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VMware Public Cloud Software Challenges Amazon, Microsoft

May 21 (Bloomberg) -- VMware Inc. is debuting a service that lets customers use the Web to access information and programs stored in its data centers, an effort to challenge Amazon.com Inc. and Microsoft Corp. in cloud computing.

Early testers of the vCloud Hybrid Service include News Corp.’s Fox Broadcasting and the state of Michigan, VMware Chief Executive Officer Pat Gelsinger in an interview. The product will be more widely available in the third quarter, he said.

VMware, the biggest provider of software that lets computers run multiple operating systems, is expanding in cloud-computing to bolster sales as U.S. customers trim technology spending. With the new product, VMware is entering the fastest-growing part of the cloud market, according to Gartner Inc., which estimates that sales of so-called infrastructure-as-a-service will surge by an average 38 percent annually to $30.6 billion by 2017 from $6.17 billion last year.

“Customers are asking for it -- clearly the whole public cloud service area has been growing and maturing,” Gelsinger said. While he declined to provide pricing information, he said VMware’s service will be more expensive than similar offerings from Amazon, the market leader, and Microsoft.

Gelsinger said VMware’s new offering can command a premium because it lets users easily move applications between so-called private clouds, where software and services are run on customers’ own machines, to public ones on VMware’s servers.

Cloud Partners

Microsoft rolled out an infrastructure-as-a-service product last month along with a pledge to match Amazon’s prices on certain offerings. While 71 percent of public-cloud customers said they use Amazon in a Forrester Research Inc. survey, about 20 percent said they used Microsoft.

VMware will announce partnerships with Tibco Software Inc. as well as Pivotal -- a spinoff of VMware and its parent company EMC Corp., according to Gelsinger. Those agreements will let customers run the applications they purchase from those companies in VMware’s data centers, he said.

Microsoft will also allow vCloud Hybrid Service customers to use Microsoft’s e-mail and database software running in the VMware cloud, Gelsinger said.

VMware is set to announce its new cloud product at an event today at the company’s headquarters in Palo Alto, California.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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