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VMware takes stake in Terremark

I have been crazily, insanely busy, and my frequency of blog posting has suffered for it. On the plus side, I’ve been busy because a huge number of people — users, vendors, investors — want to talk about cloud.

I’ve seen enough questions about VMware investing $20 million in Terremark that I figured I’d write a quick take, though.

Terremark is a close VMware partner (and their service provider of the year for 2008). Data Return (acquired by Terremark in 2007) was the first to have a significant VMware-based utility hosting offering, dating all the way back to 2005. Terremark has since also gotten good traction with its VMware-based Enterprise Cloud offering, which is a virtual data center service. However, Terremark is not just a hosting/cloud provider; it also does carrier-neutral colocation. It has been sinking capital into data center builds, so an external infusion, particularly one directed specifically at funding the cloud-related engineering efforts, is probably welcome.

Terremark has been the leading-edge service provider for VMware-based on-demand infrastructure. It is to VMware’s advantage to get service providers to use its cutting-edge stuff, particularly the upcoming vCloud, as soon as possible, so giving Terremark money to accelerate its cloud plans is a perfectly good tactical move. I don’t think it’s necessary to read any big strategic message into this investment, although undoubtedly it’s interesting to contemplate.

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