VMware buys small stake in cloud hosting provider

VMware, the virtualisation software vendor whose kit is central to many so-called cloud-computing environments, has bought a 5% stake in cloud hosting provider Terremark for $20 million.

Terremark offers its customers utility-based hosting and back-up services. At VMware’s European expo earlier this year, Terremark’s chief technology officer Kurt Glazemakers revealed how VMware’s software allowed it to offer a self-service server provisioning system that can quickly scale up and down according to fluctuations in demand, described by some as a ‘virtual data centre’.

The buy-in raises questions over whether VMware might have designs on becoming a cloud-computing provider itself. However, the small stake suggests otherwise: more useful for VMware would be to have a pet cloud services provider from which to glean customer and technical insight.

Speaking at VMworld Europe in February 2009, VMware VP for emerging markets Danny Chu said the company’s lack of a cloud hosting business of its own was a differentiator. “There is no ambiguity about the fact that we are an enabler [for hosting providers seeking to offer cloud computing services], not a competitor,” he said.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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