Structure 2010: The Cloud Is the New Hardware, Says CEO of VMware

VMware (s VMW) CEO Paul Maritz said on Wednesday at the GigaOM Network’s Structure conference that the cloud at the infrastructure level “is the new hardware.” What does he mean?

As the amount and complexity of cloud computing services grow, cloud operators will start to “harden” the bottom layers. At some point, Amazon (s AMZN), for example, isn’t going to tell you what it’s doing down below, Maritz said. Much like the hardware of computing, the inside of an x86 processor is filled with complexity — or “magic” — that we don’t know about and we’re not allowed to know about, he said. So as we move to the cloud as a dominant infrastructure “there will be a hard surface that you can’t see below.”

Such a shift is important because software that can work across clouds is starting to be developed. “[W]e need portability across clouds,” said Maritz. VMware has invested in this area, and is looking to develop the notion of using the framework of the cloud as a portablity layer. And at the end of the day the cloud should be open and open source, said Maritz.

The hardening of the cloud isn’t the only shift that Maritz sees on the horizon. He believes there are two major forces at work that are fundamentally changing computing. The first is that within the enterprise there’s a demand to do more with less. Seventy percent of what IT spends on doesn’t help differentiate companies, said Maritz; it’s the investment in the plumbing and the basics. Increasingly boards of directors are asking why it isn’t the other way around (in other words, investing 70 percent on tech differentiation and intellectual property). This shift has led to companies looking to run applications much more efficiently, and turning to virtualization, which is VMware’s business.

At the same time there’s a new world of new applications that can be written in fundamentally different ways, said Maritz. These two forces — efficiency and new programming — will shape the IT landscape, he said. These are very potent technical and business model shifts that are leading to new business models like purchasing functionality on a pay-per-play basis, real-time data streams and large-scale management of data.

At the end of the day who does Maritz feel VMware competes with? Surprisingly, Maritz said it only partially compete with Amazon; it’s the companies that want to own the entire stack — including Microsoft (s MSFT) and Oracle (s ORCL) — that he sees as his prime competition.

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