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IBM, VMware Expand Hybrid Cloud Partnership

At VMware Explore 2022, the tech giants unveiled plans for joint product development and consulting alliance aimed at modernizing hybrid cloud environments in regulated industries

IBM and VMware took their long standing partnership to a new level at the VMware Explore 2022 conference in San Francisco, announcing they would support customers’ information technology modernization initiatives via joint product development and consulting engagements.

The two tech giants said they are broadening their partnership to help their 2,000 common clients modernize their mission-critical workloads and expedite time to value in hybrid cloud environments. IBM is the first VMware partner to combine consulting expertise and new jointly engineered cloud solutions for clients running mission-critical workloads in VMware-based environments, according to Howard Boville, the senior vice president of the IBM Cloud platform.

“Together, IBM and VMware are supporting our mutual clients in regulated industries by offering something no two other companies are delivering—to more easily leverage hybrid cloud services securely—wherever and however they wish to run them,” Boville says.

“With IBM and VMware, our customers get a combination of innovation and consulting experience based on decades of close collaboration and experience in meeting the business challenges of thousands of customers around the world,” says Mark Lohmeyer, senior vice president and general manager, cloud infrastructure business group, VMware, in a prepared statement. “This ongoing collaboration will enable us to better streamline the user experience for our mutual enterprise customers looking to run VMware mission-critical workloads that require higher levels of security, resiliency and compliance support in financial services and regulated industries,” he adds.

At VMware Explore 2022, IBM and VMware announced:

  • The availability of IBM Cloud Satellite wherever VMware applications run. The two firms are collaborating to enable IBM Cloud Satellite for VMware. For workloads that need to remain on premises, IBM Cloud Satellite now supports VMware workloads in any environment where they run, bringing the enhanced security and open innovation of IBM Cloud services to the client’s datacenter. IBM Cloud Satellite is a management platform that IBM unveiled in 2021. It centralizes the management of hybrid cloud computing environments. It brings a secured and unified layer of cloud services for clients across environments, regardless of whether the data resides on or off premises or at the network edge. Specifically, the IBM Cloud Satellite solution brings a more secured and unified layer of cloud services for clients across environments, in any environment. As part of the announcement it will now support on-premises VMware workloads, bringing enhanced security and open innovation of IBM cloud services to the customer’s data center.
  • IBM Consulting is now a Global Systems Integrator (GSI) for VMware. As part of the expanded partnership, IBM Consulting is now a GSI Partner for VMware to help clients accelerate their business transformation and hybrid cloud journey. IBM Consulting will provide services to migrate, modernize and manage clients’ most important workloads across any hybrid, multicloud environment in an open, more secured way. This is critical for clients who are running applications across more than one cloud and are looking for the deep skills and expertise required to help with the security, management and reliability needed in these environments.
  • The expansion of VMware and IBM Joint Innovation Fund. Since launching the IBM and VMware Joint Innovation Lab in 2018, 20 hybrid cloud and AI-focused projects have been completed to extend the capabilities of IBM Cloud and address client needs for mission-critical VMware workloads. For example, the creation of VMware-enabled reference architecture was developed and integrated into the IBM Cloud for Financial Services offerings. The Lab melds engineering, sales, marketing and enablement capabilities from both companies. And it acts as a co-innovation engine for solving client problems. The new agreement will expand the Lab’s innovation pipeline for another three years with funding for the development of joint products and solutions.

IBM and VMware Pact Accelerates Customer Time to Market, Time to Value

IBM and VMware have partnered for the last two decades and the companies have many synergies, says Zane Adam, vice president of IBM Cloud. During a pre-briefing with industry analysts last week, Adam noted that the “IBM Cloud is also the largest provider of VMware cloud workloads worldwide.”

“We have 2,000 joint customers and we can provide them with complete solutions in a familiar interface that includes everything from the hypervisor level to disaster recovery, backup and security as well as IBM and VMware’s combined consulting expertise,” Adam says.

During a follow-up interview with TechChannel, Adam disclosed that the IBM and VMware partnership enhances and optimizes the products that VMware has for the IBM Cloud.

“We’re closing the feature and functionality gaps and addressing customers’ most pressing issues: reliability, openness and cyberresiliency,” Adam says.

For example, the joint offerings will run on zSystem mainframe and IBM Power servers which provide the highest levels of reliability, uptime and security in the industry. The latest data from ITIC Corp. a Boston, MA-based research firm that tracks reliability found that the zSystem and IBM Power delivered the highest levels of uptime among 18 different mainstream server distributions over the last 14 years. The ITIC survey polled 1,550 enterprises from January through July 2022. The IBM z14, z15 and z16 mainframes averaged just 0.43 seconds of unplanned per server monthly downtime while the IBM POWER8, POWER9 and Power10 servers recorded just one minute of per server unplanned downtime each month. Additionally, the ITIC survey also found that the zSystem and IBM Power servers delivered the highest levels of security.

All of this means that the IBM hardware running VMware workloads in the cloud can lower customers’ total cost of ownership (TCO) and deliver immediate return on investment (ROI).

IBM’s Adam told TechChannel that “in the next 18 months, IBM and VMware will release a set of five or six jointly developed and jointly funded product offerings.”  While could not divulge the specific products or give an exact timetable, Adam said, IBM and VMware will share the IBM Cloud on VMware offerings with the Open Cloud foundation and the two firms will deliver both managed and highly customized solutions tailored to customers business and technical needs.

Analysts Weigh In

The IBM and VMware expanded partnership is aimed at companies in highly regulated industries like financial services, healthcare, government, utilities and transportation that are seeking to automate, scale, secure and modernize core business workloads to create better economies of scale and ensure that their clients fully comply with the ever-expanding array of increasingly stringent regulatory compliance laws. Additionally, the IBM and VMware partnership makes it easier and more economical for many enterprises to provision and deploy custom and open-source applications in the cloud and leverage the two firms’ combined consulting expertise.

“The partnership is a win-win for IBM, VMware and their common customers,” says Rob Enderle, president and principal analyst at the Enderle Group, a Bend, Ore. Consultancy. “IBM has the top performing, most reliable and secure servers and VMware has long been a leader in the virtualization markets. Both companies have been solidifying their presence in the cloud with products and service offerings. Together, they make a formidable combination that can deliver the best of on-premises and off-premises solutions and services,” Enderle noted.

Enderle’s sentiments are echoed by other industry analysts and evidenced by IBM’s recent financial reports. In January 2018 IBM reported revenue growth for the first time in five and a half years, ending a streak of 22 consecutive quarters of declining sales. In the last several years under the stewardship of chief executive Arvind Krishna, IBM has found solid financial footing as it transitions its business to focus on the cloud—particularly hybrid cloud environments—AI, data analytics and consulting. Indeed, much of IBM’s recent financial gains have been fueled by its increasing success in cloud computing.

Over the last 12 months for example, IBM reported cloud revenue of $21.7 billion (USD) an increase of 19% at constant currency and accounted for 35% of Big Blue’s total revenue. For fiscal year 2021, IBM reported hybrid cloud revenue of $20.2 billion (USD), up 20% from the prior year. IBM’s cloud success continued this year. In the latest 2022 second fiscal quarter ending June 30, IBM posted sales of $15.5 billion beating Wall Street analyst estimates of $15.2 billion fueled by solid gain in the hybrid cloud and infrastructure market segments.

In recent research note, Futurum Research analysts Daniel Newman and Todd Weiss characterized IBM’s Q2 2022 financial results as “impressive, with clear and steady growth heading into a mountain of headwinds across the market and global economy,” noting that under Krishna’s leadership, “IBM is getting close to double digit growth.”

A Strong, Enduring Partnership

IBM and VMware’s expanded partnership is a win-win for both tech vendors and their respective customers. Both companies bring a strong cloud, virtualization, hardware infrastructure, services and consulting expertise to the table.

The Enderle Group’s Enderle noted that it will also strongly appeal to prospective corporate enterprises in a wide range of vertical market segments. “It’s a strong, enduring partnership that just got stronger,” he says.

IBM’s Adam says, “IBM Cloud for VMware meets you where you are and takes you where you want to be. We’re taking a holistic approach, addressing customers’ critical need for reliable, secure and open hybrid cloud solutions and helping our customers to contain costs.”