The, Inc. (NASDAQ:AMZN) And VMware, Inc. (NYSE:VMW) Cloud Infrastructure Partnership Holds Numerous Unexploited Possibilities


How, Inc. (NASDAQ:AMZN) Web Services is running the virtualization software of VMware, Inc. (NYSE:VMW) has led some to conclude that it was not being fully exploited and could run in to other uses in future. The way Amazon Web Services is conducting itself, meaning the bare metal approach, also means that large corporate customers could find it easier to move their workload to the data centers of AWS using a product that is soon to be released – the VMware cloud for AWS.

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Faster speeds at lower costs

The reason the VMware cloud could find other uses is because the bare metal approach delivers faster speeds compared to virtualized hardware with regards to applications such as databases, which frequently send lots of data in and out of data centers. Another benefit of the bare metal approach is that it is, of course, cheaper.

“There’s also a growing trend to put containers on bare metal to save on virtualization licensing costs and overhead, but that’s usually for private cloud,” Sebastian Stadil, the chief executive of Scalr, a cloud management firm, told Fortune.

The bare metal approach also comes in handy with older applications that are impossible to virtualize.

IBM and Rackspace

Amazon is, however, not the only tech company that has seen the opportunity that the bare metal approach presents. Aside from options that are virtualized heavily, International Business Machines Corp. (NYSE:IBM) and Rackspace Hosting, Inc. (NYSE:RAX) are currently offering bare metal services.

When questioned over whether there were other potential uses of bare metal a month ago, the head of product at Amazon Web Services, Matt Wood, declined to say anything.

Some in the tech media community are unsure whether Amazon Web Services will take the bare metal capability outside of VMware or will just use it to lure customers of VMware to Amazon’s data centers before migrating them over to Amazon and leaving VMware in the cold. It is, however, too early to predict anything as even Amazon Web Services itself may not yet have fully grasped the possibilities.

In Wednesday’s trading, shares of, Inc. rose by 0.09% to close the day at $772.13 a share.

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