VMware doubles down on cloud in ASEAN

VMware signalled its intention to become a bigger supplier of hybrid and multi-cloud offerings at its user conference this year, with a slew of enhancements to its portfolio aimed at easing cloud management and application modernisation.

The transition has been underway for some time, and in June 2022, VMware introduced vSphere+, the cloud-based version of the vSphere virtualisation platform, complete with cloud-based infrastructure management, integrated Kubernetes, access to hybrid cloud services and a flexible subscription model. In Southeast Asia, where cloud adoption varies widely, VMware is billing itself as the “independent party” in the form of a single platform that its customers can use to manage their hybrid and multi-cloud workloads.

At the recent VMware Explore conference in San Francisco, Paul Simos, VMware’s managing director and vice-president for Southeast Asia and Korea, dives deeper into the company’s cloud strategy for the region, and what VMware users in ASEAN think about Broadcom’s impending acquisition of VMware.

How is VMware planning to bring the new cloud offerings announced at Explore to ASEAN customers?

Simos: We intend to work as an ecosystem to help customers get from where they are today on the cloud. The region is so diverse, with different stages of maturity throughout Southeast Asia. The maturity of our platform and the consistency it delivers will help a lot of our customers get to cloud-smart faster than what we’ve seen in other regions around the world.

There’s always a balance between trailblazing versus learning from the experience of others. A lot of customers in Southeast Asia will benefit from the lessons learned globally, and in the Asia-Pacific region, things like VMware Aria will help to address some of the challenges in the market, where digital expectations of consumers are growing.

And so, our customers are having to stay at the edge as much as they can to innovate at a greater speed and be agile. Out of the announcements, there’s a lot of good input into how cloud-smart can come about and to provide that frictionless experience. Our customers will benefit more as we bring the new offerings into our region.

Let’s talk about the maturity of organisations in the region in their cloud journey. There are companies that are still virtualising the three-tier architecture while other organisations are more advanced. Could you provide some colour on the differences in maturity and how that affects your overall go-to-market strategy?

Simos: I think that, irrespective of maturity, all customers recognise they face the same challenge, and that’s really driven by consumer behaviour. We have some markets in the region that are still only 40% virtualised and are very heavy on bare metal. And then we’ve got mature markets like Singapore.

There are differences in maturity, but what I like about VMware and the announcements is that whether you are still virtualising your datacentre through to operating a cloud smart, multi-cloud environment, the thread is consistent. And so, our go-to-market doesn’t necessarily change based on the maturity of the market because customers are trying to solve the same problems.

What we do observe in the region is that customers see the value of VMware’s portfolio increasing as they go on their cloud maturity journey. We become the independent party for them as they look at multi-cloud. And if they’re looking at who is going to give them visibility and cost management, they’re looking to us rather than the hyperscalers.

One of the reasons customers end up in cloud chaos is because cloud-first means they have to do it and do it quickly. But they end up creating multiple silos across all parts of their environment, so they want to be able to consolidate that complexity into a single scalable platform.

A lot of customers say to us that undertaking the transformation and modernising applications is relatively easy to start with. The point when they start to feel the need to shift is when they want to do it at scale and at speed. That’s where things like Aria and the Tanzu Application Platform can bring that extra scalability and consistency across their environment.

Could you tell us about the transition to a consumption-based model in the region with vSphere+? I understand that VMware has recently raised prices of perpetual licences for some core products. There might be companies that want to move to a consumption-based model, but they may not be ready at this point. How do you see the dynamics playing out in the region?

We become the independent party for them as they look at multi-cloud. And if they're looking at who is going to give them visibility and cost management, they’re looking to us rather than the hyperscalers

Simos: We did have a price rise at the start of August, and if we look at the context of that increase against global inflation for the past three years, it was a timed adjustment on pricing. In terms of the consumption model, some markets are at that maturity point where they understand the difference between capex (capital expenditure) or opex (operating expenditure). We’ve had customers come to us and say: “Why can’t I take my vSphere environment and have it as a consumption model?” That’s been something that we haven’t had in the market before vSphere+ and vSphere 8.

There are markets in Southeast Asia that still have a big capex bucket. And so, for us, there’s an educational piece through different customer journeys. Where are they at on their journey towards the cloud? The hyperscalers have done a fantastic job trailblazing and setting the agenda around what it means to have a cloud consumption environment and business model.

Now, the flipside is that a lot of customers that went cloud-first have realised cost management and cost effectiveness might not be the reasons they’ve gone to the cloud. There might be other reasons like resiliency, scale and speed, so we work with each customer to understand their plans over the next three to five years. What does your consumption model look like? What is your business model going to look like? Lots of customers are starting to realise that having a very large datacentre on their books is capital-heavy and are looking to get out of that business.

They recognise that real estate and datacentres are not their core, so how do they move to a consumption model over time? It’s about finding that sweet spot on the customer journey and working through the right model for the customer.