The Strategy of VMware joining OpenStack is natural and smart one. I don’t think VMware and OpenStack compete at even the datacentre layer or Cloud layer for that matter. An argument could be made that before VMware and EMC spun off Pivotal that OpenStack and VMware were direct competitors but I don’t think that is the case, I think it is in VMware interest that open stack succeeds.
I think the open source cloud platform, will turn out to be an opportunity for the VMware because it will ultimately be able to sell its wares into best-of-breed environments. OpenStack is an open framework for companies to assemble, our systems integrators for that matter, to assemble their own cloud solution. So, they can pick best of breed, hypervisor, their best of breed storage components, network components, management components, etc. and put together a solution. VMware traditionally has been selling a suite, which is an integrated solution of one of those components in order to build a cloud. VMware has developed drivers that allow interoperability between vCenter and OpenStack. Scott Lowe of VMware/Nicira gives a demo of OpenStack integration with a vSphere environment that includes Nicira Networking, VMware HA, DRS and vCenter. The video shows where VMware is headed in their relationship with OpenStack. I think in the future we will see more highly integrated “add-ons” for vSphere. Ideally, it would be ways to sell more “vSphere Enterprise Plus + OpenStack” SKU.