VMware (NYSE: VMW) will update its Hybrid Cloud strategy on May 21. CEO Pat Gelsinger and GM/Senior VP Bill Fathers will be on hand for the cloud computing news announcement, which VMware will host at its Palo Alto, Calif., headquarters. This will be a critical update from VMware -- which must balance its Hybrid Cloud strategy with its vCloud Service Provider partner program.

More than 8,500 companies were vCloud Service Providers as of September 2012. But now VMware is building its own public cloud to compete with Amazon Web Services, Microsoft Windows Azure, Rackspace and other public cloud providers.

VMware's strategy is to give customers the best of both worlds -- the same virtualized architecture for running applications on-premises in private clouds or on VMware's forthcoming public cloud. The other key piece of the strategy: Promote VMware's software-defined data center push, which will virtualize compute, storage and networking resources for easier IT management.

According to the May 21 meeting invite:

"VMware would like to invite you to an event hosted by Pat Gelsinger, CEO, and Bill Fathers, SVP and GM, VMware Hybrid Cloud Services, to unveil a new cloud service that will seamlessly extend the cloud beyond customer data centers."

But how will VMware continue to empower vCloud Service Providers? The answer involves the Cloud Credits Program, which empowers VMware channel partners to drive business toward VMware's third-party cloud service providers (CSPs). The credits program offers financial incentives to VARs and on-premises channel partners that drive business to VMware's approved CSPs. 

The big remaining question: So how soon will VMware's own public cloud move into production for partners and customers? And how will VMware reward partners that move customer workloads into its public cloud? The answers will likely begin to materialize on May 21.