VMware Inc. has rebranded itself from a virtualization company to a cloud computing company with the launch of its new vSphere operating system.

The new “cloud OS,” which takes the place of Virtual Infrastructure 3, is designed to transform IT infrastructure into a private cloud. The platform aims to aggregate all virtual data centre resources into one pool, or as CEO Paul Maritz called it “a single giant computer.”

“The data centre has become an increasingly complex place,” he told VMware employees, all decked out in blue shirts at the company’s vSphere launch Tuesday. “All of the pieces are connected by tentacles of complexity. We have to sever those tentacles, without requiring the customer to go back to square one.”

With vSphere, virtualization administrators will now be able to build a single computing pool with as many as 32 physical servers and 1,280 virtual machines.

The number of virtual processors per virtual machine has doubled from the previous OS, from four to eight. The platform will also be able to handle four times more memory per virtual machine than the previous offering, from 64 GB to 225 GB.

VSphere can handle close to 9,000 database transactions and 200,000 I/O per second, VMware said.

The product will ship later this quarter.

Live migration for virtual machines and storage has also been optimized in the release, and a new fault-tolerance feature will ensure no data is lost in the event of hardware malfunction.

Maritz added that “new age clouds are the ultimate California motels, where you can check into them, but you can’t check out of them.” This refers to a soon-to-be-released upgrade to vSphere that will allow IT managers to federate their internal data centre clouds with external cloud providers.

While the announcement did not come as a surprise to many industry observers or users — as VMware had been pushing the idea of private, cloud-like infrastructure since its last annual user conference last September — the launch has still created quite a buzz.

Scott Elliott, senior systems network specialist at Christie Digital Systems Inc. and leader of the Southwest Ontario VMware User Group, said that while VMware appears to be using the term of cloud computing as marketing spin rather than a technology statement, the vSphere is a significant evolution over VI3.

He added that even though the administration of an in-house cloud would require a steep learning curve, vSphere appears to have been designed in such a way that makes it easy to implement and manage. “It’s delivering on a lot of the promises VMware has made in the last couple years,” he said.

“VMware has always done a fantastic job of making the management of their products accessible without having to go out on a six month or one year course just to learn the ins and outs,” Elliott added.

But, for companies that don’t have virtualization in their environment right now, the vSphere announcement will likely not be the news that puts them over the edge, he said.

The fact that VMware has responded to market pressures and come up with more attractive pricing options for the smaller guys could play a role in converting some shops, Elliott admitted.

It costs US$995 for a license covering three physical two-socket servers, or a low of $166 per processor.

And with most of the major Fortune 1000 enterprises signed up, VMware’s announcement will have to resonate with the small to medium IT shops in order to keep its competitive advantage moving forward, Laura DiDio, the principal analyst at Boston-based Information Technology Intelligence Corp., said.

“The competition is coming from Microsoft, Citrix, and even Oracle-Sun,” she said. “Everybody is gunning for VMware.”

With vSphere, DiDio said, the company is wise to pursue the cloud angle, as many companies are hesitant to move their data beyond the firewall and onto a shared, external server.

“The first wave of virtualization, even for mid-sized businesses went pretty smoothly because it was simple,” she said. “You could literally drop it into your network without being disruptive, which is very unusual for a new technology — which usually always ends up being disruptive.”

With virtualization environments getting more complex and many IT departments shrinking in size, a solution that looks to address cloud computing dilemma in a simple and efficient way was a necessity from the virtualization mega power.

“The key thing for enterprises looking at the cloud, which most enterprises are, is they have to start building it somewhere,” Chris Wolf, a senior analyst covering virtualization for the Burton Group Inc., said. “VMware is banking on those serious about the cloud to choose vSphere because it is more cloud ready than much of the competition.”

Wolf did warn that the significant changes to IT and business processes required for a cloud-based IT model will take several years to pull off from an architecture and implementation perspective.

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