AWS Is Coming to Enterprise Data Centers, With or Without VMware

To help companies embrace the hybrid cloud, Amazon Web Services recently announced plans to provide enterprises with on-premises hardware that will allow them to use AWS cloud services inside their own data centers.

AWS Outposts is fully managed AWS-designed hardware that will let customers run AWS compute and storage services on-premises, fully integrated with the AWS public cloud. Outposts will come in two flavors: a VMware-centric version that will allows companies to run VMware Cloud on AWS locally, and an AWS-native version that will give them the same APIs and control plane as the AWS public cloud.

Analysts say the announcement is Amazon’s response to its cloud rivals Microsoft and Alphabet’s Google, whose hybrid cloud strategies include on-premises solutions. Microsoft Azure Stack – hardware sold by Microsoft’s partners such as Cisco, Dell EMC, Hewlett Packard Enterprise, and Lenovo – enables an on-premises version of the public Azure cloud. Meanwhile, Google is readying its Google GKE On Prem solution, which will give customers a way to deploy the Google Kubernetes Engine cloud service in their own data centers.

Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, said the announcement was “huge,” showing AWS doubling down on hybrid cloud, for which it’s already offered multiple solutions. Those include its Snowball Edge appliance, the Amazon Storage Gateway, Virtual Private Cloud, Direct Connect, and VMware Cloud on AWS.

“The biggest differentiator [for the new on-prem solution] is that customers can write to the same exact APIs to get access to AWS public cloud as they do with Outposts,” he said. “The same goes for VMware cloud. Outposts definitely raises the stakes on Azure Stack and on-prem OpenStack deployments.” (OpenStack is a family of open source software widely used by companies to build on-premises private clouds.)

AWS’s announcement also puts it squarely in competition with hardware makers, the likes of HPE, Dell, and Cisco. Rather than buy servers and storage from hardware vendors to build a private cloud, enterprises will now be able to deploy an in-house cloud through AWS Outposts, using AWS-designed hardware, Forrester analyst Dave Bartoletti pointed out.

“This puts more competition in the on-premises data center,” he said.

AWS Outposts

Analysts say AWS Outposts is perfect for edge data centers, Internet of Things (IoT) deployments, and applications where IT organizations are concerned about latency, or security and compliance. The hardware will be the same equipment that AWS uses in its own data centers, the company said.

“Your data center becomes an extension of their cloud,” Bartoletti said. “Think of it as a little mini-AWS cloud.”

AWS Outposts is currently in private preview and will be released during the second half of 2019, the company said. AWS will deliver the racks and also install them if customers require it. Amazon will also manage and maintain the on-prem equipment.

The VMware-centric version of Outposts, which will allow existing VMware customers to run VMware Cloud on AWS locally, lets enterprises use the same VMware control plane and APIs that they used to manage their internal infrastructure.

Two years ago, VMware partnered with AWS to build VMware Cloud on AWS to make it easy for enterprises that have standardized on VMware to move workloads off of their internal data centers to AWS. With VMWare Cloud on AWS, VMware’s Software Defined Data Center (SDDC) platform – which encompasses tools for virtual compute, storage, and networking – is available as a cloud service that runs on bare-metal servers in AWS data centers. The cloud service is managed by VMware.

The other version of AWS Outposts, the AWS-native variant, will give customers on-premises versions of Amazon Elastic Compute Cloud (EC2) and Amazon Elastic Block Store, with access to other AWS services, such as Relational Database Service, Amazon Elastic Container Service, Amazon Elastic Container Service for Kubernetes, Amazon EMR (a managed Hadoop framework), and Sagemaker, for deploying machine learning models.

AWS On-Premises, With or Without VMware

The announcement expands hybrid cloud options for enterprises, including an AWS hybrid cloud with or without VMware, to whom the recently struck AWS partnership has given a big boost in the cloud market.

With Outposts, VMware vSphere users will be able to run the full VMware stack on AWS hardware, especially if they are using VMware Cloud on AWS, Al Sadowski, a research VP at 451 Research, said. Enterprises using VMware for private cloud but not VMware Cloud on AWS are also candidates for dipping toes in the cloud waters with the new on-prem option.

“However, other enterprises may see this as an interim step to wean themselves off of VMware, as they endeavor to move completely off-premise,” Sadowski added.

VMware executives sought to downplay this concern, saying the Outposts announcement solidified and extended VMware’s relationship with AWS.

Ivan Oprencak, director of product marketing for VMware’s cloud platforms business unit, pointed out that VMware also has a play in the AWS-native version of Outposts. VMware has announced a set of integrated VMware products, called VMware Cloud Foundation for EC2, that will help customers integrate on-premises environment with the AWS-native variant of AWS Outposts, he said.

“Without VMware, AWS is going to have a hard time bridging into what customers have on-premise today,” he said. “Having VMware technologies communicate with applications that are running in your data center is what makes hybrid cloud real.”

The new VMware Cloud Foundation for Amazon EC2 is slightly different from the previously existing product with a nearly identical name: VMware Cloud Foundation. The set of tools for the AWS-native version of Outposts includes VMware NSX for networking, VMware AppDefense for security, and VMware vRealize Network Insight for network traffic monitoring.   

“This new offering is very distinct” from the original Cloud Foundation, Oprencak said. “It does not have the vSphere hypervisor – AWS is providing its own – and it does not have vSAN, but it has networking and management elements and other services included,” Oprencak said.

AWS’s move into on-premises data centers is a big departure from its previous strategy, but its partnership with VMware has prepared and allowed the cloud giant to make this move, some analysts say.

Video of the AWS Outposts announcement at AWS re:Invent 2018, where AWS CEO Andy Jassy appeared on stage together with VMware CEO Pat Gelsinger :

Since AWS launched in 2006, the company has believed that the best place to run everything is in its own cloud. This changes all of that, Bartoletti said.

“With VMware Cloud on AWS, it allowed customers to move some of their data center to the cloud and run it the same way with VMware tools,” he said. “So it was only a matter of time where AWS said well, we had to create a version of our infrastructure, so VMware could put their software in our cloud. There are customers that want to think about it the opposite way and want a little bit of cloud in their data center.”

Sticky Stacks

Overall, the big cloud vendors have the potential to succeed with their on-premises equipment, analysts say. The difference between Microsoft’s and AWS’s on-premises strategies is that Microsoft customers have to buy and manage their own Azure Stack hardware, while AWS will install and manage the hardware for customers, Bartoletti said.

“Microsoft was the first one to jump into this, and it’s doing well,” he said. “They have happy customers. I think both [Azure Stack and AWS Outposts] have value for customers who are aligned with one of those two clouds. If you already made a choice and committed to using Azure and Azure Stack, it makes sense for you, even if you have to run your own hardware. Same thing with customers who have a commitment with AWS or VMware Cloud on AWS. This is a nice logical way for them to modernize their data centers.”