Microsoft and VMware are working on a partnership that won't make Amazon happy

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Microsoft CEO Satya Nadella

• VMware is cozying up to Microsoft with a new cloud partnership.
• This is similar to the deal VMware has with Amazon Web Services.
• Microsoft and VMware have been rivals for decades so this partnership is another feather in Microsoft's cap as it seeks to overthrow Amazon's lead in cloud computing.

VMware and Microsoft are working on a new cloud partnership, quietly teased in December. And this could help Microsoft as it seeks to overthrow Amazon's lead in cloud computing.

That's because VMware and Amazon Web Services are also major partners. And, in a rare role-reversal, Amazon is considered somewhat dependent on the VMware partnership to push its all-important cloud business into the next big thing known as "hybrid" cloud.

Hybrid is when companies keep some of their apps in their own data centers and use the public cloud for others, all of it engineered to work happily together. AWS is the leader in public cloud but VMware is the king of private data centers and hybrid computing, with half a billion customers. The AWS/VMware duo has been widely seen as a way for Amazon to stay in front of a fast-growing Microsoft Azure cloud business.

But partnering with Amazon is like swimming with a scorpion on your back.

Amazon never hesitates to compete with its partners. AWS routinely launches its own services that compete with those who use or sell their wares on its cloud. Amazon even competes with some of its biggest AWS customers like Netflix.

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Once VMware's customers move their apps to Amazon's cloud, there's nothing to stop Amazon from trying to upsell those customers to Amazon's home-grown technology, the next-generation stuff that upends VMware's bread-and-butter technology. In fact, in December, Amazon released just such a service, called Firecracker.

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YouTube/Amazon Web Services

And, interestingly enough, it was also in December that Microsoft and VMware quietly teased information about a partnership that will put VMware's flagship hybrid cloud software on Microsoft Azure, a similar thing as its partnership with AWS. The VMware/Azure service was still in "preview" mode, where customers can kick the tires, the two companies said.

They didn't say when this service would be generally available. But six people told the Information's Kevin McLaughlin, that the two may announce details, and even a broader partnership, in a matter of weeks.

VMware and Microsoft have been arch rivals for decades even though they have also partnered up as needed over those years.

And in its blog post about the new Microsoft Azure partnership, VMware made it very clear that the company feels no more a sense of monogamy toward AWS than AWS feels toward VMware. Ditto for Microsoft.

Ajay Patel, the VMware's exec responsible for VMware's cloud products, pointed out in the post that VMware is also partnering with IBM's cloud, European cloud provider OVH, Rackspace, CenturyLink and will do so with "others come to market," he said.

Microsoft did not immediately respond to a request for comment. VMware declined comment on the Information's report that it was working on a bigger partnership announcement.

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