VMware's CEO admits old rival Amazon's cloud has grown 'beyond expectations'

VMware has been one of Amazon Web Services' fiercest rivals over the years.

But on Thursday, it finally waved the white flag, striking a major partnership that will make it easier to run VMware's software on Amazon's cloud.

VMware CEO Pat Gelsinger stressed it's a "customer-driven" move, but did indicate that the growth of AWS and the general public cloud market contributed to the decision, saying it's grown "beyond expectations" over the past few years.

"In the several years that have passed, the adoption of public cloud and AWS has accelerated, beyond even analysts or [AWS CEO Andy Jassy's] expectations," Gelsinger told Business Insider.

Through the partnership, VMware will be able to bring its flagship software vSphere, VSN, and NSX, to Amazon and make it available to its customers as a cloud service. In a nutshell, it allows customers to take a "hybrid" approach, using both their own on-premise datacenters and the cloud in the form of AWS.

"It brings the best of both of the worlds together," Gelsinger said.

AWS CEO Andy Jassy says he believes the transition to an all-cloud environment will continue, but suggested the "hybrid" structure could be the more popular move for now.

"We do have a perspective that we're going through a gigantic transition right now from people running everything on-premises to people running mostly in the cloud, but that transition is going to take a long time," Jassy said. "None of us know how long it's going to take."

Gelsinger agreed: "The crossover [to the cloud] will happen, but we're talking about decades that will be a hybrid environment, even in the most optimistic of views."

Although Microsoft was not part of this announcement, and is a major competitor to both companies, the deal validates Microsoft's approach, which has long been focused on a hybrid mix of cloud and on-premises options for customres.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.