Virtual Pricing: Where To Now?

One great thing about virtualization is that there are so many amazing virtualization-centric tools available. Many good tools are free; yet, for the rest, the pricing models end up being a one-size-fits-most approach. Let’s identify the problem by highlighting the main models for pricing of virtualization tools.

Among the more common approaches is per-processor licensing, which is based on the number of sockets available to the tool (which could span an entire virtual cluster). Per-use licensing would have a price tag associated with each occurrence of the tool being used; this can also refer to the number of systems managed by the tool. Time-based subscriptions define a period of time that the software is used. Lastly, various forms of enterprise licensing allow organizations unlimited use for their environment.

The issue is that these are greatly different strategies, and can end up with greatly different prices. For instance, not all tools have the same value to an organization. Nor are all virtual environments equal. The variance in pricing strategies led me to inquire to vendors their opinions on the topic.

Alex Bakman, founder and CEO of Portsmouth, NH-based VKernel, offered the following on pricing: “We sell per socket because that is how VMware prices. I think that small vendors should let the big boys establish licensing models, as they have the power to move customers.” This makes sense to me, as the tool price scales linearly with the size of the virtual environment. Many tools follow this model now, but what about the future?

Bakman went on to say “Longer term, I think we will need to move to per-core model, otherwise none of us will be able to make any money.” Again, I’ll agree as six- and eight-core systems may make administrators like me think about purchasing fewer sockets in a system to save on licensing costs on all fronts. Further, tool vendors need to make money, and protect themselves against virtual environments that can circumvent licensing mechanisms. One example is Vizioncore’s vConverter, which must be installed on a physical system to protect against VM copy operations to circumvent the available per-use model.

This is a very relevant topic in today’s cost-cutting economic climate. We want to do more with our virtual environments and we need quality tools for the task. I am greatly interested in your take on pricing models and the challenges you face. Please share your thoughts on virtualization tool pricing below or email me your comments.

Posted by Rick Vanover on 02/23/2009 at 12:47 PM