Reports that PayPal will Replace VMware with OpenStack are Dreadfully Exaggerated

VMware was founded in 1998 and is an American software company and provides cloud and virtualization software and services. Towards the end of March there were reports saying that PayPal was going to stop using VMware in favor of OpenStack.

OpenStack is an Infrastructure as a Service (IaaS) cloud computing project and offers free open source software. The project is managed by the OpenStack Foundation and is a not-for-profit corporate entity which was established in 2012.

A report in March from Business Insider stated that PayPal and eBay are yanking VMware software from some 80,000 servers and replacing it with the free and open-source alternative known as OpenStack. This information was given to Business Insider by Boris Renski, an OpenStack Foundation board member.

Forbes reported that Renski said, “The grand vision for project is, over time, they will replace all of their virtual infrastructure with OpenStack, not just PayPal, but PayPal and eBay, together.”

On April 11, 2013 Vmware’s senior vice president of cloud infrastructure, Bogomil Balkansky stated “Our relationship with eBay and PayPal is a partnership we're proud of, and a great example of the role VMware plays in both typical customer environments and in a bleeding-edge cloud development initiative.”

Nat Rajesh Natarajan who is vice president of platform engineering operations at PayPal, said that “We’re not interested in a 'rip and replace' approach. In fact, this collaboration will help us utilize robust virtualization technologies such as VMware. They are a valued PayPal partner, and we intend to continue leveraging their core strengths in our cutting edge cloud environment.”

Natarajan went on to say that the company aids several cloud environments and does not have any plans to dispose of its VMware software. Interestingly though, PayPal has not posted any comments concerning the situation on its own website. There has been no attempt to elucidate any of the statements or comments made by Natarajan.

What makes things a little more complicated is that last year VMware became a member of the OpenStack Foundation. So now they sort of have to walk the line. Not only is VMware a member making it a contributor, but it is still also a competitor to the OpenStack project.

This two sided coin situation always makes for a good story. What direction will PayPal and eBay take? Since PayPal has not clarified any of Natarajan’s statements what can be made of that? We will just have to follow the story and see where it leads.