VMware's new virtualization platform, vSphere 4, introduces some significant changes in the way the company prices and packages its software, compared to the previous version Virtual Infrastructure 3 (VI3). To determine the impact on of VMware's revised pricing on various classes of servers, IDEAS calculated the equivalent cost per processor for deploying VI3 and vSphere 4 on various hardware configurations (see details in the June edition of our Tech Trends Monthly newsletter). The analysis found that VMware's pricing for vSphere 4 will be attractive for entry users in SMB environments, but that VMware has increased its premium for users at the high-end who are likely to exploit its most advanced features.
vSphere 4 Standard, the entry version of VMware's virtualization platform for single servers, is clearly similar in features to VI3 Standard, and it is a lot cheaper in all three configurations. With vSphere 4 Standard, the two- and four-socket configurations are 47% cheaper than VI3 Standard, while the one-socket configuration is 73% cheaper. The new vSphere Essentials offerings (see datasheet) create a new entry price point for SMBs users with up to three servers. These users can obtain the same level of functionality as VMware's previous entry bundle, VI3 Foundation, for around one third of the cost.
At the high end, though, users will ultimately pay more to get the most advanced level of functionality. vSphere 4 Enterprise is priced the same as VI3 Enterprise at two- and four-socket configurations, and costs 50% less on one-socket configurations, while including many new features. However, VMware will discontinue vSphere 4 Enterprise after December 15, 2009, at which point users will have to buy vSphere 4 Enterprise Plus. vSphere 4 Enterprise Plus costs 21% more than vSphere 4 Enterprise, for which users get VMware's most advanced features, including VMware vNetwork Distributed Switch and VMware Host Profiles.
Further, some of VMware's new packages vary in terms of the number of cores per processor socket that they can be deployed on. While most versions of vSphere can be deployed on processors that contain up to six cores per socket, vSphere 4 Advanced and vSphere Enterprise Plus editions will be required for deployment on processors that contain up to 12 cores per socket. Most 4-socket servers today have 4 cores per socket, and Intel and AMD have each announced processors with 6 cores per socket. However, Intel has pre-announced processors with 8 cores per socket, which are expected in late 2009, while AMD has previewed processors with 12 cores per socket, and it is promising 16-core processors in the future. When systems with these processors become available, they will require the installation of vSphere Advanced or vSphere Enterprise Plus.
VMware's pricing has come under some pressure lately. Microsoft includes virtualization with its Windows Server 2008 operating system, and Citrix recently starting allowing use of its virtualization functions for free. With its vSphere pricing, VMware has clearly responded to these pressures. In an effort to blunt the appeal of bundled and low-cost alternatives, VMware has reduced the premium for users who may just be getting started with virtualization, and have limited funds to invest in virtual machine software. At the same time, VMware is betting that enterprise users who value VMware's high-end functions will not be as price-sensitive, and are willing to pay more to step up to the next level of VMware's vision for virtual infrastructure.
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