Maritz, EMC's chief strategist and VMware's former CEO at its head, which according to Cloud Elements CEO Mark Geene, means "they're serious about this business." Geene anticipates more resources and a greater focus on the Foundry when the Pivotal Initiative takes over.

It's also worth noting the commercial portion of Cloud Foundry is staying with VMware, leading some to wonder how it will compete with PaaS solutions already developed using the open source version: for example, ActiveState's Stackpro (used by Hewlett-Packard) and Rackspace's AppFog. Ideally, the Initiative comes in as a solid player in the emerging PaaS world, further enhanced by a robust storage provider.

Going Up

Stock website Trefis reports the new project will include approximately 1400 employees, 800 from EMC and 600 from VMware, and says when the Pivotal Initiative announces an official structure in Q1 of 2013, valuations for both companies will rise. Already, the site has a $110 price estimate for VMware, 25 percent above the current market. Clearly, the move is good news for stock prices and business bottom lines - but what about midsize IT?

In a cloud services market set to hit $73 billion by 2015, it's no surprise VMware wants to diversify its offering and split the open source and commercial portions of its Foundry. The cloud's potential is undisputed; what remains at issue is how services will be delivered. Some argue for open source to take a lead over proprietary technology, owing to its customization and policies of fair use. Others expect commercial ventures to triumph thanks to greater capital influx, fewer committee roadblocks on the way to approved versions, and therefore a shorter time line for new releases.

For midsize IT admins, all this competition is healthy. Commercial ventures push open source to provide comparable features, while things like the original Cloud Foundry ecosystem keep big companies relatively honest: If IT pros have a viable alternative in open source, proprietary efforts can't stray too far from the beaten path. Bottom line: Two cloud foundries are good for VMware and for midsize IT.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.

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