Poll: Did VMware Screw-Up With Its New Pricing Model?

One of the various announcements coming out of VMware this week is change to how vSphere is priced. VMware’s “simplified” pricing can be found in a nightmarish 10 page white paper. Hey, no one ever said enterprise technology pricing was easy.

But the problem is that VMware’s new prices are much higher for some customers. Ars Technica points to this thread on VMware’s community site. And CRN reports on how Microsoft is already hammering VMware on its new pricing model.

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The idea behind the new licensing was to move away from charging based on the specs of the physical server and charge based on the resources actually used by the virtual machines. One big change is a move towards letting customers pool virtual RAM from multiple physical servers.

The problem is that the new approach is actually much more expensive for many, perhaps most, customers who didn’t have a lot of of excess RAM laying around unused by virtual machines.

Microsoft described VMware’s new pricing as Moore’s Law’s in reverse – in some configurations, the cost per virtual machine actually goes up as you add more machines. One poster on VMware’s community site wrote “You could go out and buy the physical box for way less than that today, from any hardware vendor.”

VMware has always been more expensive than the competition, but that hasn’t stopped it from capturing over 50% of the enterprise server virtualization market. Competing on price isn’t usually a good strategy in the enterprise. But considering that Hyper-V is free Windows 2008 servers, and there’s a free edition of XenServer as well, has VMware finally gone too far?

Comparing vSphere to Hyper-V or Xen isn’t exactly an apples to apples comparison, but Citrix has recently upped its game with its acquisition of Cloud.com, and Hyper-V will be adequate for many enterprise virtualization needs.

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