VMware (NYSE:VMW) has emerged as the leader in hybrid cloud integration market with its relationships with AWS, Azure and GCP. The company’s market leading position in the on-premise virtualisation world (essentially data centres) has enabled it to be effectively able to offer bridge services to the public cloud universe.
VMware has extended its underlying technology of providing abstraction services across on-premise and cloud, making it a layer above the underlying private and public clouds.
Given the massive shift towards cloud and subsequently towards a multi-cloud and hybrid-cloud environment, VMware’s offerings have been rated amongst the leaders in this space.
While the company has been working with almost every major cloud player, the VMware cloud on AWS deserves special mention.
Not only has VMware professed to the uniqueness of its relationship with AWS but also has been seeing significant traction in business – in 4Q19, VMware ended signing up its largest ever deal at $20 million on the back of this partnership.
What is also notable is that while VMware’s association with the largest public cloud provider is increasingly becoming an avenue for AWS to also offer its on-premise offerings (AWS Outposts), VMware also continues to work towards building its offering sets with the likes of Azure and GCP.
VMware’s partnership with Azure through the Horizon cloud has with Google appears to have been dictated by market forces, making VMware potentially the only player in the space that can boast of solid partnerships across all the large cloud vendors.
While IBM has also been a horizontal partner for VMware, the industry giant’s acquisition of Red Hat could present a slightly challenging outlook for the IBM-VMware relationship, given that Red Hat was not particularly appreciative of VMware’s licence approach versus Red Hat’s open source offerings.
Another notable player that has been emerging of late could be Oracle. While Oracle has been best known for its database and ERP products, the company has been seeing traction with its new cloud architecture that can potentially alter the way cloud environments are run.
Considering the various aspects of the cloud integration market and VMware’s position and momentum within, while technology innovation can certainly pose a risk, VMware’s industry leading position does offer a significant moat.
Conclusion: Given the company’s close relationship with all the major public cloud providers, VMware’s leading position in virtualisation and the growing need to manage hybrid cloud environments, even at all-time highs the VMware stock can potentially offer strong returns over the medium term.
Disclaimer: This article is not intended as investment advice. Readers should not rely exclusively on this piece and must conduct their own due diligence before committing to any positions.
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This contribution is for informational purpose and does not constitute investment advice nor is it an offer to sell or buy, nor is it a recommendation for any security.
Anuj D.