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Will the VMware 'Guarantee' Pay Off?

So VMware is going to guarantee that you get at least a 50 percent savings on server hardware, or their professional services are free. What to make of this?

First, it's a good thing for the industry. Sure, VMware isn't completely altruistic here. The company stands to make a bundle from selling Virtual Infrastructure 3.5 (now at Update 4 if you hadn't heard) and related upgrades, if the industry embraces this offer. But it also reduces some -- and maybe a lot -- of the risk involved for companies that want to virtualize, or do more with virtualization, but are hesitant to take on such a project in this economy. Knowing that they won't have to pay for the consultant work if they don't achieve 50 percent savings on server hardware should make it an easier sell to upper management, which is becoming harder and harder to convince to spend any money on IT these days.

Risk reduction is huge in a recession, especially one like this. That should lead to a greater adoption of virtualization, which can only be a good thing.

I don't imagine the savings part will be very hard to do. With most shops averaging somewhere in the neighborhood of six VMs per physical host, and the ability of most modern servers to handle double that number of VMs or more, chopping the number of servers in half should be cake. And the fact that VMware has limited the offer to shops of between 200-750 servers cuts down on the number of engagements.

Still, companies should look hard at the fine print of the offer. If you're CTO of a company that has done this, and you're convinced that your server hardware savings are only 40 percent, while VMware looks at a different set of metrics and says that it hit 50 percent, the fur could start to fly. Know exactly what you're getting into here. You also have to determine if the amount you could save on hardware will offset the cost of VMware's professional services, since if you reach the magical 50 percent mark, you will have to pay for the weeks or months of consulting that you're getting.

One question I posed in the news story is whether this program will change the perception that VMware is the most expensive virtualization solution (now, strictly in terms of upfront dollars, there's no doubt this is true; the question is whether the value of VMware's superior technology ultimately balances out that cost). I'm not sure it will, but at the very least it won't hurt VMware's reputation.

Would VMware be doing this in the absence of the recession? Director of Product Marketing John Gilmartin didn't have an answer for that when I asked, and it's an honest answer. Hypotheticals are hard. But it is a recognition of the current reality the industry is facing, and I'm glad to see VMware taking this step, even with the self-interest involved.

Will other companies follow its lead? We'll see; I'm convinced, however, that it will make many businesses consider VMware more strongly than ever. After all, they get a guarantee that the "other guys", at present, aren't giving.

What's your opinion? Would this make you consider VMware more seriously? Let me know.

Posted by Keith Ward on 04/06/2009 at 12:48 PM


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