CSPs, Enterprise, Mergers and Acquisitions

OVH Acquires VMware vCloud Air Business; Clears Way for VMware Cloud on AWS

Intel CEO Pat Gelsinger
Pat Gelsinger
Octave Klaba

OVH is acquiring VMware's vCloud Air business, the two companies confirmed this morning. Financial details were not disclosed. The transaction is expected to close in calendar Q2 2017.

Rather than competing head on against Amazon Web Services, VMware is now partnering to offer VMware Cloud on AWS. At the same time, VMware is developing multi-cloud management tools.

Amid those market realities, VMware CEO Pat Gelsinger has been selling off some of VMware's cloud businesses. QTS Realty Trust in October 2016 acquired VMware vCloud Government Service, a FedRAMP compliant cloud solution. And now, OVH is buying VMware's niche vCloud Air business, a niche player compared to AWS and Microsoft Azure.

VMware vCloud Air Ownership Transition

How small is VMware vCloud Air? Think of it this way: In conjunction with the asset sale, VMware is reiterating its previously issued financial guidance for Q1 and the full fiscal year 2018. In other words, this is not a material business for VMware, despite the vCloud Air hype over the years.

As part of the deal, VMware is transitioning vCloud Air U.S. and European data centers, customer operations, and customer success teams to OVH. After the close of the acquisition, OVH will operate the service as vCloud Air Powered by OVH. 

In a bid to calm any customers who are concerned by the asset sale, OVH and VMware are emphasizing their ongoing business relationship. "Through our strategic relationship with VMware, which includes joint R&D and best-in-class delivery of solutions, OVH leads the private cloud market in Europe," said Octave Klaba, chairman and CEO, OVH, in a prepared statement. "With this acquisition, OVH will offer a very unique value proposition for larger enterprise deployments, including rich capabilities for migration and advanced hybrid functionalities for virtual data centers. This will benefit all our clients across the globe."

Who Is OVH?

Russell Reeder

OVH, a global cloud services provider, is a Top 10 provider of IaaS services, according to third-party research. The company has one million customers and 260,000 servers deployed. The company is a long-time VMware vCloud Air Network partner with more than 200,000 VMs, the company says.

OVH also has been ramping up its U.S. business. OVH US, a new subsidiary of the France-based OVH Group, recently hired Russell Reeder as CEO.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.