Is eBay’s elimination of VMware a canary in the coal mine warning?

Today, eBay and PayPal announced their intention to, this summer, replace vSphere with OpenStack on 10,000 servers and eventually move on to do the same with the remaining 70,000 servers. As one considers the licensing cost that goes into a deal that large, it’s a staggering account to lose. However, it seems the VMware is beginning to see the results of new efforts to lower the cost of computing in organizations. While some solutions may not be quite as well refined as VMware and vSphere, there comes a point at which the economics of the situation may drive customers to a slightly less mature, but still capable, platform. That seems to be what’s happening with eBay.

With OpenStack, eBay and PayPal will have a more open architecture that will allow them to avail themselves of various cloud services providers and move between them with relative ease. Further, the companies will basically eliminate what is likely a massive software licensing and support fee, money which can then be transferred into more direct operational costs for cloud services.

On the other end of the spectrum, vSphere remains at risk from Microsoft with Hyper-V 2012.

Do you think that eBay’s decision is just the first domino to fall for VMware? Is VMware moving fast enough to get in front of things like this in order to remain a strong player in the computing world? Do you believe that they face much risk from Microsoft?

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