Can VMware Get Along With ... VMware?

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VMware (NYS: VMW) has developed a touch of multiple personality disorder this week. Is it a sickness or a shrewd business move? Let's figure it out together.

Meet the voices in my head
The virtual computing giant's main persona marches on as always. At this week's VMworld conference, the company introduced a new "cloud-in-a-box" vision. Stacking VMware's virtual machine software together with recently acquired networking assets from Nicira and EMC (NYS: EMC) storage hardware, VMware will sell turnkey solutions for scalable cloud computing.

That's a direct stab at Amazon.com (NAS: AMZN) and Rackspace Holding (NYS: RAX) , which are the leaders in public cloud solutions today. Incoming VMware CEO Pat Galsinger told The New York Times that the company will eventually test its new applications in those rivals' public clouds and then move to private clouds like VMware's hardware for production-class deployments. "We won't be the only purveyors of cloud-in-a-box either," he said. "Microsoft will do it; so will OpenStack. We will work across a multicloud world."


And that brings us straight to the second head on VMware's shoulders -- the one that's joining Rackspace's OpenStack platform as a Gold member. That's an elite group of up to 24 entities (currently 12) that helps steer the OpenStack cloud computing project, just below the ultra-exclusive eight-member Platinum cabal at the top. Alongside VMware, microchip guru Intel (NAS: INTC) and Japanese electronics veteran NEC also filed applications for membership, to be voted on at Tueday's board meeting.

So VMware vows to fight OpenStack on the free market, but also wants to join the enemy at a very high level. What's going on here?

No need to argue
I'd be shocked if the OpenStack board rejected Intel or NEC, since there's no obvious conflict of interests there. While VMware's expertise would be a valuable asset to OpenStack, the foundation would be letting a fox into the henhouse. That's no slam-dunk foregone conclusion.

But the cloud-computing industry is not known for its hard-nosed competitive streak. Cloud services are often designed to connect to or interact with alternative or even competing solutions. The management software from one company will most likely be able to manage cloud servers running on a different underlying software platform.

The easier these guys can make it to run competing platforms together, the faster their customers will accept the cloud-computing paradigm. Locking companies into just one cloud architecture may scare some potential clients back to running tried-and-true hardware solutions instead, and never mind this newfangled platform with all this vendor lock-in!

So I think VMware is smart to throw its hat in the OpenStack ring. The more, the merrier. Let's call it co-opetition.

As for the foundation's board accepting or rejecting VMware's privileged member application, the ruling Platinum class includes three Linux software specialists and noted open-source supporterIBM -- in short, exactly the kind of insiders who would welcome another high-quality competitor to the cause.

Wouldn't it be cool if some other industries collaborated rather than suing themselves to pieces? Everybody can win when the market is expanding quickly enough. Who said that multiple personalities had to be a disorder?

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The article Can VMware Get Along With ... VMware? originally appeared on Fool.com.

Fool contributorAnders Bylundholds no position in any of the companies mentioned. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+.The Motley Fool owns shares of Amazon.com.Motley Fool newsletter serviceshave recommended buying shares of VMware, Amazon.com, Microsoft, Rackspace Hosting, and Intel, as well as creating a synthetic long position in IBM and a synthetic covered call position in Microsoft. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter servicesfree for 30 days. The Motley Fool has adisclosure policy.

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