VMware this morning confirmed that it will offer a public, infrastructure-as-a-service (IaaS) cloud to compete against the Amazons and Rackspaces of the world.

VMware has long straddled the line between helping service providers build clouds and actually offering a cloud of its own to IT shops. VMware's biggest previous foray in providing its own cloud was Cloud Foundry, a platform-as-a-service network to let customers build and host applications in VMware data centers.

The public cloud confirmed today by VMware marks the first time the company will become an IaaS provider itself, analysts said. Unlike platform-as-a-service, which puts the focus on providing simplified tools to application developers, IaaS clouds let customers (or require them to) manage the underlying infrastructure such as the operating system and virtualization tools.

VMware CEO Pat Gelsinger, COO Carl Eschenbach, and other top executives have publicly derided Amazon, saying that VMware and its partners shouldn't be beaten by a "company that sells books." (Amazon CTO Werner Vogels responded, "as long as people see us as a bookstore, we are fine.")

So it's not a surprise VMware is taking on the "bookseller" more directly.

VMware's cloud—dubbed the "vCloud Hybrid Service"—will be a bit different from Amazon's model. VMware will primarily sell space in the cloud to customers through its existing cadre of "value added resellers" and systems integrators. The "hybrid" cloud moniker indicates that customers should maintain on-premises deployments and keep using VMware's virtualization and cloud management software.

VMware is hedging its bets by also offering the cloud directly to developers and other customers with nothing more than a credit card, according to Forrester analyst James Staten.

Details are vague by design

Curiously, VMware is being vague in how it describes its new offering, perhaps to avoid the perception that it is trying to compete against its own partners. It was briefly mentioned in an investor event this morning, and it was alluded to in a press release. VMware also accidentally confirmed it last week when a quickly deleted tweet said, "VMware is prepping a vCloud based public cloud service!"

Analysts were briefed on the announcement ahead of time. Staten of Forrester explained what's going on in a blog post:

VMware's public cloud service—yep, a full public IaaS cloud meant to compete with Amazon Web Services, IBM SmartCloud Enterprise, HP Cloud, Rackspace and others—won't be fully unveiled until Q2 2013, so much of the details about the service remain under wraps. VMware hired the former president for Savvis Cloud, Bill Fathers, to run this new offering and said it was a top three initiative for the company and thus would be getting "the level of investment appropriate to that priority and to capitalize on a $14B market opportunity," according to Matthew Lodge, VP of Cloud Services Product Marketing and Management for VMware who spoke to us Tuesday about the pending announcement. VMware is calling the service "hybrid" to set expectations about how enterprises should view the solution and to reinforce its claims about vCloud Director, the software upon which this offering is based. The company has long claimed that vCloud Director, which instantiates an IaaS environment, empowers I&O professionals to manage workloads in exactly the same way, with the same vCenter tools whether deployed on-premise or in the cloud. Prior to this announcement VMware was delivering this hybrid value through Internet service providers (ISPs) who carried the vCloud Powered or vCloud DataCenter monikers which required them to expose the full vCloud API to enable this level of consistent control. However, it found a reluctant partner reception as ISPs feared full vCloud implementation would commodize their offering and limit differentiation (and even more ISPs balked at the VMware licensing costs compared to open source alternatives). The second reason for the "hybrid" name is to prove to its army of VMware Certified Professionals that the public cloud isn't the enemy but is instead an extension of the data center [and] one that is different from the static virtualization environments they operate today. This means showing them how vCloud Director should really be deployed—with a self-service portal exposed to the developer (not to the administrator), with cost transparency and full deployment automation.

VMware glossed over these details in today's press release. "Today VMware announced its plans to extend the software-defined data center with a hybrid cloud service offering that will allow its 480,000 customers to reap the benefits of the public cloud without changing their existing applications while using a common management, orchestration, networking, and security model," VMware said. "VMware expects to launch VMware vCloud Hybrid Service later this year and intends to make it available through its existing channel, working with its extensive partner ecosystem to accelerate customers’ journey to the cloud."

When we contacted VMware this morning, a company spokesperson said, "VMware does not have additional details to share about the service at this time beyond what is included in the press release."

Gartner analyst Chris Wolf provided more details in a blog post, writing, "If we look at today’s IaaS announcement, VMware is trying to have greater control of the 'choice' its customers get. Choice will mean a VMware-hosted offering that in theory will make it easy for customers to move VMware-based workloads in and out of the pubic cloud. The aim is an 'inside-out' approach where workloads between a private data center and a public cloud operate seamlessly. The trick here, however, is how important mobility and choice will be to customers. Workloads that go straight to cloud and have few traditional enterprise management needs can go to any cloud. Front end web servers are a great example—static data, built to horizontally scale, and no backup requirements."

VMware has to find some way to differentiate itself from Amazon, Wolf noted. "If VMware is the 'enterprise alternative' to Amazon, it better launch its IaaS solution with enterprise features (AWS isn’t perfect but it has tons of features that large enterprises are now taking for granted)," he wrote. "Redundant data centers, enterprise storage, networking, backup, and security are a must. In addition, it must offer serious tools for developers; the time for VMware to show the results of its investment in Puppet Labs should be when the public IaaS offering launches. Otherwise, Amazon and other providers will continue to win on features and the ease of experience that developers have on its platform. Granted, this can’t all happen overnight, but VMware needs to show value quickly in order to gain momentum."

Wolf also reports that a version of the Cloud Foundry software (which was spun out into a joint venture involving VMware and its owner, EMC) will be running on Amazon in a couple of months.

VMware takes on network virtualization too

In addition to the new cloud offering, VMware detailed a network virtualization initiative called NSX, developed in part with technology acquired in VMware's $1.26 billion purchase of network virtualization and software-defined networking vendor Nicira.

"VMware NSX exposes a complete suite of simplified logical networking elements and services including logical switches, routers, firewalls, load balancers, VPN, QoS, monitoring, and security; arranged in any topology with isolation and multi-tenancy through programmable APIs—deployed on top of any physical IP network fabric, resident with any compute hypervisor, connecting to any external network, and consumed by any cloud management platform (e.g. vCloud, OpenStack, CloudStack)," VMware said. Further details are on VMware's blog.