VMware hinders virtualization market, rival says

Virtualization software vendor Virtual Iron (VI) is looking to undercut established player VMware saying that the cost of VMware’s software is hindering the virtualization market. VI hopes that its cheaper offerings will attract new users.

The company has also just established a significant new partnership: it has joined HP’s new invitation-only ProLiant Partner Program — as one of just two charter members, said VI — and HP’s BladeSystem Solution Builder Program. VI’s marketing manager Mike Grandinetti said that HP “took VI 3.5 into its labs and tested and validated it on servers and high volume storage arrays — EVA8000 Enterprise Virtual Array and the MSA1000 Modular Smart Array — before inviting us to join.”

Trumpeting the superiority of his technology, Grandinetti said: “We can manage 96GB of RAM per virtual server compared to VMware’s 16GB, and our enterprise edition is the only enterprise solution with advanced workload migration abilities to move live virtual servers from one physical server to another in real time, such as in the event of hardware failure of some kind. Also the image of the VM can be expanded from 0.1 of a CPU to 8 CPUs simultaneously.” VI said that its eponymous version 3.5 hypervisor offers similar functionality to that of VMware ESX Server but at one fifth of the cost; VI 3.5 costs $499.

Taking on VMware

Grandinetti went on to criticize VMware’s approach to market. “While VMware was there first, they charge $5,000 per socket for standard server while we’re $499 per socket. It’s the biggest single barrier to adoption,” he said. “VMware has only penetrated five to six percent of the market because they’re too expensive. VMware’s approach is puzzling to us,” he said.

Why would VMware not want to cream off the top of the market in time-honored fashion? “We think there’s a much more high volume market. The problem is that they’re ignoring the mid-market. Look at what happened to Apple who skimmed the cream and ended up with a two percent market share.”

VMware’s Reza Malekzadeh said: “HP is a strong VMware partner. It resells our licences, sells our product bundled on its hardware and takes first support calls. You can’t have a stronger endorsement than that. We also have a relationship involving technology integration on HP’s storage platforms.”

VMware has also consistently presented itself as a strong public advocate of virtualization technology. Responding to VI’s comments on VMware’s pricing, Malekzadeh said: “They’re not comparing our bundled price with theirs. We sell indirectly so our channel partners decide what end user prices are and they sell it as a package. You wouldn’t buy a car in pieces — it’s the same thing.

“So yes, we’re more expensive but the ratio is not five to one. They [Virtual Iron] are about 65 percent of our price. Also, we made VMware Server free and there have been 1.2 million downloads. We surveyed those customers most of whom said they were new to virtualization. We’re making virtualization accessible and as pervasive as possible.” Virtual Iron started up in January 2005 and makes hardware virtualization software that requires CPU hardware assist in the form of Intel’s VT or AMD’s equivalent.

VMware meanwhile remains on HP’s Strategic Software Vendor list.

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