Breaking Down vSphere Pricing

One area I'd like to dig into today is pricing. In my news story, I quote Enterprise Strategy Group Analyst Mark Bowker saying that pricing is the biggest factor in vSphere -- more than VMsafe, Fault Tolerance, VStorage, distributed virtual switches and so on. Burton Group Analyst and Virtualization Review "Virtual Advisor" columnist Chris Wolf also praised the pricing model.

So let's break it down.

There are two entry-level suites: Essentials and Essentials Plus. Essentials Plus adds high availability and data protection onto Essential's base offering. Essentials is $995 for three servers (about $166 per socket), and Plus triples that, for a cost of $2,995.

The four core suites are Standard, Advanced, Enterprise and Enterprise Plus. Pricing:

• Standard: $795/proc
• Advanced: $2,245/proc
• Enterprise: $2,875/proc
• Enterprise Plus: $3,495/proc

Key features like VMotion and Fault Tolerance are avialable at the Advanced level. Time-saving features like distributed virtual switches and host profiles are only available at the Enterprise Plus tier.

Now, the issue here is not whether the pricing structure is fair, or worth the money. The issue, in terms of marketshare, is how this compares to what the competition offers.

During a briefing last week with VMware about vSphere, I asked Bogomil Balkansky, VMware senior director of product marketing, specifically about VMotion, VMware's version of Live Migration. I picked VMotion because many admins consider Live Migration an essential tool for virtualization. It's available for free in Citrix' XenServer, and Microsoft announced yesterday that it will be available for free in Hyper-V Server 2008 R2, meaning it should be available next year. So, I asked Balkansky, if you're an admin in a a small shop with a tight budget, do you go for VMware Essentials, and get a non-Live Migration version of vSphere on three hosts for a thousand bucks, or do you look at XenServer or Hyper-V, which set you back $0?

Balkansky skillfully danced around the question, saying that customers will want VMware's overall features and the maturity of its products more than they want XenServer or Hyper-V. He may be right -- VMware has the name and reputation, both well-deserved. But Citrix and Microsoft (along with Virtual Iron, Red Hat, Novell, IBM and so on) are building reputations in the business, too. And they're attacking VMware hard on price. Will the attacks take their toll? That's a great unknown now. In general, I like the fact that VMware is more seriously recognizing the lower end of the market, and targeting it with affordable options.

But even those who think vSphere is going to be a good product have serious concerns about price. Here's an e-mail I received this morning, from someone who knows this industry very well and likes VMware generally:

"There are new scalability enhancements, and a few "new" features that to me aren't all that new. But the cost just blows me out of the water. $3,500 per *processor*???? How do IT organizations legitimize that kind of cost to their business? Who's snowing whom here?"

If you're an enterprise VMware customer, or considering becoming one, are you prepared to pay $7,000 or more per server? Or is my friend being too hard on vSphere pricing? Will you be taking the plunge on vSphere when it's out? I want to hear your thoughts on this, either below or via e-mail.

Posted by Keith Ward on 04/21/2009 at 12:48 PM