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VMware Raising Prices in Europe, Elsewhere

Over at, Alessandro Perilli is reporting that VMware is actually raising the price of all its products and subscriptions by 10 percent in Europe and Australia. If his reporting is correct (and it usually is), it makes me shake my head in wonder at the company's arrogance.

Raising prices? VMware? There is one complaint about VMware that eclipses all others, and it's the high price of its offerings. It's a minimum of $3,000 to add an ESX server to your infrastructure. Heck, even the non-UI version, the embedded ESXi, costs $500. Then there's the upsell, which Andrew Kutz points out in the July/August issue of our magazine is likely to end up costing you at least $5,750 if you want features like VMotion.

It's simply mind-boggling that at this precarious stage in its history, with well-loved co-founder and CEO Diane Greene getting sacked and replaced by a Microsoftie, that VMware would further increase the cost gap between its products and the competitions'. Hey VMware, you might have heard about this free, competing hypervisor named Hyper-V. It made all the papers.

I pay $4 a gallon for gas these days. It's because I have to. But if there were gas available for free, or 50 cents a gallon, where do you think I'd get my gas? Sure, it may be that the cheaper gas won't give me all the performance of the premium stuff, but it will still get me around town. This is the position in which VMware finds itself. Yeah, Hyper-V, XenServer, Virtual Iron, Novell and all the rest may not do everything VMware does -- but they do enough of what many (most?) customers want. Given that reality, how many of those customers will continue to pay top dollar, when there are much cheaper, and quite viable, alternatives on the market?

With VMware's profitability down, and the company in its first major executive transition, this is hardly the time to be jacking up prices, further disenchanting current -- and potential -- customers. Bad, bad move, VMware.

Posted by Keith Ward on 07/11/2008 at 12:48 PM


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