VMware aims to scoop up Virtual Iron customers

Virtualization giant VMware Inc. is targeting disgruntled Virtual Iron users by offering what it calls an easy migration path to its vSphere 4 virtualization platform. But one data centre analyst is citing a few reasons to be skeptical about the uptake.

Virtual Iron was scooped up in a May acquisition by software company Oracle Corp. for an undisclosed sum. Then, in June, Oracle effectively killed the Xen-based product, cutting off new licence sales as of June 30.

Steve Schuchart, principal data centre analyst with Current Analysis Inc., original praised the deal in a report a couple days after the acquisition announcement. Oracle would be able to quickly provide virtualization features on par with those of Citrix Systems Inc. and expand the footprint of other Oracle products in Virtual Iron’s small and mid-sized business install base.

He’s not praising Oracle anymore, and he’s not sure there’s a large Virtual Iron customer base left for VMware to convert.

“Oracle’s actions have already alienated the Virtual Iron customer base,” Schuchart said in an interview. “If I was a VI user, I’d be angry and looking elsewhere.”

“Elsewhere” won’t necessarily by VMware, though. A big chunk of that customer base was made up of price-sensitive SMEs. Price and functionality – almost on par with the considerably more expensive VMware’s – were the main attractions.

“They had great functionality,” Schuchart said. “They did some things only VMware had done before.”

While some of those customers might be “sufficiently scared that they’ll latch on to the industry’s biggest competitor,” Schuchart thinks Citrix and especially Microsoft Corp. have the most to gain. Citrix will be attractive to those who still want a Xen-based hypervisor (although Schuchart didn’t think that would be much of a factor in the decision). The most price-sensitive might lean toward Microsoft’s Hyper-V platform, he said.

Bogomil Balansky, VMware’s vice-president of product marketing, agreed that Virtual Iron customers would be looking at all the options. Having been told by Oracle that there’s no development roadmap, “they think, ‘What do I do next?’ … Everything will be on the table.”

And any uptake by old VI customers won’t make a huge impact on VMware’s customer base. VMware has about 130,000 customers; VI has about 1,000, Balansky said. “Any uptake is going to be small compared to our existing customer base.” Balansky said VMware is attempting to help “stranded” VI customers.

“We’re offering pretty attractive discounts” specifically to former VI users — up to 40 per cent on product licences, “essentially compensation for the investment they’ve already made” in Virtual Iron. There will also be discounts on support and subscriptions.

The migration process will be simple, Blalnsky said. “It’s not a very technically involved process,” he said. Users install vSphere and its management tools, then run the free VMware converter to reformat their existing virtual machines. Up to 100 conversions can be run simultaneously, so “a customer can do the conversion in a fairly speedy manner,” he said.

At least one user in a Virtual Iron forum showed some interest in the program.

“I’d say the deal looks good enough to get a quote,” wrote one user. “Forty per cent off and the ability to stay away from the Oracle support nightmare might make it worth it.”

At press time, Oracle representatives had not returned calls for an interview.

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