Sometimes a partnership is better than a buy in the IT world. Here are two examples.
Online retailer Amazon (NASDAQ:AMZN), better known for acquiring other businesses or innovating by itself, has opted to work with a rival cloud developer, VMware (NYSE:VMW) and unveiled a new hybrid cloud service which will let customers run computing operations both on their own local VMWare data centers as well as on Amazon's cloud servers. Both companies are sharing the credit for the innovation.
Be it regulatory demands or simply a wider knowledge base, increasingly companies are storing more and more data, want to reduce storage overheads, and have quick, accurate and easy access to it from just about anywhere, anytime using various applications.
The partnership between two tech heavyweights builds on this, one of the most important trends in business.
The new offering, VMware Cloud on AWS, is software sold and supported by VMWare that leverages Amazon's public cloud. It aims to help the many firms who already use VMWare in their business but are hoping to move more of their data to offsite servers like those offered by Amazon.
Although VMWare offers its own cloud services, because AWS and VMWare weren't well-integrated before, customers felt they had to choose between the two.
The deal also lifts the lid on just how much market shares Amazon presently has in the cloud space.
Amazon already has a jaw-dropping 31% worldwide market share in cloud. But as businesses look for more flexible combinations of software services and data storage, companies like Oracle () and Microsoft () are bolstering the cloud offerings, too.
It remains to be seen what market share the new venture with VMware yields. But hybrid cloud offerings are expected to be used by 80% of IT organisations by 2018.
Pointing the way to the growth sector, Nutanix () saw its shares rise more than 130% after its IPO last month by offering a version of hybrid cloud service.
Amazon shares were down 0.5% at $824.60 and those of VMware up 0.1% at $73.10 on Friday.
Maybe joint ventures are a better bet than an expensive buy. That might well be what’s wrestling with executives at Verizon over internet portal Yahoo (NASDAQ:YHOO).
Certainly, Yahoo was having a rough time after Verizon's declaration on Thursday that the portal’s recent data hack may have been material enough to force a renegotiation of the terms of their merger deal. Verizon currently has a $4.83bn deal in place to buy Yahoo's core internet assets.
Yahoo shares were down 0.3% at $41.51. Verizon was down 0.2% at $50.30.