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Conclusion: VMware’s new strategy of directly entering the IaaS market will create confusion and ultimately decimate VMware based IaaS vendors. IT organisations should manage the risks this creates with their current (or future) VMware based IaaS partners. In the long run the new strategy will benefit all customers by creating a global scale, VMware based, IaaS that reduces costs, increases service quality and drives greater innovation.

VMware does not lead the IaaS market and faces massive competition from non-VMware based hyperscale IaaS providers, such as Amazon, Rackspace and Microsoft. VMware centric organisations should not blithely assume that a VMware based IaaS is the best option and should evaluate the IaaS alternatives from hyperscale providers, especially Amazon.

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