VMware halves price of starter virtualization kit

VMware entry-level virtualization kit to cost $500; could answer Microsoft, Citrix criticism

VMware has cut in half the price of a virtualization software package geared toward small and midsize businesses, and changed the way it prices management products to let customers avoid unnecessary charges.

VMware: no 'timeline' for release of delay-ridden client hypervisor

Rivals Microsoft and Citrix have improved their standing in the virtualization market in part by criticizing VMware for the cost of its software, while VMware has claimed that its product's greater ROI justifies a higher cost.

However, VMware has occasionally lowered the price of its lower-end products, and is making another such move Tuesday, the same week Microsoft hosts its Worldwide Partner Conference. VSphere Essentials, an entry-level virtualization platform, will now cost $495 for six CPUs, or $83 per processor, down from $995 for six CPUs. VMware is also changing the pricing model of its management products to charge once for every virtual machine, rather than once for every processor.

The pricing changes coincide with VMware's unveiling version 4.1 of its vSphere platform, saying it will enable the building of bigger, faster cloud networks than the previous generation.

"The question is what took them so long [to lower prices]," says Information Technology Intelligence Corp (ITIC) analyst Laura DiDio. "The answer is they could afford to wait because they had such a big lead on everyone else in the marketplace. They were able to charge a premium, and the users weren't grousing about it too much."

VMware is still betting that its biggest customers won't mind, as it has left the price of its most expensive products untouched.for free, in recognition of the fact that virtualization is becoming a commodity and virtualization management is what really provides value to customers.

Two years ago, VMware made one of its biggest pricing changes by offering the ESXi hypervisor

This week's price drop of $995 to $495 for vSphere Essentials was precipitated by a promotion VMware has been running for the past several months. VSphere Essentials includes the hypervisor and tools such as storage thin provisioning, but not advanced features such as live migration.

"We had been test driving that price as a promotion over the past four months and we saw pretty pleasing results," says Bogomil Balkansky, VMware's vice president of product marketing. "It turns out that $500 is kind of this magic number where it's below the procurement process threshold, and a majority of administrators or data center managers can just buy a tool … and not have to deal with long procurement cycles. The volume increase we have seen has been very significant, so we decided to make that promotion price permanent."

Separately, VMware's move to per-VM pricing for management products, such as Site Recovery Manager and AppSpeed, is in response to customer demand, Balkansky says. In the case of disaster recovery, customers were asking why they had to pay to protect every VM on a processor when only certain VMs were considered critical.

Despite the added flexibility, Balkansky says the actual bills customers see in the per-VM pricing model will be about the same as before.

VMware is also effectively lowering the price of vMotion, which allows "live migration" movement of workloads from one server to another without requiring an application to be restarted, by adding the feature to two vSphere packages that didn't have it before. The two packages that will receive vMotion are Essentials Plus, which costs $583 per processor, or $3,495 for six processors; and Standard, which costs $995 per processor and about $6,000 for six processors.

VMware is not lowering the prices of its highest-end products, the most expensive of which is Enterprise Plus. That version costs $3,495 for a single processor and includes fault tolerance, data recovery, the Cisco Nexus 1000V virtual switch, and numerous other features.

VSphere 4.1, which is available now, is being billed as a better cloud-building tool than previous versions of VMware's flagship virtualization platform, as it allows greater. performance and scalability.

Like previous versions, vSphere 4.1 allows the building of clusters that can be managed as single entities, but those clusters can now encompass up to 3,000 virtual machines, double the previous amount.

Clusters provide load balancing, automatically moving VMs from one server to another in order to guarantee optimal performance of the most active VMs.

The 3,000 VM cluster is based on 32 servers, requiring about 100 VMs per node. Ten VMs on each two-socket host is about normal, so few customers will be able to build clusters of 3,000 VMs.

VMware is also promising live migrations that will be up to five times faster, but this is mainly dependent on customers upgrading from 1 Gigabit Ethernet to 10 Gigabit Ethernet. VSphere 4.1 will also support up to eight concurrent live migrations between a pair of servers, compared to just two concurrent migrations before. Each live migration will take about two minutes, Balkansky says.

One of VMware's goals is to provide control not only over server capacity but also storage and network capacity.

"Historically, we've probably caused some tension between the server and storage team," Balkansky says.

Starting in vSphere 4.0, VMware attempted to give server administrators better visibility into storage, and storage admins better visibility into vSphere.

Now VMware is improving the performance of storage vMotion, which moves disk files from one physical storage array to another, by offloading processing tasks from the server CPU to the storage CPU, Balkansky says.\

While VMware is historically server-focused, Balkansky says current and future editions of vSphere are focusing on providing "analogous abilities in the storage and network side."

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Copyright © 2010 IDG Communications, Inc.

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